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Federal Reserve: Bringing Payments into the Fast Lane

Author

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  • Timothy Sablik

Abstract

In July, the Fed launched its first new payment service in more than 40 years. FedNow enables money to move instantaneously from sender to recipient 24 hours a day, seven days a week — weekends and holidays included. While there are already mobile payment apps, such as Zelle, Venmo, or Cash App, that appear to instantly transfer funds between users, many of these services still rely behind the scenes on older payment technologies like the Automated Clearing House (ACH) network that can result in some delays. Additionally, these apps are focused on person-to-person payments. In contrast, financial institutions can use FedNow to offer instant processing of all types of payments, including person-to-person, business-to-business, and business-to-customer.

Suggested Citation

  • Timothy Sablik, 2023. "Federal Reserve: Bringing Payments into the Fast Lane," Econ Focus, Federal Reserve Bank of Richmond, vol. 23(3Q), pages 21-24.
    • Handle: RePEc:fip:fedrrf:96706
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    File URL: https://www.richmondfed.org/-/media/RichmondFedOrg/publications/research/econ_focus/2023/q3/federal_reserve.pdf
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    Keywords

    payments; FedNow; Fedwire;
    All these keywords.

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