U.S. News

2250 readers

18 users here now

News about and pertaining to the United States and its people.

Please read what's functionally the mission statement before posting for the first time. We have a narrower definition of news than you might be accustomed to.

Guidelines for submissions:

Post the original source of information as the link.
If there is any Nazi imagery in the linked story, mark your post NSFW.
If there is a paywall, provide an archive link in the body.
Post using the original headline; edits for clarity (as in providing crucial info a clickbait hed omits) are fine.
Social media is not a news source.

For World News, see the News community.

This community's icon was made by Aaron Schneider, under the CC-BY-NC-SA 4.0 license.

founded 2 years ago

MODERATORS

[email protected]

US Federal Reserve launches "FedNow" - the long-awaited instant payments service, modernizing the US banking system (www.reuters.com)

submitted 1 year ago by [email protected] to c/[email protected]

14 comments fedilink hide all child comments

The "FedNow" service, which has been in the works since 2019, will seek to eliminate the several-day lag it commonly takes cash transfers to settle, bringing the U.S. in line with countries including the United Kingdom, India, Brazil, as well as the European Union, where similar services have existed for years.

FedNow is launching with 41 banks and 15 service providers certified to use the service, including community banks and large lenders like JPMorgan Chase (JPM.N), Bank of New York Mellon (BK.N), and US Bancorp (USB.N), but the Fed plans to onboard more banks and credit unions this year.

Unlike peer-to-peer payments services like Venmo or PayPal, which act as intermediaries between banks, payments made via FedNow will settle directly in central bank accounts.

The Fed also operates a real-time payments system called FedWire, but that's reserved for large-scale, mostly corporate payments and is only operational during business hours. While the new FedNow system is for everyone, it's likely to benefit consumers and small businesses the most, analysts have said.

you are viewing a single comment's thread
view the rest of the comments

[–] [email protected] 7 points 1 year ago (1 children)

Wait... why doesn't the USA have a system like this already?

I always found cryptobro preaching about instant cash transfers perplexing, but this explains a lot.

[–] [email protected] 11 points 1 year ago (1 children)

Financial institutions have been happy with the fees generated by not having this system in place. And the Fed is explicitly not allowed to compete with its member banks.

[–] [email protected] 3 points 1 year ago (2 children)

Isn't ACH a service by the fed? If this is a service for financial institutions, I don't expect them to make it free. I don't see how this changes much except maybe making Zelle obsolete or at least changing the back end of it.

[–] [email protected] 3 points 1 year ago

It will likely reduce money transfer fees overall and decrease average processing time dramatically.

[–] [email protected] 1 points 1 year ago

Not really. ACH is more of a protocol for non-realtime payments. This is for realtime. While there is a fed ACH the largest ACH provider in the US is The Clearing House LLC. Which, as the name suggests, is a private company.