The Federal Reserve has reportedly changed the timing of the introduction of its real-time payments solution, called FedNow, to the middle of 2023.
The US Federal Reserve is aiming for a full-scale production rollout of the new payments service for somewhere between May and July 2023. Once it’s live, it would bring to conclusion an extensive journey and would help the US along a journey towards a payments platform that can meet the requirements of 21st century consumers.
Over 120 organizations are reportedly taking part in this pilot program for the new service, with technical testing expected to commence at the start of this month.
When it goes lives, FedNow should become accessible to financial institutions of all sizes, allowing them to offer firms and consumers with the option to carry out instant payments more efficiently.
In a recent speech, Fed Vice Chair Lael Brainard said that the private sector must be prepared for the change.
“Just as the Federal Reserve has made a substantial commitment to our new instant payment infrastructure, we are calling on industry stakeholders to do the same. The shift to real-time payment infrastructure requires a focused effort, but the shift is inevitable. The time is now for all key stakeholders—financial institutions, core service providers, software companies, and application developers—to devote the resources necessary to support instant payments.”
“This means upgrading back-office processes, evaluating accounting procedures to accommodate a seven-business-day week, arranging liquidity providers, deploying a new customer-facing application, and promoting instant payments for key use cases to customers.”
The introduction of this service is coming at a certain cost.
In June 2022, the Fed announced that it would be postponing the launch of the ISO 20022 payment messaging format to 2025. This move came as a response to bank concerns that this process was affecting FedNow’s rollout.