What is FedNow?
Launched on July 20, 2023, FedNow seeks to modernize the US payment infrastructure . While the Federal Reserve already has a payment portal that doesn't operate in real-time like many transfer apps, prior to FedNow, you might have to wait a few days to receive a direct deposit and have access to funds. With FedNow, you can receive payments within seconds. The transfer Speed is instant which allows a recipient full access to funds immediately.
Will ACCESSbank offer FedNow?
Will FedNow replace cash?
No, the FedNow system won’t replace cash. FedNow is a platform that will transfer your money digitally, the same way popular money apps transfer funds. The promise of FedNow is it allows financial institutions to make transfers happen between bank accounts in the blink of an eye.
As the Fed puts it, “The FedNow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.”
Will FedNow create digital currency?
While its been speculated that FedNow will create a digital currency, the Fed has tried to dispel this false assumption by simply saying, “FedNow is not related to a digital currency.” At this time, based on everything we've heard from the fed, there is no intention to use FedNow to create digital currency.
Does FedNow replace money apps like Zelle?
The Fed has made clear that FedNow is not intended to replace other money transfer options like Zelle. Rather, it is meant to work alongside the current systems built by the private sector.
But FedNow could be a game changer because thousands of banks already use the Fed’s current, slower payments system. FedNow is seen as a safer and faster option.
There already is a Real-Time Payments (RTP) network, a private service launched in 2017 and used by more than 100 financial institutions to offer instant funds transfers. Zelle is the only app-based payment system that operates within the RTP network. That’s why you might see Zelle’s service offered directly when you log into your bank.
How does FedNow work?
In technical terms, FedNow is a clearing service for banks to provide immediate end-to-end payments to customers. The key difference between this service and the Fed’s previous system is that FedNow will be online 24/7, processing transactions in real-time. The FedNow service is available to more than 10,000 financial institutions that operate within the Fed’s network.
