The FedNow instant payments system creates opportunities for banks and credit unions of all sizes, facilitating new ways for them to generate revenue from both business and retail customers. But it also creates strategic, pricing and marketing challenges.
FedNow — a set of payment rails run by the Federal Reserve — went live with a group of early adopters in July. It competes with the private sector’s Real Time Payment Network, which launched in 2017.
The RTP network processed 58 million transactions in the second quarter of 2023, and use has been increasing rapidly since early 2020.
Backers of instant payments point to this trend as evidence that the concept is catching on. They contend that widespread adoption by financial institutions is not a matter of if, but when.
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