With development of the FedNow Service well under way, the Federal Reserve today amended the industrywide launch timing for its instant payments platform to 2023. The announcement narrows the delivery timeframe by a full year, updating a previous notice in 2019 that indicated industrywide availability in 2023 or 2024.
“Over the last several months, we’ve made significant strides toward our program milestones for the FedNow Service,” said Esther George, president and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the FedNow program. “Based on the FedNow team’s progress, we are pleased to share this updated timeline so the industry can continue to prepare for the adoption of FedNow.”
The Federal Reserve is taking a phased approach to expedite bringing the FedNow Service to market. Its initial launch will include core clearing and settlement functionality and key value-added 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. General availability of the FedNow Service will occur after extensive testing by more than 110 participants in the FedNow Pilot Program to ensure the service is market-ready.
“We are working hard to respond to the industry’s call for urgency and growing demand for the service, which is evident in the widespread response to our call for pilot participants,” said Kenneth C. Montgomery, Federal Reserve Bank of Boston first vice president and chief operating officer and FedNow program executive. “As part of our commitment to transparency, we will continue to provide updates and further narrow our launch window as we achieve additional program milestones.”
Ken Montgomery recently spoke with American Banker about this exciting development and other FedNow efforts. Read the full article now (Off-site).