It’s always great when a major project you are working on is progressing well and you are meeting deadlines. The Federal Reserve Board is experiencing just that and this week publicly made the commitment to the industry that they will launch their real time payments system, FedNow, in 2023. Earlier the Fed was signaling a more cautious 2023-2024 timeframe. Here’s what Finextra posted about the announcement:
“Over the last several months, we’ve made significant strides toward our programme milestones for the FedNow Service,” says Esther George, president and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the FedNow programme. “Based on the FedNow team’s progress, we are pleased to share this updated timeline so the industry can continue to prepare for the adoption of FedNow.”
The launch of the new payments plumbing will operate in a phased approach, beginning with core clearing and settlement functionality and key value-added features, such as a request-for-payment capability and tools to support participants in their handling of payment inquiries, reconcilements and certain exceptions.
We are working hard to respond to the industry’s call for urgency and growing demand for the service, which is evident in the widespread response to our call for pilot participants,” says Kenneth Montgomery, Federal Reserve Bank of Boston first vice president and chief operating officer and FedNow program executive. “As part of our commitment to transparency, we will continue to provide updates and further narrow our launch window as we achieve additional programme milestones.”
This announcement comes on the heels of additional news last month that over 100 financial institutions and processors had joined a pilot program to help the Fed define some of the finer details around the capabilities of the network and participate in launching and testing activities. More on that topic was covered in PaymentsJournal.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group