The service will compete with private sector real-time payments systems, including The Clearing House's RTP network, and was initially opposed by big banks who said it was redundant.
Unlike peer-to-peer payments services like Venmo or PayPal, which act as intermediaries between banks, payments made via FedNow will settle directly in central bank accounts.
The Fed also operates a real-time payments system called FedWire, but that's reserved for large-scale, mostly corporate payments and is only operational during business hours.
While the new FedNow system is for everyone, it's likely to benefit consumers and small businesses the most, analysts have said.
But Fed officials have downplayed those concerns, arguing that banks have tools available to mitigate a wave of outflows.
Persons:
JPMorgan Chase, FedNow, Anu Somani, it's, ”, Carl Slabicki, Lance Noggle, Hannah Lang, Michelle Price, Andrea Ricci
Organizations:
U.S . Federal, European Union, JPMorgan, Bank of New York Mellon, US Bancorp, RTP, U.S . Bank, PayPal, Fed, Mellon’s Treasury Services, “, Independent Community Bankers of, Thomson
Locations:
United Kingdom, India, Brazil, FedNow, Independent Community Bankers of America, Silicon, Washington