The US Federal Reserve has announced the launch of a long-awaited service that aims to modernize the country’s payment system by allowing ordinary Americans to send and receive money in seconds, 24 hours a day.
FedNow, which has been in operation since 2019, aims to eliminate the multi-day delay that cash transfers typically experience, bringing the United States in line with countries such as the United Kingdom, India, and Brazil, as well as the European Union.
FedNow launches with 41 banks and 15 providers approved to use the service, including community banks and large lenders like JPMorgan Chase, Bank of New York Mellon, and US Bancorp, but the Fed plans to ride on more banks and credit unions this year.
The service, which would compete with private sector real-time payments systems such as the clearing house’s RTP network, was initially opposed by major banks, who claimed it was redundant.
