The Federal Reserve expects to launch its real-time payments service FedNow in the middle of next year.
The Aug. 29 announcement targeted a production rollout from May to July 2023. The initial launch will include core cleaning and settlement functionality and key features, such as a request-for-payment capability and tools to support participants in their handling of payment inquiries, reconcilements and certain exceptions. The Federal Reserve intends to augment and enhance features in subsequent releases to continue to meet industry needs.
More than 120 organizations — recently U.S. Bank, Exchange Bank and several payment processors and solution providers — are already participating in the FedNow pilot program, according to the Fed. The pilot will enter technical testing in September.
In 2019, the Fed established a target rollout window of 2023-24, but later accelerated that timeline
“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.”