Settlement Assessment

The Federal Reserve reached a milestone in the development of the FedNowSM Service with the August 6, 2020, announcement of the service’s features and functionality. This announcement reflects the Federal Reserve’s efforts toward establishing an infrastructure that will support instant payments in the United States. Industry feedback and in-depth analysis, including over 180 comment letters (Off-site) in response to the August 2019 Federal Register notice (Off-site), helped drive the FedNow Service features and design.

The milestone follows an August 2019 announcement by the Federal Reserve Board that the Reserve Banks would develop the FedNow Service, a new 24x7x365 instant payment service to help bring the benefits of safe, efficient instant payments to communities across the country. The decision to develop the service (Off-site) was based on an assessment of public input and policy criteria regarding the Federal Reserve’s role in the payment system.

Keep up with the latest FedNow news and instant payments education on the FedNow Service (Off-site) page on FRBservices.org®. To help inform the development of the FedNow Service, join the FedNow Community (Off-site) by submitting the participant profile form (Off-site). If you do not want to commit to the FedNow Community but would like to receive FedNow emails, please submit the FedNow Service Interest Form (Off-site).

Background on the Settlement Assessment

In the fall of 2018, after considering requests from stakeholders, the Board requested comment via a Federal Register notice (Off-site) on potential actions the Federal Reserve could take to facilitate interbank settlement of faster payments. In response, the Board received more than 400 comments (Off-site) from a wide variety of stakeholders in the U.S. payment system, including financial institutions, individuals, consumer organizations, merchants, service providers, private-sector operators, fintech companies and trade organizations. Of those expressing an opinion, the overwhelming majority called for the Federal Reserve to operate a real-time, interbank gross settlement service for instant payments.

For More Context

The Federal Reserve held public town hall meetings in each of its 12 districts and hosted a webinar to help build an understanding of the 2018 Federal Register notice with stakeholders all across the nation. Review the town hall presentation and watch the webinar recording below for more background information.