SPONSORED CONTENT by Federal Reserve Financial Services
The Federal Reserve has made several announcements this fall about key developments on the FedNow Service. Whether your bank or credit union is already participating in the FedNow Service or you’re still thinking about joining the instant payments network, you don’t want to miss these exciting updates.
Participation and volume continue to grow. FedNow Service transaction volume has grown 645% year over year, from 3,657 transactions daily to 27,239 1
Additionally, participant numbers continue to rise as more and more financial institutions shift their perspective of instant payments being a “nice to have” to a “must have” to meet customer demands and remain competitive in today’s payments landscape.
Today, more than 1,500 participating financial institutions headquartered in all 50 states are live on the service. These institutions are well positioned to meet customer demands—recent surveys from Federal Reserve Financial Services show that more than two-thirds of businesses would use instant payments if offered to them. Similarly, 60% of consumers say it’s important for their financial institution to offer instant payments.
Dollar values and volume of transactions are expected to grow over time as more financial institutions join the network and advance their instant payment offerings. The number of financial institutions sending on the network, along with the service providers that support them, continues to increase. In fact, the number of senders has tripled since the FedNow Service launched in July 2023, and 98% of participants have received a payment.
Key transaction types that financial institutions are making over the FedNow Service include off-cycle payroll and earned wage access, digital wallet defunding, real estate escrow payments, auto loan disbursements, online marketplace seller payouts, and more.
FedNow Service now available for instant federal agency disbursements. The U.S. Department of the Treasury’s Bureau of the Fiscal Service announced it has added the FedNow Service for instant disbursements for federal agencies, including FEMA, as part of its Digital Payout program.
The inclusion of the FedNow Service into Treasury’s Digital Payout program will equip agencies with a modern and efficient way to provide instant payments to individuals and organizations across the country.
“The expansion of instant payments into federal disbursements is significant—it brings immediacy of money movement to people when they need it most,” said Mark Gould, chief payments executive for Federal Reserve Financial Services. “The ability to meet need with speed will be a key differentiator for both agencies and financial institutions that participate in the FedNow Service. We look forward to the benefits that greater access to instant payments will bring to more people’s lives.”
Network transaction limit will increase to $10 million in November. The FedNow Service network transaction limit will increase from $1 million to $10 million in response to growing commercial demand, effective November 2025. The increased limit will enable financial institutions and businesses to support higher-value use cases and reflects an increasing need for speed and certainty in the modern payments ecosystem.
“Our second transaction limit increase this year reflects the growing demand for instant payments—as the benefits of immediate funds availability for all types of payments become more apparent, financial institutions need flexibility to serve customers and support internal processes,” Gould said. “The FedNow Service is shaping how we move money, and the service will continue to be flexible to meet evolving feedback and increasing demand.”
The increased network transaction limit for customer credit transfers positions the FedNow Service to support additional high-value use cases such as corporate treasury, corporate payroll, vendor payments, and real estate transactions.
Financial institutions will continue to have the flexibility to set lower transaction limits based on internal risk parameters and business needs. Recently introduced risk mitigation tools like account activity thresholds also provide participants with greater control and confidence as they expand their instant payment offerings.
New risk controls deliver enhanced network intelligence and reporting. The Federal Reserve is currently engaging with pilot participants—financial institutions and service providers—on a network intelligence tool that will allow financial institutions sending transactions over the FedNow Service to request information (“data insights”) via an API about a receiver account before submitting a transaction to the FedNow Service. This will allow financial institutions to:
- Better identify the risk of a potential payment by doing a pre-check on a receiver account
- Leverage network-level data insights to complement their own payment data and fraud mitigation processes to decide whether to proceed with sending a payment
“Fraud mitigation is a priority for any payment rail,” Gould said. “While our customers have reported seeing very little fraud on the FedNow Service, we are continually evolving the service to strengthen its security and to provide customers with tools to minimize risk.”
In addition to the network intelligence pilot, the service added the Federal Reserve’s ScamClassifierSM model to its fraud reporting process, allowing participants to provide additional details on suspicious transactions.
Exception Resolution Service now includes FedNow Service transactions. FedNow Service participants can now use the Exception Resolution Service to directly communicate with one another to ensure that exceptions—such as disputes, notifications, questions, or requests for additional information—can be resolved swiftly and effectively for instant payments.
Federal Reserve Financial Services expanded the Exception Resolution Service beyond ACH transactions in response to industry feedback that FedNow participants were looking for a way to efficiently resolve exception management cases.
Allowing FedNow participants to communicate directly via the Exception Resolution Service offers numerous benefits, including simplified exception management, strengthened operational efficiency, and improved transparency.
The Federal Reserve is committed to working with the industry to continually develop and enhance the FedNow Service to meet the needs of financial institutions, the people, and businesses they serve, and others in the payments ecosystem.
To learn more about these recent developments, read this Q&A with FRFS Chief Payments Executive Mark Gould about volume growth, new product features, and other recent developments on the FedNow Service.
For all the latest updates about the service, visit FedNowExplorer.org.
