The Federal Reserve Banks have narrowed the timing of the FedNow Service launch to mid-year 2023, specifically targeting a production rollout of the service in the May to July timeframe.
This further defines the previously communicated 2023 launch window for the anticipated instant payments service and comes as the FedNow Pilot Program prepares to enter technical testing for the service starting in September.
“Today, with the FedNow launch date in sight, we are pleased with the collaboration and dedication our pilot participants have brought to advance modern payments in America,” said Esther George, president and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the FedNow program.
Currently, more than 120 organizations are participating in the FedNow Pilot Program. Recent newcomers include U.S. Bank, Exchange Bank, and several payment processors and solution providers, including Alacriti Payments, ECS Fin, Form3 and ModusBox.
The FedNow Service will be accessible to financial institutions of any size, helping broaden the reach of instant payments to communities nationwide. Financial institutions participating in the service will be able to provide businesses and consumers with the ability to send and receive instant payments efficiently and securely. Payment recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments.
“The benefits of instant payments are increasingly important to consumers and businesses, and the ability to provide this service will be critical for financial institutions to remain competitive,” said Ken Montgomery, Federal Reserve Bank of Boston first vice president and FedNow Service program executive. “Next year, financial institutions will be able to use the FedNow Service as a springboard to provide innovative solutions to their customers.”
Participants in the FedNow Pilot Program will complete a certification process to ensure operational and messaging readiness and then move into production once the service is launched. As the pilot program moves into the testing phase, the Federal Reserve is beginning to engage non-pilot financial institutions and service providers interested in being early adopters of the service.
The Federal Reserve Banks are developing the FedNow Service to facilitate nationwide reach of instant payment services by financial institutions – regardless of size or geographic location – around the clock, every day of the year.
Through financial institutions participating in the FedNow Service, businesses and individuals will be able to send and receive instant payments at any time of day, and recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments. Access will be provided through the Federal Reserve’s FedLine network, which serves more than 10,000 financial institutions directly or through their agents.
