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Federal Reserve to develop real-time gross settlement service for faster payments

The Board of Governors of the Federal Reserve System announced (Off-site) on August 5 that the Federal Reserve Banks will build and operate the FedNowSM Service, a new interbank 24x7x365 real-time gross settlement (RTGS) service with integrated clearing functionality to support faster payments in the United States. The decision came after an in-depth policy analysis, including the assessment of more than 400 public comments (Off-site) on an RTGS proposal outlined in last fall’s Federal Register notice. The Board is now seeking public comments on all aspects of the FedNow Service through the latest Federal Register notice.

Additionally, the Federal Reserve will explore the expansion of Fedwire® Funds Service and National Settlement Service hours, up to 24x7x365. Subject to the outcome of additional risk, operational and policy analysis, the Board will seek public comment separately on this potential action.

Watch Governor Lael Brainard’s speech announcing the Federal Reserve’s planned actions.

How will the service work?

In a society that operates on a 24x7x365 basis, where you can instant message and post and consume content online at any time, faster payments have the potential to bring positive benefits to the U.S. economy. Real-time payments allow individuals and businesses to send and receive payments any time, any day, anywhere, and within seconds, have full access to those funds. The FedNow Service will support interbank settlement for financial institutions’ provision of end-to-end faster payment services and, in combination with private-sector real-time payment services, provide infrastructure to promote ubiquitous, safe and efficient faster payments in the United States. Features under consideration for the FedNow Service include:

  • Processing individual credit transfers valued at $25,000 or less in real time (within seconds) on a 24x7x365 basis
  • Settling payments through debits and credits to balances in financial institutions’ master accounts at the Reserve Banks, with an end-of-day balance recorded for each day of the week
  • Providing liquidity through intraday credit on a 24x7x365 basis under the same terms and conditions as for current Federal Reserve services
  • Adhering to the ISO® 20022 standard and providing access through FedLine® connections
  • Allowing participating financial institutions to designate a service provider to submit or receive payment instructions on their behalf and settle payments in the account of a correspondent bank

Why does the Federal Reserve need to enter the market?

The Federal Reserve is committed to its mission to foster the accessibility, safety and efficiency of the nation’s payment system. Providing payment services, along with collaboration and cooperation with the private sector, is a key part of our ability to affect public policy objectives and achieve those goals for the benefit of the U.S. public. The Federal Reserve views support for faster payments as requiring modernization of, and upgrades to, Reserve Bank services alongside private-sector services, and broader modernization of the banking industry as a whole. Similar considerations have led central banks in various countries to develop modernized settlement infrastructures to support faster payments.

The FedNow Service can help create, alongside the private sector, an accessible, safe and efficient RTGS infrastructure for faster payments. The Federal Reserve has a uniquely broad reach as a payment services provider to more than 10,000 financial institutions across the country. This broad access can prove especially important for reaching customers of financial institutions in rural communities who often rely upon their local banks and credit unions to access financial services.

How can I comment?

The Board is seeking feedback through November 7, 2019. All comments will be posted to the Board website without alteration except when necessary for technical reasons or to remove sensitive personally identifying information. We encourage you to provide comments via the following options:

  • Board website: Follow the instructions for submitting or viewing comments on the Proposals for Comment (Off-site) page
  • Email: Send an email to and include the docket number, OP-1670, in the subject line
  • Fax: (202) 452-3819
  • Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, DC 20551

Where can I learn more?

The Federal Reserve Banks will host webinars during the comment period to provide an overview of the notice and answer questions. Visit (Off-site) to learn more about the Board’s decision, and sign up for a webinar on the Fed Events (Off-site) page.


“ISO” is a registered service mark of the International Organization for Standardization.


  • FedNow Service
  • Fed360

    Federal Reserve publishes white paper on synthetic identity payments fraud

    Some industry experts consider synthetic identity fraud to be the fastest-growing type of financial crime in the United States – and it’s a crime that cost U.S. lenders an estimated $6 billion in 2016. The Federal Reserve recently published a Payments Fraud Insights (Off-site) white paper to serve as a resource for industry professionals.

