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Data for today’s episode is provided by Mercator Advisory Group’s report – Business-to-Business Faster Payments: Market Review and Forecast 2018–2023
What We Know About FedNow:
- The Fed’s declared intent is to create a new system, not additions to Fedwire or ACH
- Like TCH’s RTP platform, FedNow will operate as a ‘credit only’ function
- FedNow will operate as a Real-Time Gross Settlement system, on a payment-by-payment basis
- Settlement will be conducted through debits & credits to bank balances at the Reserve Banks
- Banks that are not Fed members may use a service provider or agent
- Messaging will follow the ISO 20022 standard, & transactions irrevocable
- Initial transactions will be limited to $25,000
About this report
The pace has increased in the march toward ubiquity. Financial institutions of all sizes should be actively delivering or planning to incorporate one or more of the existing faster payments solutions for clients as business interest rises.