The Federal Reserve will be launching its real-time payments network known as FedNow, a new competitor for real-time payment methods.
FedNow will make its debut in July. According to Forbes, FedNow is the most significant upgrade to the United States payments system in years. Its purpose is to allow customers to process payments in seconds within financial institutions of all sizes and specialties. Many companies are already on board to adopt this system. Star One Credit Union, Temenos, and processor ACI Worldwide are just a few companies keen to integrate FedNow into their business practices.
ACI president Craig Ramsey praised the system, calling it “the future.”
“The future of payments is digital. The future of moving money is faster. The future of payments is 24/7,” Ramsey explains.
Almost two dozen companies are currently engaged in the system’s final testing phase and will likely take part in a FedNow certification program. The pilot program kicked off last year and has been quietly experimenting with the system with just a handful of participants. JPMorgan Chase and investment baking giant Goldman Sachs are a part of this testing phase. Payments processor Fidelity National Information Services is also on board with FedNow.
Though they’ve yet to officially reveal every corporation taking part in the pilot, the Federal Reserve says its certification program will equip each company with the proper knowledge to handle FedNow’s innovative capabilities.
FedNow is expected to help initiate a sharp increase in real-time payments volume within just a few short years of its launch. By 2027, FedNow is expected to drive transactions from nearly 2.5 billion to 11.5 billion.
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