The Fed launched its long-awaited fast payment service, a modern system

The US Federal Reserve has. The long-awaited service began It aims to modernize the nation’s payments system, ultimately allowing everyday Americans to send and receive money in seconds 24 hours a day, seven days a week, the central bank announced Thursday. From one report: In the year The “FedNow” service, which has been in operation since 2019, seeks to eliminate the multi-day delay that typically occurs with money transfers, bringing the U.S. into line with countries that have had similar services for years, including the United Kingdom, India, Brazil and the European Union. FedNow has 41 banks and 15 service providers certified to use the service, including community banks and large lenders such as JPMorgan Chase, Bank of New York Mellon and US Bancorp, but the Fed plans to bring more banks and credit unions on board this year.

The Fed said in a statement Thursday that 35 banks and credit unions are using the service, as well as the Treasury’s Office of Financial Services. The service competes with private sector real-time payment systems, including The Clearing House’s RTP network, and was initially opposed by the big banks. But many have agreed to participate as FedNow allows them to expand the services they can offer to customers. “For us, FedNow is a way to really expand our reach,” said Anu Somani, head of global payments and embedded payments at US Bank. Unlike peer-to-peer payment services like Venmo or PayPal, which act as intermediaries between banks, payments made through FedNow are deposited directly into central bank accounts.