CHICAGO –The Federal Reserve’s FedNow Service will start operating in July, according to the Fed, which has provided additional details on how financial institutions can prepare for the launch.
The solution is designed to make instant payments available to all financial institutions.
Effective in the first week of April, the Federal Reserve said it will begin the formal certification of participants for launch of the service. Early adopters will complete a customer testing and certification program, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system, the Fed stated.
According to the Fed, certification encompasses a comprehensive testing curriculum with defined expectations for operational readiness and network experience. In June, the Federal Reserve and certified participants will conduct production validation activities to confirm readiness for the July launch.
The Early Adopters
The Federal Reserve stated that many “early adopters” have declared their intent to begin using the service in July, including a diverse mix of financial institutions of all sizes, the largest processors, and the U.S. Treasury.
“In addition to preparing early adopters for the July launch, the Federal Reserve continues to engage a range of financial institutions and service providers to complete the testing and certification program and implement the service throughout 2023 and beyond. (Ken) Montgomery noted that availability of the service is just the beginning, and growing the network of participating financial institutions will be key to increasing the availability of instant payments for consumers and businesses across the country,” the Fed stated in a release.
Core Clearing Functionality
According to the Fed, the FedNow Service will launch with set of core clearing and settlement functionality and value-added features. More features and enhancements will be added in future releases to continue supporting safety, resiliency and innovation in the industry as the FedNow network expands in the coming years, the Fed explained.