Getting to know the FedNow Service

Get to Know the Basics of the New FedNow® Service
What you need to know about the Federal Reserve’s groundbreaking instant payments rail, which launches soon.

This summer, the Federal Reserve will launch its first new payment rail in 50 years. This landmark payments infrastructure, known as the FedNow Service, will go live in July 2023. Now is an ideal time for banking and finance professionals to learn more about the FedNow Service, and how it will allow financial institutions of all shapes and sizes to deliver the benefits of instant payments to their business and consumer customers.

What is the FedNow Service?
At its core, the FedNow Service will enable participating U.S. banks and credit unions to safely and efficiently transfer funds instantly—any day, at any time, 365 days a year—on behalf of their customers. From making bill payments last-minute, to getting immediate use of funds, to better managing cash flow, instant payments have the potential to be transformative to our modern way of life.

Unlike an app that consumers access directly to send and receive payments, the FedNow Service operates between financial institutions, making it possible for them to clear and settle payments immediately. Participating financial institutions can use the FedNow Service to build and offer products and services that enable customers to make instant payments powered by the FedNow Service.

How does the FedNow Service work?
The FedNow Service will process and settle individual payments within seconds, 24 hours a day, 7 days a week, 365 days a year, through an existing or new FedLine® Solutions connection. The infrastructure also incorporates clearing capabilities, meaning that participating financial institutions can instantly exchange the information required to debit and credit customer accounts, and also issue notifications (nonsufficient funds, payment confirmation, etc.).

The FedNow Service will debut with core clearing and settlement functionality and value-added features, with more features and enhancements to be added in future releases. These enhancements to the service will continue supporting safety, resiliency and innovation as the FedNow Service network expands in coming years. The FedNow Service is one way the Federal Reserve fosters innovation that can adapt over time to changes in the payments system, while also remaining resilient and accessible.

It is also helpful to know that the Federal Reserve developed the FedNow Service as a result of close collaboration with the broader payments ecosystem, from banks and credit unions to processors, merchants and other stakeholders. For the prior ten years, the private sector has consistently voiced demand for an instant payments system administered under the Federal Reserve’s longstanding role in the payments space.

Why is this a timely moment for the FedNow Service to launch?
In an always-on digital world, people want their money as fast as they can send a text or stream a movie. Demand for faster payment options has broad and strong momentum—among businesses and households alike —and the FedNow Service will help meet that demand.

Survey data demonstrates the extent to which demand for faster and instant payments is gathering steam. According to Federal Reserve studies from 2022, more than 7 in 10 consumers used a mobile device to make a faster payment; a decade ago, that number was 1 in 10. Perhaps it’s no surprise that a similar share of consumers – 70% – prefer accessing faster payment services, such as instant payments, through their primary financial institution.

Businesses are already identifying the benefits—current and potential—of readily available instant payments. According to the data, a large majority of businesses currently use instant payments. Nearly half of all U.S. businesses said instant payments will help them save money, which is set to grow as businesses find faster payments to be an indispensable tool, day in and day out.

However, it’s also important to understand that the launch of the FedNow Service—while exciting—is just the beginning of a longer journey to support the evolution of instant payments nationally, to every community.

How will the FedNow Service help financial institutions and their customers?
Instant payments have the potential to transform our modern way of life. For example:

  • Workers completing their shifts can have access to their wages immediately after payroll funds are deposited into their account.
  • Insurers and emergency relief organizations can instantly disburse funds to people impacted by a natural disaster.
  • Small businesses can use instant proceeds from sales or services to ensure steady cash flow and avoid the costs of short-term credit.
  • Parents can immediately send funds to children, such as college students, who could then use those funds to immediately pay a bill and avoid a late fee.
  • Account holders can move funds from a brokerage or retirement account to a checking account, with no delay in accessing transferred funds.
  • Digital wallet holders can fund or defund their wallets with immediate funds availability.

These examples are just a sampling of the possibilities instant payments can offer. Financial institutions can leverage the FedNow Service to innovate and offer a variety of instant payment use cases.

Banking professionals will also find it helpful to know what the FedNow Service is not. First, the FedNow Service will not replace any other existing Federal Reserve payment rail; wire transfers, ACH, checks and cash all have important roles to play in facilitating payments throughout the economy. Second, the FedNow Service does not use blockchain technology, nor is it a step toward a central bank digital currency, which would require authorization from Congress.

How can financial institutions get started?
The process of joining the FedNow Service is convenient and is able to accommodate many new participants at once. The introduction of the FedNow Service is just the start, and the goal is participation by the nation’s 10,000 banks and credit unions over time.

Don’t get left behind! Financial institutions can contact their Federal Reserve relationship manager to begin the process of understanding and connecting to the FedNow Service.

Professionals interested in learning more about both instant payments and the FedNow Service can visit the FedNow Explorer website (  where they will find helpful, robust resources.

Building the FedNow Service is an important step in the journey to achieve instant payments ubiquity across the United States. Safe and efficient instant payments offer real economic benefits to households and businesses, and the Federal Reserve developed the FedNow Service to ensure those benefits reach communities across the country.

In the coming years, as banks and credit unions sign up and the network grows, more and more individuals and businesses will realize the benefits of instant payments. The Federal Reserve is encouraging each of the nation’s banks and credit unions to get on board to ensure widespread access.

The FedNow Service will be live this summer! Financial institutions interested in participating in the FedNow Service can contact their Federal Reserve relationship manager. Professionals who’d like to expand their awareness of the service can visit the FedNow Explorer website.

The Federal Reserve Financial Services logo, “FedNow” and “FedLine” are registered service marks of the Federal Reserve Banks. A list of marks related to financial services products that are offered to financial institutions by the Federal Reserve Banks is available at
© 2023 Federal Reserve Banks