In the months since the Federal Reserve’s momentous FedNow Service announcement (Off-site), the Reserve Banks have already made significant progress to develop the new instant payment service. Thanks to your engagement, the August 2019 Federal Register notice received over 180 comments (Off-site) from a wide range of industry stakeholders, and we are incorporating this feedback as we determine the FedNow Service’s features, design and implementation timeline. The Board expects to publish a FedNow Service description in a subsequent Federal Register notice later this year. While we are targeting 2023 or 2024 for the initial service launch, we are working diligently to launch the FedNow Service as soon as possible.
Our progress to date
Since becoming leader of the FedNow development effort, Boston Fed First Vice President Ken Montgomery has been assembling a team with a wide range of expertise across technical and financial services disciplines, including product management, business integration and information technology. Montgomery and his team are now hard at work evaluating different delivery options to provide the FedNow Service. We also continue to seek industry views about FedNow features and design through interviews, meetings and other communications. These discussions include meeting with other central banks operating instant payment services and drawing on their experience to inform our efforts.
The Federal Reserve recognizes the importance of interoperability between instant payment services. During our engagement with the industry, we will explore potential paths to achieving the ultimate goal of nationwide reach. We are conducting an assessment to evaluate interoperability capability, including evaluation of other instant payments operators’ message specifications and rules.
Montgomery shared more about our FedNow Service development progress in a recently published American Banker article, “Why the Fed is taking an incremental approach to faster payments (Off-site),” and an accompanying podcast, “‘We want to take the time to get it right’ — Fed’s Montgomery on FedNow (Off-site).”
As FedNow Service development progresses, financial institutions that are interested in instant payments may want to consider reviewing the potential impact of incorporating this service into their financial services offerings. This preparation will help ensure you are able to use the FedNow Service when it becomes available. To encourage adoption, we plan to provide educational materials for financial institutions and the broader payments ecosystem on this new category of payments. We hope to work with the industry to provide education to increase end-user awareness as well.
To learn more about the FedNow Service, please review the FedNow Service FRBservices.orgSM page, product sheet (PDF) and Frequently Asked Questions (Off-site). To ensure that you receive future FedNow Service communications, please sign up to receive FedNow emails.