BNY Mellon (NYSE:BK) announced it is now live on the Federal Reserve’s new instant payment rail, the FedNow Service, making it one of the first banks to begin sending and receiving payments from participating institutions and support payment activity through settlement or liquidity services.
FedNow will reportedly “operate 24 hours a day, seven days a week, year-round. With the FedNow Service, financial institutions will be able to clear and settle payments instantly at any time.”
Through the FedNow Service, BNY Mellon is positioned “to expand the options for corporations, non-banking financial institutions (NBFIs) and fintechs to move funds instantly, offering choice for bill payments, payroll, instant account funding and more.”
By also participating in a Service Provider role, BNY Mellon will “offer its financial institution clients access to instant payments, helping them remain competitive and offer best-in-class service for their customers.”
Ken Montgomery, Federal Reserve Bank of Boston first vice president and FedNow program executive, said:
“As an early adopter of the FedNow Service, BNY Mellon demonstrates dedication to innovation. Their leadership paves the way for industrywide progress, setting an example for others wanting to play a role in support of a modernized U.S. payment infrastructure.”
BNY Mellon began working “with the FedNow pilot program when it began in January 2021.”
The firm was “one of the early adopters that helped test and provide input on the service.”
It has also completed “a multi-step client testing and certification program in the months leading up to launch.”
Jennifer Barker, Global Head of Treasury Services, BNY Mellon, said:
“We are relentlessly focused on pushing the payments ecosystem forward by delivering new solutions and services for our clients that help support their business more efficiently. By becoming a FedNow Service adopter, we are facilitating broader and deeper access to the financial industry, while creating greater opportunities for our clients to expand their instant payments capabilities.”
Financial institutions and service providers will “continue to onboard throughout 2023 and beyond, helping the FedNow Service build a strong instant payments infrastructure across the U.S.”
Established in 1784, BNY Mellon is America’s oldest bank and “the first company listed on the New York Stock Exchange.”
Today, BNY Mellon “powers capital markets around the world through comprehensive solutions that help clients manage and service their financial assets throughout the investment life cycle.” BNY Mellon had $46.9 trillion in assets “under custody and/or administration and $1.9 trillion in assets under management as of June 30, 2023.”
As covered, The Federal Reserve Banks developed the FedNow Service “to facilitate nationwide reach of instant payment services by financial institutions — regardless of size or geographic location — around the clock, every day of the year.”
Through financial institutions participating in the FedNow Service, businesses and individuals can send and “receive instant payments at any time of day, and recipients have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments.”
Access is provided “through the Federal Reserve’s FedLine® network, which serves more than 10,000 financial institutions directly or through their agents.”