FedNow Service
The FedNow Service is a real-time payments platform developed by the Federal Reserve to enable instant money transfers between U.S. banks and credit unions. Launched in 2023, FedNow allows financial institutions to send and settle payments in seconds, 24 hours a day, 7 days a week—including weekends and holidays. It is designed to modernize the U.S. payments infrastructure and support faster, more secure financial transactions. --- ### Who Can Use FedNow? FedNow is not a consumer-facing app or product. Instead, it is a back-end service that financial institutions—such as banks and credit unions—can use to offer instant payments to their customers. Businesses and individuals can access FedNow indirectly through their participating financial institutions. Any financial institution in the U.S. that is eligible to hold an account with a Federal Reserve Bank can choose to join the FedNow Service. --- ### What Are the Benefits of Instant Payments? Instant payments like those enabled by FedNow offer clear advantages for consumers, businesses, and banks. For individuals, it means getting paid in real time—for example, receiving a paycheck, government benefit, or insurance claim instantly instead of waiting for processing. For businesses, instant payments improve cash flow, streamline supplier payments, and reduce the risk of delays in transaction settlements. For financial institutions, offering instant payment services increases competitiveness, enhances customer experience, and enables new product opportunities in a growing digital economy. --- ### What Are the Risks of Instant Payments? Despite their speed and convenience, instant payments come with risks. Once a payment is sent, it cannot be reversed—making fraud prevention more critical than ever. Scams, social engineering attacks, and accidental transactions may become more damaging when money moves instantly and irreversibly. Additionally, banks must invest in robust infrastructure, 24/7 operational readiness, and fraud monitoring systems to support this always-on payment environment. Regulatory compliance, especially around consumer protection and data security, also becomes more complex in real-time scenarios.