Industry players welcome FedNow faster payments plan
The Fed has been in a journey towards a payment system fit for the 21st century for over five years now. Earlier this year the Fed decided to build its own interbank 24x7x365 real-time gross settlement service with integrated clearing functionality.
The American Bankers Association is amongst others offering their support for these plans and say that FedNow “can contribute to a better, faster and safer payment system if implemented correctly”. However they also state that it must be interoperable with other systems, including the Clearing Houses’ RTP network. The ABA letter goes on to say that “A faster payments ecosystem that does not provide interoperability between systems with similar levels of service and security will fragment the market. It will also result in excessive costs and inefficiencies for banks, increase costs and produce inferior customer experiences.”
FedNow is expected to go live in 2023 or 2024.