The FedNow Service, the Federal Reserve’s new instant payment infrastructure, enables participating U.S. financial institutions to safely and efficiently transfer funds instantly — any day, at any time — on behalf of their customers.
The Federal Reserve is encouraging each of the nation’s more than 9,000 financial institutions to join the growing FedNow Service network to help bring instant payments to American businesses and consumers across the nation.
By joining the FedNow Service, your community bank can improve customer experience, grow revenue and remain competitive in an ever-changing digital world.
The FedNow Service has many resources to help your organization get ready for adoption, including the FedNow Service Readiness Guide and Preplanning Roadmap. Before your bank can begin the onboarding process, it needs to consider the following information and decisions.
- Participation Types: How does your financial institution want to participate in the service? All participant routing transit numbers (RTNs) are required to have a FedNow participant profile. Determine which profile best suits your organization:
- Customer Credit Transfers: Will you offer your customers the ability to both send and receive funds or only to receive payments?
- Request for Payment: Will you enable your customers to initiate or respond to a request for payment?
- Liquidity Management: Does your institution need help managing liquidity for instant payments?
- Settlement Only: If you are planning to serve as a correspondent to other financial institutions, you can choose to only support settlement and receive enhanced reporting.
- Connectivity: How will your organization connect to the FedNow Service? Financial institutions can connect to the FedNow Service directly via an existing or new FedLine® Solution or through a third-party service provider. Consider which type of connection makes the most sense based on your projected volume and resiliency needs.
- Financial institutions that participate in the FedNow Service must settle transactions in a Federal Reserve Master Account, choosing their own account or that of their correspondent.Settlement: Where will your organization settle instant payments?
- Real-time Solutions: Who will you work with to offer real-time solutions to your customers? The right team can help your organization get ready to post funds in real time, meet 24x7x365 availability requirements and ease the transition to seven-day accounting. Determine whether your current core, vendors and internal teams are equipped to support you in the rollout and ongoing participant profile management of the FedNow Service and identify other partners that may be able to help.
To learn more and find planning resources, visit FedNowExplorer.org.
