FedNow is coming. What does it mean for your credit union?

After nearly a decade of development, FedNow has finally arrived. Although there are several private-sector real-time payment options currently available, including the Real-Time Payments (RTP^®) network and Zelle^®, FedNow is the first U.S. instant payment service backed by the federal government. For that reason alone, it is worth a closer look.

What is FedNow?

FedNow is a new real-time payment service that will enable participants to send and receive money anytime and anywhere, virtually instantaneously. In contrast with most other payment rails currently available, FedNow users will have 24/7 access and be able to complete payments or transfers on weekends, holidays and after normal banking hours. For example, standard ACH transfers are processed in batches and may take up to three business days to complete.

Offered through the Federal Reserve Bank, FedNow will be available to all traditional banks and credit unions, but there’s no requirement for them to join. Consumers, businesses and non-bank payment providers (like neo-banks) aren’t eligible to use FedNow directly, but they can through a participating financial institution.

 

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