FedNow Service

The Federal Reserve will provide the FedNow Service, a real-time gross settlement service that will process and settle individual payments within seconds, 24 hours a day, 7 days a week, 365 days a year. The service will support depository institutions’ provision of real-time payment services to end-user customers. Like other payment and settlement services offered by the Federal Reserve, the service will settle payment obligations between depository institutions by adjusting balances in accounts at the Reserve Banks. The service will be designed for smaller-value payments, limited to $25,000 or less, such as person-to-person payments and business-to-person payments.

The FedNow Service will be available to depository institutions eligible to hold accounts at the Federal Reserve Banks. Participants will be able to designate a service provider or agent to submit or receive payment instructions on their behalf. Participants will also be able to settle payments in the account of a correspondent bank.

Using the FedNow Service, a participant will be able to send a payment from its Federal Reserve account to carry out a payment initiated by its end-user customer to pay another end-user customer with an account at another participant. Payment messages will contain the information required by originating and receiving participants to debit and credit end-user accounts, respectively, in real-time. The FedNow Service will also support the inclusion of additional descriptive information related to a payment, such as remittance or invoice information. Payment message format will be based on the ISO 20022 standard.

The FedNow Service will have defined opening and closing times that will not affect the continuous processing of payments. End-of-day balances will be calculated for each day of the week.

The FedNow Service is expected to be available in 2023 or 2024. Implementation information for depository institutions will be available through existing Federal Reserve Bank communication channels.

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Last Update: August 05, 2019