Announcing FedNowSM Service features and functionality
August 6, 2020
The Federal Reserve reached a milestone in the development of the FedNow Service with the August 6 announcement of the service’s features and functionality. This announcement reflects the Federal Reserve’s efforts toward establishing an infrastructure that will support instant payments in the United States. Industry feedback and in-depth analysis, including over 180 comment letters (Off-site) in response to the August 2019 Federal Register notice (Off-site), helped drive the FedNow Service features and design.
As part of today’s milestone, we are also unveiling our new FedNow visual identity:
Implementing the FedNow Service as soon as possible remains a high priority for the Federal Reserve. While the target release date remains 2023 or 2024, we intend to announce specific launch timing once we complete additional development work. The FedNow Service will be deployed in phases so that the initial service can be launched expeditiously, with additional features and enhancements released in stages after the initial launch. This phased approach will allow for adjustments and improvements in response to industry needs or changes in technology.
The FedNow Service design will provide an important payment infrastructure for the future. Financial institutions and their service providers will be able to use the service as a springboard to bring the benefits of safe, efficient instant payments to communities across the country. The initial FedNow Service launch will include:
- Core clearing and settlement capabilities to support a range of transaction types and use cases
- Use of the widely accepted ISO® 20022 standard and other industry best practices to support interoperability
- Features that will support flexible adoption, including support for the use of service providers and correspondents and an option to enroll as a “receive-only” participant
- Value-added features including request-for-payment capability and tools to support participants in their handling of payment inquiries, reconcilements and certain exceptions
- Features to enhance experience for financial institutions by broadcasting participant availability to support their transition to 24x7x365 operations, a user interface to support data needs and the ability to have access to balance information on weekends
- Features to support payment integrity and data security and tools to help financial institutions combat fraud, such as a transaction value limit and reporting features
- A liquidity-management tool that will allow participants and others to transfer funds to each other to support the liquidity needs of instant payments
After the initial service launch, we hope to offer additional features related to fraud prevention, error resolution and case management. We will continue to explore other features, including potential support for person-to-person payments that use the alias of a receiver. Ongoing engagement with the industry, including a pilot program, will play a role in our implementation plans.
Keep up with the latest FedNow news and instant payments education on the FedNow Service page on FRBservices.org®. To help inform the development of the FedNow Service, join the FedNow Community by submitting our participant profile form. If you do not want to commit to the FedNow Community but would like to receive the latest FedNow news, please sign up to receive FedNow emails.
“ISO” is a registered service mark of the International Organization for Standardization.