CHICAGO–The Federal Reserve said it has now narrowed the timing of the FedNow Service launch to mid-year 2023, and is specifically targeting a production rollout of the service in the May to July timeframe.
As CUToday.info previously reported, the Fed had earlier indicated only that plans called for a 2023 launch of the anticipated instant payments service. The FedNow Pilot Program is preparing to enter technical testing for the service starting in September.
"Today, with the FedNow launch date in sight, we are pleased with the collaboration and dedication our pilot participants have brought to advance modern payments in America," said Esther George, president and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the FedNow program.
According to the Fed, there are currently more than 120 organizations participating in the FedNow Pilot Program. Recent newcomers include U.S. Bank, Exchange Bank, and several payment processors and solution providers, including Alacriti Payments LLC, ECS Fin Inc., Form3 and ModusBox, Inc., the Fed said.
For Institutions of Any Size
The central bank said the FedNow Service will be accessible to financial institutions of any size, “helping broaden the reach of instant payments to communities nationwide. Financial institutions participating in the service will be able to provide businesses and consumers with the ability to send and receive instant payments efficiently and securely.”
Payment recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments, the Fed added.
"The benefits of instant payments are increasingly important to consumers and businesses, and the ability to provide this service will be critical for financial institutions to remain competitive," said Ken Montgomery, Federal Reserve Bank of Boston first vice president and FedNow Service program executive. "Next year, financial institutions will be able to use the FedNow Service as a springboard to provide innovative solutions to their customers."
Certification Process
According to the Fed, participants in the FedNow Pilot Program will complete a certification process to ensure operational and messaging readiness and then move into production once the service is launched. As the pilot program moves into the testing phase, the Federal Reserve is beginning to engage non-pilot financial institutions and service providers interested in being early adopters of the service.
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