The Federal Reserve recently reported that, in preparation of the FedNow Service's anticipated launch in July 2023, 57 early adopter firms had successfully completed formal testing and certification.
These firm include financial institutions and service providers and many organizations involved will be live when it launches or soon after, according to a June 29 news release.
"We are on track for the FedNow Service launch, with a strong cohort of financial institutions and service providers of all sizes in the process of completing the final round of readiness testing," Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow executive, said in the release. "With go-live nearing, financial institutions and their industry partners should be confident in moving forward with plans to join the network of organizations participating in the FedNow Service."
When the FedNow Service debuts there will already be many entities operational, the release reported. Financial institutions will be ready to transmit and receive transactions and service providers will be prepared to support transaction activity. The early adopter group is conducting financial service trials currently, to determine whether they are prepared to facilitate live transactions over the new instant payment infrastructure.
The U.S. Department of the Treasury, along with 15 service providers and 41 financial institutions participating as senders, receivers and correspondents supporting settlement are some of these early adopters involved, according to the release.
Financial institutions are anticipated to adopt and expand on the service over time so they can provide clients with immediate payment capabilities, the release said. Montgomery said the FedNew Service is designed to serve various use cases as a platform for innovation, including bill payment, requesting payment and account to account transfers.
The Federal Reserve is developing a strong network and has a goal to reach 10,000 U.S. financial institutions, and part of this effort is working with and onboard financial institutions planning to join later, as well as working with early adopters, the release reported.
The FedNow Service is being developed by the Federal Reserve Banks to enable financial intuitions of all sizes to have rapid pay services nationwide at all times, according to the release. Businesses and individuals will be able to send and receive instant payments through financial institutions taking part in the service at any time during the day. Recipients have full access to funds immediately.
The FedLine network of the Federal Reserve provides services to more than 10,000 financial institutions directly and through agents, the release said.
