Key Points
The new service, called 'FedNow', will initially launch with 41 banks and 15 service providers, including community banks and large lenders such as JPMorgan Chase, Bank of New York Mellon and US Bancorp, with plans to add more banks and credit unions later this year...
The Federal Reserve has been working on the service since 2019, but it was initially opposed by the big banks, who argued it was redundant, but later agreed to participate as they believe FedNow will expand the services they can offer their customers..
The Fed already operates a real-time payments system called FedWire for large, mostly corporate payments, but the service is only available during business hours, unlike FedNow, which will be available 24/7..
The new service differs from peer-to-peer services such as PayPal and Venmo in that payments made through FedNow will be directly settled into central bank accounts..
