The Federal Reserve’s new instant payments service, FedNow, has gone live with 35 banks and credit unions participating, the central bank announced Thursday. Major banks JPMorgan Chase and Wells Fargo are among the early adopters, with 16 other institutions supporting processing of payments that the Fed argues will offer just-in-time access to paychecks and invoices.
The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient, Federal Reserve Chair Jerome Powell said in a statement. The service will operate for 24 hours every single day, allowing payments to be processed in a matter of seconds, compared to same-day service from the existing U.S. automated clearinghouse system or delays of days or weeks for cashing a check.
The FedNow service is seen as a way to avoid having to depend on private sector alternatives, like the now-abandoned stablecoin Diem (previously named Libra) by Marc Zuckerberg’s Meta (previously Facebook), while some have seen it as a step towards a central bank digital currency.