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The headquarters of the Federal Reserve Bank of Boston. Photo Courtesy of Fox-orian / CC BY-SA 3.0
The FedNow Service, the Federal Reserve’s real-time payments platform, will launch in July.
The Federal Reserve said in a statement Wednesday that the certification process for institutions will begin in the first week of April. To prepare for sending live transactions through the system, early adopters will complete a customer testing and certification program that has been developed based on feedback from FedNow’s pilot program.
“Certification encompasses a comprehensive testing curriculum with defined expectations for operational readiness and network experience,” the Federal Reserve said.
Participants that have been certified will then conduct production validation activities with the Federal Reserve in June to confirm they are ready for the July launch.
“We couldn’t be more excited about the forthcoming FedNow launch, which will enable every participating financial institution, the smallest to the largest and from all corners of the country, to offer a modern instant payment solution,” Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow program executive, said in the statement. “With the launch drawing near, we urge financial institutions and their industry partners to move full steam ahead with preparations to join the FedNow Service.”
The Federal Reserve said many early adopters intend to use the service starting in July, including a mix of financial institutions of all sizes, large processors and the U.S. Treasury.
The Federal Reserve said it will continue to work throughout 2023 and beyond with other financial institutions and service providers to complete the testing and certification program to implement FedNow. Montgomery said adding more financial institutions to the network will be key to making instant payments more available to consumers and businesses.
FedNow’s features at the outset will include core clearing and settlement functionality. As FedNow expands in the coming years, the system will have additional features and enhancements in future releases to continue supporting safety, resiliency and innovation in the industry, the statement said.
“With the FedNow Service, the Federal Reserve is creating a leading-edge payments system that is resilient, adaptive, and accessible,” Tom Barkin, president of the Federal Reserve Bank of Richmond and FedNow Program executive sponsor, said in the statement. “The launch reflects an important milestone in the journey to help financial institutions serve customer needs for instant payments to better support nearly every aspect of our economy.”
