Our special guest is Professor Dan Awrey of Cornell Law School. In July 2023, the Federal Reserve launched FedNow, its instant payments system. After reviewing what FedNow is (and is not), we discuss FedNow’s design features and pricing schedule, the obstacles that currently exist for usage of FedNow by community banks, and what changes can be made to increase FedNow usage by community banks. We… Continue Reading
After discussing the core features of the U.S. payments systems, we look at how those features have impacted the experience of U.S. business and consumers and why Professor Awrey believes they have resulted in a payments system that is worse, more expensive, and slower than payments systems in other large, developed countries. … Continue Reading
Earlier this week, the Federal Reserve Board of Governors narrowed the timetable for the launch of its instant payments platform—FedNow—to mid-year 2023, specifically targeting a production rollout of the service in a May to July 2023 timeframe. The Fed had previously communicated a 2023 launch. In September 2022, the FedNow Pilot Program will begin technical testing for the service.… Continue Reading
On February 2, 2021, the Federal Reserve (“Fed”) announced that the launch date for its instant payments platform—FedNow—would be sooner than originally expected. The announcement narrows the delivery timeframe by a full year.
FedNow provides interbank clearing and settlement, which enables funds to be transferred between banks and credited to accounts in near real-time. … Continue Reading
The Federal Reserve Board recently issued a Service Announcement setting forth the details of its FedNow Service, a new 24x7x365 interbank settlement service with clearing functionality to support instant payments in the United States.
The Federal Reserve Board has determined that the Federal Reserve should take the following two actions:
- Develop a new interbank 24x7x365 real-time gross settlement (RTGS) service to be offered by the Federal Reserve Banks to directly support faster payments and to be called the FedNow Service
- Explore expanding the hours of the Fedwire Funds Service and the National Settlement Service (NSS), up to 24x7x365 to support liquidity management in private-sector RTGS services for faster payments
The Fed’s determination is set forth in a notice and request for comment issued on August 5, with comments to be due on or before 90 days after the date the notice is published in the Federal Register. … Continue Reading