    A synthetic identity (Off-site) is created by using a combination of real information, such as a legitimate Social Security number, with fictional information, which can include a made-up name, address or date of birth. Fraudsters increasingly use synthetic identities to commit payments fraud, which can escape detection by today’s identity verification and credit-screening processes. Over time, fraudsters build up the creditworthiness of the synthetic identity, then “bust out” by purchasing high-value goods and services on credit and disappearing. Because the identity was not real to begin with, there is limited recourse in tracing the perpetrators and holding them responsible for their debts.

    Crime rings see attractive opportunities in synthetic identity payments fraud. Law enforcement officials, financial institutions and other organizations recognize it as a growing concern. The white paper provides information on the current state of synthetic identity fraud, including the scope of the issue, causes, contributing factors and its impact on the payments industry.

    Ken Montgomery Federal Reserve System Payments Security Strategy Leader
    Chief Operating Officer, Federal Reserve Bank of Boston

    The Federal Reserve began raising awareness and encouraging action on the growing problem of synthetic identity payments fraud in late 2018. Through primary and secondary research and industry dialogue, we seek to improve understanding of the issue, create a greater sense of urgency about addressing it and promote industry action to both identify and mitigate this type of fraud. Subsequent installments in our Payments Fraud Insights series will describe potential gaps in detection and mitigation approaches, as well as ideas and best practices to address the issue.

    Action Item:

    Be sure to read the Federal Reserve’s white paper, Synthetic Identity Fraud in the U.S. Payment System (Off-site). For more information on synthetic identity fraud, you can:

    Follow our FedPayments Improvement accounts on Twitter (Off-site) and LinkedIn (Off-site)

    Faster ACH funds availability is coming

    As a reminder to all FedACH® customers, the next enhancement to Same Day Automated Clearing House (ACH) goes into effect on September 20, 2019. This enhancement will increase the speed of funds availability for certain Same Day ACH and next-day ACH credits. Funds from Same Day ACH credits processing in the existing first processing window must be made available by 1:30 p.m. in the receiving depository financial institution’s (RDFI) local time. Funds from non-Same Day ACH credits must be available by 9 a.m. in the RDFI’s local time on the settlement date if the credits were available to the RDFI by 5 p.m. local time on the previous day.

    Questions should be directed to FedACH and Check Services Customer Support. Thank you for your patience as we conduct these important tests.


    Register today to test your team with a simulated cyber-attack exercise

    The threat landscape of the electronic payments system is continuously evolving. To test your incident response team’s ability to defend your organization against a cyber-attack in this dynamic environment, register for this fall’s Cyber Attack Against Payment Systems (CAPS) (Off-site) exercises. Hosted by the Financial Services Information Sharing and Analysis Center (FS-ISAC), these two-day tabletop exercises are virtual, confidential sessions designed to simulate an attack on payment systems and processes. Teams will be put into a high-pressure situation that will encourage quick mobilization and execution of business continuity practices.

    The Federal Reserve Banks remain committed to reducing risk across our service areas. We frequently communicate with your organization to share key Federal Reserve Bank updates and security insights. However, keeping payment systems safe is a collective responsibility. The Federal Reserve Banks participated in the planning of the CAPS exercises, and we encourage all of our customers to consider participating to help you:

    • Gain maximum benefit with minimal resources
    • Strengthen team relationships and cross-functional knowledge
    • Build a clearer understanding of system vulnerabilities
    • Drive exploration of improvements in response processes

    Who should attend?

    Registration (Off-site) for CAPS is free, and it is open to all FS-ISAC members and most regulated financial institutions. If you have any questions about the CAPS exercise, you can contact FS-ISAC staff at

    When are the sessions?

