Federal Reserve Launches New Instant Payment Service

Transactions can be made between bank accounts and enable funds to be transferred from a sender's bank account to a receiver's account immediately.

The Federal Reserve officially launched its anticipated instant payment service.

‘FedNow’ allows Americans to pay for groceries instantly, businesses to pay their suppliers, or people to pay each other. It will be made available 24 hours a day, every day of the year, with full access to funds immediately.

The system is not offered directly to individuals and businesses, but it will serve as the basis of infrastructure for instant payments by linking banks. Transactions can be made between bank accounts and enable funds to be transferred from a sender’s bank account to a receiver’s account immediately.

The limit per customer credit transaction will be $500 thousand, but the initial setting of the transaction limit will be $100 thousand.

The Federal Reserve said the new service was built to assist in making everyday payments over the coming years, faster and more convenient.