Two years ago, the Federal Reserve launched the FedNow Service, a groundbreaking instant payments platform designed to serve the needs of U.S. financial institutions of all sizes and help pave the way for 24x7x365 payments for businesses and individuals nationwide.
Here, Chief FedNow Executive Nick Stanescu shares his perspective on how things are going on the network and what’s ahead for instant payments.
July 2025 is the two-year milestone for the FedNow Service. Can you give us a status update?
Happy birthday, FedNow Service! The pace of adoption on the FedNow Service since we launched two years ago has been incredible. We currently have more than 1,400 participants, up from 900 banks and credit unions at our one-year anniversary, and the network keeps growing every day. Along with adoption, we’re seeing volume continue to rise, and the number of senders — ranging from the biggest banks to the small credit unions — steadily climbs.
Even more exciting is the explosion of instant payment innovation emerging among financial institutions, payment processers and fintechs. Use cases (Off-site), such as instant payroll, auto loan disbursements and digital wallet defunding, have started gaining a lot of traction. And we’re also seeing novel use cases crop up each day across a number of industries — real estate transactions, brokerage account defunding, insurance payouts and more.
All that energy reflects the growing demand for instant payments in the U.S. It’s something businesses and consumers now expect from their financial institutions (Off-site).
What other developments do you see on the horizon for the FedNow Service?
Based on conversations I’ve had at recent industry conferences and customer meetings, I’d say merchant refunds, account funding, healthcare payments, and small business and online marketplace payments are use cases likely to emerge strongly in the next 12 to 18 months. But I fully look forward to seeing unexpected use cases, because use cases very often bubble up in unpredictable ways. The FedNow Service is uniquely use-case agnostic, and that’s by design — a flexible structure encourages innovation across industries and the broader payments ecosystem.
We’re also seeing momentum building in the industry around request for payment (RFP), which is a feature the FedNow Service has had since launch. RFP is a way for a person or business to request an instant payment from another person or business. Increasingly, we’re going to see financial institutions start offering instant bill pay services that can help their customers conveniently send e-invoices, receive instant bill payments and better manage cash flow.
What are customers telling you about the service? What about opportunities for improvement?
When we launched the network in 2023, it was in response to what the industry was asking us to do. Today is no different. We’re constantly talking to our customers — 9,000 banks and credit unions across the U.S. — in one-on-one meetings, at industry events and via forums like the FedNow User Group (Off-site). Two years in, a number of them have had a chance to kick the FedNow Service tires and regularly tell us what they like and where they’d like us to continue to evolve.
One thing that stands out for our bank and credit union participants is they really appreciate the hands-on customer support from their relationship managers and the FedNow onboarding teams before, during and after they adopt the service. The onboarding experience is fully digital and streamlined. We also have a special developer site that makes it easy for participating financial institutions and service providers to browse, search and download information that allows them to build, implement and maintain instant payment technology.
They also appreciate the operational simplicity of managing liquidity on the FedNow Service. It’s the same way they settle with other Federal Reserve financial services. It’s what they know — no new processes or overhead to manage.
Of course, there is always room to make the FedNow platform even more valuable to those who use it. Recently, participants gained access to new account activity threshold functionality (Off-site), which adds an another layer of protection against fraud. Participants can customize value and velocity thresholds by customer segment to fit their unique business needs and risk tolerance. For example, a credit union might set a higher cumulative threshold for business customers and a lower threshold for new account holders. These new risk mitigation features kicked in alongside an individual transaction increase to $1 million.
Speaking of risk mitigation, fraud is a major concern with any payment rail. What about on the FedNow network?
Fraud is something everyone needs to be on guard against no matter what payment rail is being used. There is often a misconception that newer payment rails are less secure, which can lead consumers and businesses to use payment methods that may expose them to risk. For example, 91% of businesses are currently using paper checks, which is the payment type most affected by fraud, according to the 2025 Association for Financial Professionals Payments Fraud and Control Survey Report (Off-site).
In contrast, our customers tell us they have seen very little evidence of fraud on the FedNow network to date. That said, the risk of fraud is always evolving and is something the Federal Reserve takes very seriously across all payment rails, including the FedNow Service. Looking ahead, we recently launched a pilot to develop additional network fraud risk mitigation capabilities to support participants’ fraud risk management.
We are dedicated to providing our FedNow Service customers with features and functionality that give them lots of control over their risk exposure and liquidity. For example, in addition to the account activity threshold functionality, we’ve recently added correspondent net send limits (Off-site) which enable correspondents — financial institutions that settle funds on behalf of FedNow Service participating financial institutions — to set net send limits (or limits on the total dollar amount of payments, less any funds received) for their direct respondents at the respondent financial institution level.
Any final words?
A lot of times I get asked, what is the goal for the FedNow Service? The short answer is instant payments ubiquity, which will bring widespread benefits to financial institutions and their customers — the businesses and end users who demand and expect it.
A recent survey (Off-site) indicated that 66% of businesses were likely to use instant payments if their primary financial institution offered it. Businesses using instant payments reported 10% greater satisfaction with their primary bank or credit union. Statistics like that tell me we are well on our way to instant payments ubiquity in the U.S.
To the banks and credit unions already participating on the FedNow network, congratulations on getting ahead of the curve — and thank you! For those still on the fence, I’d encourage you to talk to your relationship manager and check out our online resources (Off-site) about the potential impact for your organizations and those you serve. Participating in the FedNow Service can deliver wide-ranging benefits to your customers and members, like the ability to precisely time payments and better manage cash flow — and deliver cost-saving and customer retention opportunities to your institutions. Now is the time to get on board.
