The Federal Reserve has switched on its new instant payment system, FedNow, with 35 banks and credit unions onboard.
In brief:
-The 35 early-adopting banks and credit unions are joined by the US Department of the Treasury's Bureau of the Fiscal Service and 16 payment processing service providers.
-As an interbank payment system, the FedNow Service operates alongside other longstanding Federal Reserve payment services such as Fedwire and FedACH.
-In June last year, the Fed decided to delay the implementation of the ISO 20022 payment messaging format by two years to 2025 in response to bank concerns that this process was hampering FedNow's rollout.
What does this mean?
"The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient," says Federal Reserve chair Jerome H. Powell.
