US Federal Reserve goes live with FedNow instant payment system

The US Federal Reserve has made its new instant payments system, the FedNow Service, live with 35 banks and credit unions signed up.

According to the central bank, 16 service providers are ready to support payment processing for banks and credit unions, including Finastra, Temenos, Open Payment Network and ACI Worldwide.

Among the 35 early-adopting banks and credit unions of the interbank payment system are Adyen, JPMorgan Chase, Peoples Bank, BNY Mellon and Wells Fargo Bank.

The US Department of the Treasury’s Bureau of the Fiscal Service is also ready with instant payments capabilities via the FedNow Service.

“The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient,” said Federal Reserve chair Jerome Powell.

“Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid.”

The FedNow Service operates alongside other longstanding Federal Reserve payment services such as Fedwire and FedACH.

Earlier this week Temenos confirmed it had completed certification for FedNow.

Through Temenos’ cloud-native payments ‘hub’, banks can support the FedNow service and offer faster payments services to their customers, such as ‘Request to Pay’ and embedded finance offerings.

In its announcement, Ken Montgomery, Federal Reserve Bank of Boston first vice president and FedNow Service program executive, said: “We are excited that early adopters of all sizes across the country are making strides in their operational readiness for live transactions through the system.

“Completing certification is a key milestone for participating organizations to validate their ability to deliver instant payment services.”