The Federal Reserve Launches FedNow, Same Day Transfer Service

The Federal Reserve is joining the instant payment lane with its new service, FedNow, with a few added perks to the system.

The nation’s money system is cashing in on the demand for peer-to-peer transfers and is looking to make theirs stand out amongst the competitors. With some services, there is often a lag in settling cash transfers. This can be due to federal holidays or limitations within banking institutions. With FedNow, customers will not have to worry about any delays in receiving or sending funds. All transfers will be processed within seconds, no matter the day or time.

FedNow is working with 41 banks directly, including Bank of New York Melton, U.S. Bancorp, and JPMorgan Chase. Additional banks and credit unions, both big and small, will soon become partners of the service as the Reserve looks to offer banking customers an in-house solution that won’t require them to use third-party options such as Zelle and Cash App. Another benefit of FedNow is that it will also allow checks to process on the same day.

For more significant transactions that are above the limitations established with FedNow, users may also use FedWire. This will offer real-time wires, but unlike FedNow, FedWire will only be available during designated business hours. To send or receive funds, both parties must have accounts at the participating banks.

The Reserve launched FedNow on July 20th, even though they will continue to develop the system. In time, it will begin showing up on banking websites and their accompanying apps.