IS YOUR BANK READY TO ACCELERATE PAYMENTS WITH THE FEDNOW SERVICE? By Greg Aumann Senior Product Manager for ACH, CSI ICBC Associate Member The Federal Reserve’s FedNow® Service, which launched July 20, 2023, promises to revolutionize money movement by enabling more banks to process instant payments and provide unparalleled convenience to consumers and businesses alike. Unlike traditional payment methods that can take hours or even days to complete, real-time payments process within seconds and allow payment recipients to access funds right away. This article explores the benefits of FedNow instant payments and the steps banks can take to participate. BENEFITS OF THE FEDNOW INSTANT PAYMENTS The FedNow Service is an instant payment network, designed to allow individuals and businesses to send and receive payments in real time, 24/7. FedNow introduces an alternative to existing payment systems. The resulting competition will encourage technological advancements, lower transaction costs and foster a more robust and modern payment ecosystem. The primary benefit of the FedNow Service is the ability to process payments instantly, which enables financial institutions to stay competitive in a rapidly evolving market. With the reliance on digital banking, consumers expect their transactions to be quick and seamless. By offering instant payments, banks can attract and retain customers who prioritize convenience and speed. With the FedNow Service, financial institutions can also eliminate the need for costly intermediaries and streamline their payment processes. 18 | INDEPENDENT REPORT
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