The FedNow Service is here. Is your bank ready?


With the FedNow Service now live, early adopter financial institutions have begun sending and receiving payments instantly on behalf of their customers using the all-new payments infrastructure. It is an advancement that individuals and businesses say they want — according to a recent Federal Reserve study, 7 in 10 respondents state that it’s important for their financial institutions to offer faster payment services.

If your organization is currently weighing the benefits of offering instant payments through the FedNow Service, read on for insights from industry leaders who have helped their institutions prepare to do just that. They share predictions on how instant payments will impact their customers, lessons learned from preparing for implementation, and perspectives on the rapid pace of change in the payments industry.

Meet customer demand
Early adopters of the FedNow Service and organizations that participated in the service’s pilot program cite increasing inquiries about instant payments as a key driving factor behind their respective institutions’ decision to get on board with the service early.

  • “Our customers count on us when they have important and time-sensitive payments to make, and instant payments will be another tool in our toolkit,” says Blayne Furey, vice president and management information systems officer at Freedom Bank in Montana. “Our wire payment activity has more than doubled over the past five years and is on track to continue growing. Some of this was caused by shifts during the pandemic, but we recognize the growing demand for same-day funds delivery and settlement. Instant payments will allow us to offer the same finality but with the added benefits of instant delivery and the elimination of time restrictions we see with other payment methods.”
  • Suzy Morris, senior vice president and head of treasury management at Peoples National Bank in Illinois says, “We knew the FedNow Service would be important early on. Since we were already offering instant payments services through the private sector, we were able to understand market demand, user activity and forecast growth based on the Federal Reserve’s widespread access. From a customer perspective, the current environment has conditioned them to expect instantaneous transactions. While our customers might think this happens seamlessly, we know there are many touch points and higher costs involved with direct deposit, ACH or even wire payments. For us, the FedNow Service delivers on customer expectations while providing a better overall solution.”

Anticipate industry impact
Many FedNow Pilot Program participants believe that instant payments are revolutionizing the payments industry. Over time, they anticipate that instant payments will be the standard for many use cases for their retail and business customers as adoption grows and bank customers become accustomed to the ease and speed of instant payments.

  • Kevin Olsen, senior vice president of innovation and strategy at Pidgin, a service provider in Georgia, compares the current transformations in the payment industry to the mainstreaming of smartphones a decade ago. “Before we had [smartphones], we didn’t know what we were missing. But now, we are so used to having the convenience and information at our fingertips that we can’t imagine life without them. The same will happen when it comes to instant payments — as they become standard throughout the industry, we will become accustomed to having the ability to put money into the hands of people who need it at any time of day.”
  • According to David Long, executive vice president of Bryant Bank in Alabama, “It will be a process similar to what we’ve seen for other payment rails we utilize every day. I truly think that the market will find applications that solve issues for our customers and for the industry as instant payments become more commonplace in daily life and business.”

Identify instant payment uses
Considering which instant payment use cases will resonate with customers is a critical initial step to deciding to adopt the FedNow Service, say early adopters. They share some of their top picks below — more use cases can be found in the Use Case Arena on the Federal Reserve’s FedNow Explorer website.

  • “We see a pressing need for innovation within traditional banking bill pay solutions,” says Rob Ames, senior vice president and head of digital delivery at Salem Five Bank in Massachusetts. “Our customers’ bill pay usage over the past few years has shown a portion of transactions migrating from our bill pay solution to direct billers, meaning some consumers are paying bills using a direct biller to receive real-time acknowledgment of the payment. We look forward to the day when our bill pay solution has an instant payment option, because it can reduce that migration.”
  • Kevin Olsen at Pidgin adds: “One of the biggest use cases we see is for loan payments. We want to give community credit unions and community banks the ability to collect and process loan payments instantaneously so it’s beneficial for both sides. That means no heartache over late fees or penalized credit scores for consumers.”
  • And according to Malinda Rickel, chief operating officer at The Bankers’ Bank in Oklahoma, “In my opinion, our client base will benefit the most from request for payment (RFP) use cases. Small businesses need the ability to send an invoice with their request and have that request and invoice returned to them with the correct information. I can’t think of a use case that could benefit a small business more than automating their payables systems.”

Plan for success from the start
To start the FedNow Service adoption journey with your best foot forward, early adopters say they have focused on building a business case and gaining the commitment of the organization’s leadership. The next step is assembling a strong team and forging strategic partnerships.

  • Suzy Morris of Peoples National Bank provides insight into how she started the conversation about the FedNow Service. “First, I presented the opportunity and potential business impact and benefits to our CEO and COO,” Morris says. “This was important because our CEO led the way in broadcasting the plan and communicating with our board of directors. The second step was getting tech involved to prepare for upgrades to our access points. From there, it was a matter of bringing in operations and helping that team understand how to process instant transactions and create workflows through the organization. Instant payments touch so many parts of an organization — it’s very important to bring each team in early on.”
  • “This is not something that our 27-person staff was prepared to develop and launch on our own!” says Freedom Bank’s Blayne Furey. “We need strategic partnerships and are exploring service provider solutions to decide what customer-facing tools to use. We’ve also been meeting regularly with our core provider to make sure posting and settlement functionality is ready regardless of what other solutions we implement.”
  • “You do not have to be all things to all people,” adds Olsen. “As a service provider, we want community financial institutions to understand they do not have to be technologists when they are planning for instant payments implementation. They can be what they are good at, and that is being operational partners for their account holders.”

Build a network
When considering the advice they would offer institutions that are evaluating adopting the FedNow Service, early adopters note that the infrastructure will not only benefit their customers but also help to build instant payments ubiquity across the payments industry over time.

  • Bryant Bank’s David Long says, “Full industry participation will lead to the most effective instant payments capabilities. If you are not at least in the database as a participant, you will be limited in receiving some instant payments. This has major implications for use cases like payroll, which is something that is beneficial to process in seconds versus having to wait until end of day after it’s posted to your core.”
  • “The more financial institutions connecting to the network, the better the opportunity for the industry to transact on it — that’s one of the biggest takeaways,” Morris says. “Customer satisfaction is also a huge driver. You also can start with minimal risk as a receive-only participant, which will allow you to take advantage of final settlement and create a more seamless customer experience.”
  • “Offering an instant payment service suggests an institution is evolving with the industry and able to provide services their customers expect”, says Olsen. “Payments are going to steadily evolve. I believe we’re going see fewer checks, fewer wires, and we will absolutely see the prevalence of instant payments.”

Want to start your own instant payments journey, but not sure where to begin? The FedNow Service provides financial institutions the opportunity to improve customer satisfaction, grow revenue and save on costs. Learn more about instant payments and how to prepare for the FedNow Service at or contact your Federal Reserve relationship manager.