Understanding FedNow Program
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In case you’ve not yet heard about the FedNow program, please feel free to view the press release previously released on March 15, 2023, in italics, below:
The Service will Debut with Financial Institutions and the U.S. Treasury on Board
CHICAGO – The Federal Reserve announced that the FedNow Service will start operating in July and provided details on preparations for launch.
The first week of April, the Federal Reserve will begin the formal certification of participants for launch of the service. Early adopters will complete a customer testing and certification program, informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system.
Certification encompasses a comprehensive testing curriculum with defined expectations for operational readiness and network experience. In June, the Federal Reserve and certified participants will conduct production validation activities to confirm readiness for the July launch.
“We couldn’t be more excited about the forthcoming FedNow launch, which will enable every participating financial institution, the smallest to the largest and from all corners of the country, to offer a modern instant payment solution,” said Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow program executive. “With the launch drawing near, we urge financial institutions and their industry partners to move full steam ahead with preparations to join the FedNow Service.”
Many early adopters have declared their intent to begin using the service in July, including a diverse mix of financial institutions of all sizes, the largest processors, and the U.S. Treasury.
In addition to preparing early adopters for the July launch, the Federal Reserve continues to engage a range of financial institutions and service providers to complete the testing and certification program and implement the service throughout 2023 and beyond. Montgomery noted that availability of the service is just the beginning, and growing the network of participating financial institutions will be key to increasing the availability of instant payments for consumers and businesses across the country.
The FedNow Service will launch with a robust set of core clearing and settlement functionality and value-added features. More features and enhancements will be added in future releases to continue supporting safety, resiliency and innovation in the industry as the FedNow network expands in the coming years.
“With the FedNow Service, the Federal Reserve is creating a leading-edge payments system that is resilient, adaptive, and accessible,” said Tom Barkin, president of the Federal Reserve Bank of Richmond and FedNow Program executive sponsor. “The launch reflects an important milestone in the journey to help financial institutions serve customer needs for instant payments to better support nearly every aspect of our economy.”
About the FedNow Service
The Federal Reserve Banks are developing the FedNow Service to facilitate nationwide reach of instant payment services by financial institutions — regardless of size or geographic location — around the clock, every day of the year. Through financial institutions participating in the FedNow Service, businesses and individuals will be able to send and receive instant payments at any time of day, and recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments. Access will be provided through the Federal Reserve’s FedLine® network, which serves more than 10,000 financial institutions directly or through their agents. For more information, visit FedNowExplorer.org.
Get a preview of how the FedNow Service payment flow will work and the benefits instant payments can provide to financial institutions and the people and businesses they serve. The FedNow Service will give financial institutions of all sizes the opportunity to innovate and offer instant payment solutions that customers are increasingly demanding in today’s fast-paced world, in the video published on Feb 8, 2023, by FRB Services, as “How the FedNow (SM) Service will work“, below:
Watch this video for a look at one way the payments ecosystem could use the FedNow Service’s request for payment (RFP) feature to build and offer instant bill pay solutions. The video follows the story of a hypothetical lawn care business that works with its financial institution and a service provider to set up recurring RFP billing for its customers. With RFP, the lawn care company benefits from streamlined, straight-through processing. And its customers gain more control of their cash flow by precisely timing their payments, in the video published on Aug 18, 2022, by FRB Services, as “Get to know the FedNow (SM) Service’s request for payment feature“, below:
What is FedNow? Fed Now Instant Payment. Is FedNow a CBDC? The FedNow Service will be available to depository institutions in the United States and will enable individuals and businesses to send instant payments through their depository institution accounts. The service is intended to be a flexible, neutral platform that supports a broad variety of instant payments. The service will have a 24-hour business day each day of the week, including weekends and holidays, in the video published on March 16, 2023, by Tony Denaro, as “What is FedNow? Instant Payment? CBDC?” below:
Richard Werner, Economics Professor and Author of “Princes of the Yen,” and Michelle Makori, Editor-in-Chief and Lead Anchor at Kitco News, discuss the Federal Reserve’s FedNow instant payments system, and whether it will be used to usher in Central Bank Digital Currencies (CBDCs), digital tokens issued and controlled by central banks. Werner explains what CBDCs are, and warns that they will be used to bring about ‘totalitarian’ control and a surveillance economy. He also proposes that the recent banking crisis and consolidation of banks could be used as an excuse to bring about CBDCs, and suggests political solutions that might prevent CBDCs from being implemented, in the video published on March 20, 2023, by Kitco NEWS, as “FedNow launched in midst of banking crisis, is it a precursor to CBDCs, ‘totalitarian’ control?” below:
In the video published on March 18, 2023, by CoinDesk, as “Federal Reserve’s New Instant Payments System ‘FedNow’ To Launch in July“, below:
In the video published on March 17, 2023, by Lena Petrova, as “Fed Is Launching DIGITAL Payment System To Usher In CBDC | FEdNow Is Launching In July 2023“, below:
Is this the end? What’s up with FedNow? Are CBDCs here for good? How much time do we have? And, the big one: how does gold and silver fit in? Don’t worry, by the way, there’s time to plan, in the video published on March 21, 2023, by 2 is 1, as “FedNow, CBDCs, the Future of Banking, and Gold“, below:
Steve Forbes warns against the Federal Reserve’s possible Central Bank Digital Currency initiative, in the video published on Dec 15, 2022, by Forbes, as “Fed’s ‘Digital Dollar’ Idea Has Frightening Implications For Privacy And Freedom| What’s Ahead“, below:
Gathered, written, and posted by Windermere Sun-Susan Sun Nunamaker More about the community at www.WindermereSun.com
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