    There are three identical sessions available on the following dates in 2019:

    • September 24-25
    • October 1-2
    • October 8-9

    Security breaches and system compromises are more common than we would like to believe. Make sure you and your organization are equipped to handle these attacks. We encourage you to consult your institution’s information security team to learn more about these threats and the tools to counteract them.


    The Federal Reserve Banks do not sponsor or endorse any of the non-Federal Reserve Bank-related products, parties or entities discussed in this publication.


    Introducing the new Savings Bond Academy online training tool

    Have questions about cashing savings bonds? Use the new Savings Bond Academy online training tool (Off-site) to refresh your knowledge and help onboard new employees. Created for individuals responsible for cashing savings bonds for customers, the tool uses scenario-based instructions and is useful for assisting customers with answers to their specific questions.

    Savings Bond Academy online training tool

    In addition to this new tool, the Savings Bond Redemptions Frequently Asked Questions page on FRBservices.orgSM and The Guide to Cashing Savings Bonds (Off-site) on the TreasuryDirect® website are also great resources to get the answers you need, when you need them. And, of course, Savings Bond Customer Support Contacts are always available to assist you at (844) 284-2676.

    Action Item:

    Visit the TreasuryDirect website to access the new Savings Bond Academy online training tool (Off-site).


    “TreasuryDirect” is a registered service mark of the United States Department of the Treasury, Bureau of the Fiscal Service.


    New URL for Treasury Check Verification Application website

    Effective August 10, 2019, the URL for the Treasury Check Verification Application (TCVA) website has changed. The new URL is (Off-site)

    The old URL, (Off-site), will have a redirect link to the new URL for 30 days, beginning August 10, 2019. After the 30-day period has ended, the old URL will no longer be active and you will be required to use the new URL.

    Please ensure any automated query operations your institution uses that rely on the TCVA website are updated using the new URL to avoid interruptions with your processing.

    If you have any questions related to this change, please contact the Bureau of the Fiscal Service Call Center (Off-site) at (855) 868-0151, option 1.


    Fed Facts: Fed podcasts offer something for everyone

    Summer is often the time of year when people tackle reading lists or catch up on their favorite TV shows. It’s also a great time to sit back, relax and tune in to a variety of Federal Reserve podcasts that are easy to listen to during the dog days of summer. 

    For example, you can hear from small businesses about the challenges they face to grow and thrive in the New York Fed’s podcast, Bank Notes. From the St. Louis Fed, you can listen to stories of prominent female economists who are thriving in a male-dominated field or a podcast series covering economic topics for high school and college students.

    Check out the table below to learn about a wide range of informative and entertaining podcast series from around the Federal Reserve System.

    Federal Reserve Bank of Boston The Boston Fed offers a variety of podcasts (Off-site) featuring selected speeches by Bank officials and presentations made at sponsored events. The topics range from higher education to strategic risks.
    Federal Reserve Bank of New York Bank Notes (Off-site) is a podcast that dives into insights and analysis from the New York Fed. The first series focuses on the financial needs and challenges of small businesses.
    Federal Reserve Bank of Philadelphia In Moments in Money and Economics (Off-site), Philadelphia Fed Economic Education Advisor Andrew Hill, Ph.D., discusses topics in personal finance and economics.
    Federal Reserve Bank of Richmond Listen to economic updates, speeches and more on the Richmond Fed’s podcasts (Off-site) page.
    Federal Reserve Bank of Atlanta Check out the Atlanta Fed’s podcast series Economy Matters (Off-site), which focuses on economic issues regarding housing, the evolution of payment systems and more.
    Federal Reserve Bank of St. Louis The St. Louis Fed’s Women in Economics (Off-site) podcast series shines a light on women who have built careers as prominent economists.
    Economic Lowdown (Off-site) covers topics in economics, banking and monetary policy for high school and college students.
    Federal Reserve Bank of San Francisco The podcast series Twice Around (Off-site) focuses on myth busting and gives insight and advice about achieving the American dream.