FedNow is a real-time payment system developed and operated by the Federal Reserve Banks of the United States. It is designed to provide individuals and businesses with the ability to send and receive instant payments directly from their bank accounts 24 hours a day, 7 days a week, and 365 days a year. The purpose of FedNow is to enhance the speed, efficiency, and accessibility of the U.S. payment system, allowing for faster and more convenient electronic transfers of funds.
With FedNow, individuals and businesses can make instant payments using their mobile devices, computers, or other electronic channels. The system aims to reduce the reliance on traditional payment methods, such as checks and Automated Clearing House (ACH) transactions, which can take several days to process.
FedNow is expected to provide benefits to a wide range of users, including consumers, businesses, and financial institutions. It can enable faster bill payments, person-to-person transfers, business-to-business payments, and other types of transactions. By offering real-time payments, FedNow aims to improve the overall efficiency and competitiveness of the U.S. payment system, bringing it more in line with the capabilities offered by other countries' instant payment systems.