U.S. Fed launches new FedNow payments system that lets you send money in seconds

[TallGuyJohninBKK]

The Federal Reserve Thursday officially launched its long-awaited instant payment service FedNow, which allows consumers and businesses to send and receive money in seconds.

 

The system lets Americans pay for groceries instantly, businesses pay their suppliers, or people pay each other. It will be available 24 hours a day, every day of the year, with full access to funds immediately.

 

FedNow isn’t offered directly to individuals and businesses, but it will serve as the basis of infrastructure for instant payments by linking banks. Transactions occur between bank accounts and enable funds to be transferred from a sender’s bank account to a receiver’s bank account immediately.

...

The service launches with the participation of 35 banks of different sizes, including JPMorgan and Wells Fargo as well as credit unions."

 

(more)

 

https://finance.yahoo.com/news/fed-launches-new-payments-system-that-lets-you-send-money-in-seconds-140305052.html

 

Banks closely watch FedNow with payments system set for launch

"Modernizing an antiquated U.S. banking system, the Federal Reserve is about to launch a new instant-payments system that'll be available 24/7/365. "FedNow" will be initially supported by 57 organizations like Bank of New York Mellon (NYSE:BK), JPMorgan Chase (NYSE:JPM), Wells Fargo (WFC) and U.S. Bancorp (NYSE:USB), but there are plans to onboard more lenders and credit unions in the near future.

...

Explainer: Currently, it can take anywhere from a day to many days for cash payments to settle - in order to verify a transaction, account amounts, and clearing of the funds. Under FedNow, all these steps would happen instantaneously, complementing similar private-sector real-time payments systems like The Clearing House's RTP network.

...

FedNow will help everyone from consumers to small businesses settle directly via central bank accounts, unlike closed peer-to-peer networks like Zelle (JPM) or Venmo (NASDAQ:PYPL)."

 

(more)

 

https://seekingalpha.com/news/3989110-banks-closely-watch-fednow-with-payments-system-set-for-launch

 

 

 

[couchpotato]

4 minutes ago, TallGuyJohninBKK said:

The Federal Reserve Thursday officially launched its long-awaited instant payment service FedNow, which allows consumers and businesses to send and receive money in seconds.

 

The system lets Americans pay for groceries instantly, businesses pay their suppliers, or people pay each other. It will be available 24 hours a day, every day of the year, with full access to funds immediately.

 

FedNow isn’t offered directly to individuals and businesses, but it will serve as the basis of infrastructure for instant payments by linking banks. Transactions occur between bank accounts and enable funds to be transferred from a sender’s bank account to a receiver’s bank account immediately.

...

The service launches with the participation of 35 banks of different sizes, including JPMorgan and Wells Fargo as well as credit unions."

 

(more)

 

https://finance.yahoo.com/news/fed-launches-new-payments-system-that-lets-you-send-money-in-seconds-140305052.html

 

Banks closely watch FedNow with payments system set for launch

"Modernizing an antiquated U.S. banking system, the Federal Reserve is about to launch a new instant-payments system that'll be available 24/7/365. "FedNow" will be initially supported by 57 organizations like Bank of New York Mellon (NYSE:BK), JPMorgan Chase (NYSE:JPM), Wells Fargo (WFC) and U.S. Bancorp (NYSE:USB), but there are plans to onboard more lenders and credit unions in the near future.

...

Explainer: Currently, it can take anywhere from a day to many days for cash payments to settle - in order to verify a transaction, account amounts, and clearing of the funds. Under FedNow, all these steps would happen instantaneously, complementing similar private-sector real-time payments systems like The Clearing House's RTP network.

...

FedNow will help everyone from consumers to small businesses settle directly via central bank accounts, unlike closed peer-to-peer networks like Zelle (JPM) or Venmo (NASDAQ:PYPL)."

 

(more)

 

https://seekingalpha.com/news/3989110-banks-closely-watch-fednow-with-payments-system-set-for-launch

 

 

 

Oh a copy of the Thai "Promptpay" system which has been operating very well for a few years.

[TallGuyJohninBKK]

3 minutes ago, couchpotato said:

Oh a copy of the Thai "Promptpay" system which has been operating very well for a few years.

The second link/source I posted above noted that the current U.S. payments infrastructure has been lagging behind that of other countries....

 

The article said FedNow "will also bring the U.S. in line with other countries that have had a similar service in place for years, such as Brazil, the EU, India and the U.K."

 

[TallGuyJohninBKK]

Here's the list from the Fed of the participating institutions at the start -- not a lot of household names of widely used banks and credit unions, as yet.

 

Some of the better known / widely used:

 

JP Morgan Chase, Wells Fargo Bank, US Bank, Salem Five Bank, Veridian Credit Union...

 

https://www.frbservices.org/financial-services/fednow/organizations

 

 

[TallGuyJohninBKK]

Just to be clear - consumers won't have direct access to the FedNow network.

 

It will be up to the individual participating banks and credit unions to offer the FedNow capabilities through their current online banking setups... much like those same institutions currently provide payments / fund transfers thru the widely used Automated Clearing House (ACH) system.

 

Except in the case of FedNow based payments, the payments/transfers are supposed to be instantaneous, instead of the current domestic ACH payments/transfers that take anywhere from next-day to several days to settle right now.

 

[TallGuyJohninBKK]

22 minutes ago, couchpotato said:

Oh a copy of the Thai "Promptpay" system which has been operating very well for a few years.

I've never signed up for a Thai PromptPay account...

 

But even without it, when I go to transfer funds from one of my Thai bank accounts to a different Thai bank account, or pay a Thai merchant via a Thai bank transfer, I have the option of the transfers being instantaneous and they are free (no per transfer fee charged on the sending or receiving end).

 

I'm hoping that will come to be the standard in the U.S. for U.S. domestic payments/transfers not too far down the road.  The U.S. ought to be ahead on such things...not behind.

 

 

Edited July 22, 2023 by TallGuyJohninBKK

[Skipalongcassidy]

The reason that the USA banks have been lacking is the "no fees" barrier... they haven't figured out a way to make sure that they get a fee for every transaction.