The FedNow® Service entered the market in 2023 as the Federal Reserve’s always-on payment network, and its development has not slowed.
“Nothing stays still, and certainly not in payments,” Chief FedNow Executive Nick Stanescu told PYMNTS in an interview.
Stanescu said he believes that since the network launched, it has evolved into a foundation for financial institutions to create new products and services using instant money movement.
Feedback from the industry continues to guide priorities, he said. That collaboration began before launch with pilot programs and advisory boards and has continued through quarterly town halls and direct consultations. The input has already led to two increases in the maximum transaction limit, first to $1 million in June and then to $10 million effective this month.
Participants also wanted more access to data. The result was a new set of APIs that allow banks to request and receive data directly from the FedNow Service to improve internal or manual processes, potentially leading to streamlined customer experiences. The FedNow Service is also piloting a network intelligence tool that lets banks check a receiver’s account before sending a payment, using network-level insights to help identify potential risks.
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Learning to Operate Around the Clock
At first, many financial institutions believed that participating in a 24/7 service would require full-time staffing, but that has not proven necessary.
“Most financial institutions are not new to 24/7 environments,” Stanescu said.
Automation and transparency reduce the need for manual intervention and customer inquiries, he said. Some small credit unions, even with limited staff, have found that instant payments are easy to manage. The FedNow Service was built to make that possible, giving participants flexibility to start small and scale use cases as adoption grows.
Managing Risk and Liquidity
Managing risk in an always-on environment has been a top priority. One of the most recent additions is the new account activity threshold functionality, which allows banks to set transaction velocity and value thresholds by customer type. This customization gives institutions better control over liquidity and fraud exposure.
Other updates include new tools to resolve exceptions more efficiently and a scam-classifier model that standardizes how banks report and communicate about suspicious activity. Together, these capabilities give participants stronger control over operational risk while maintaining the immediacy of instant payments.
APIs and Automation Simplify Operations
Stanescu said banks are asking for more automation to reduce manual work.
“We hear more and more about new ways to access data, with new APIs, and those are in high demand,” he said.
The newest APIs, FedNow Ping and FedNow Participant List, support faster information exchange and a smoother user experience. These features give financial institutions new ways to communicate and interface with the service in real time, through authenticated channels.
Onboarding, Testing and Certification Simplified
The FedNow Service has also worked to shorten onboarding and testing. The record for bringing a new institution live stands at seven days from contract signing to active participation. A digital onboarding platform lets banks track progress in real time, while a dedicated FedNow team assists with documentation, certification and post-launch support.
The FedNow Service also operates a developer website that consolidates technical materials for financial institutions and service providers. Forty-one certified service providers now offer the FedNow Service, giving banks more options to connect. Providers across the broader ecosystem offer services ranging from B2B solutions to mobile platforms.
Use Cases Expand Across Sectors
Expanded limits and new risk tools are supporting a wider range of use cases on the FedNow Service. The U.S. Treasury adopted the network in October as an option for instant disbursements to federal agencies, including FEMA, as part of its Digital Payout program. Stanescu called the move “a game changer,” especially for emergency payments where recipients need money quickly.
Other use cases include corporate treasury transfers, vendor payments, real estate transactions, auto loan funding on weekends, earned wage access, digital wallet top-ups, and account-to-account transfers. These applications demonstrate the flexibility of instant payments to improve liquidity and customer experience.
Building on the Rails
Financial institutions and FinTechs are beginning to create overlay services on top of the network. The Request for Payment feature is one area of growing experimentation, as participants test new ways to trigger instant bill payments. Stanescu also cited one of the first demonstrations of instant payments using QR codes over the FedNow Service, a sign that convenience and automation will define the next phase of innovation.
Clarification around terms related to “on-behalf-of” payments has also provided a more concrete roadmap for partnerships between banks and FinTechs, making it possible for participants to develop new features on top of the core rail.
Looking Ahead
As adoption grows, the focus will shift from enablement to deeper integration, where real-time liquidity, data access and customer experience converge. The evolution of the FedNow Service, guided by industry feedback and built for collaboration, signals that the next stage of payments innovation will unfold directly on FedNow rails.
Stanescu said the future of the FedNow Service is about scale and innovation.
“We’re going to see more participants, more volume, more new features and functionality, and more innovation,” he said. Instant payments, he added, are “the new normal in money movement.”
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