Federal Reserve to Build Real-Time Payments System
After years of speculation, the Federal Reserve announced this week it will create a real-time payments system, which it expects to be live by 2023 or 2024. The system, the FedNow Service, was announced by Federal Reserve Governor Lael Brainard during a speech at the Federal Reserve Bank of Kansas City. During the announcement, Brainard highlighted the strong support for the project the Federal Reserve received during its public comment period, noting that 90 percent of the comments called for the creation of the system. The system will allow near-instant transfers of funds 24 hours a day, 7 days a week, between depository institutions eligible to hold accounts at Federal Reserve Banks. Eligible depository institutions will also be able to designate a service provider or agent to submit or receive payment instructions on the institutions’ behalf. The FedNow Service will be designed for payments of $25,000 or less.