The intention is to achieve this by making the process faster, cheaper, and more convenient for individuals and businesses, speeding payments to recipient. Five regional banks are among those participating in the program.
When fully Implemented in 2023, FedNow will also enable individuals and companies to transfer funds between accounts, pay bills and send or receive money to and from friends and family in near real time.
The Federal Reserve announced that more than 110 participating financial institutions (including savings banks, commercial banks, saving and loan associations and credit unions) have signed on to support the development, testing and adoption of the FedNow Service during a pilot period.
The FedNow Service will be released in phases. The first release will include fraud prevention tools, the ability to join initially as a receive only participant, request for payment capability, and tools to support participants in their handling of payment inquiries. In addition, Reserve Banks will offer a liquidity management tool alongside the FedNow Service.
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