by Brian Shilhavy, Health Impact News:
57 “early adopter organizations” have now been certified to participate in the U.S. Federal Reserve’s FedNow instant payments program that will be rolled out later this month (July, 2023).
On June 29, 2023, the Federal Reserve announced that 57 early adopter organizations, including financial institutions and service providers, had completed formal testing and certification on the FedNow Service in advance of its launch in late July. Many of these organizations will be live when the FedNow Service launches or shortly after, with financial institutions ready to send and receive transactions and service providers ready to support transaction activity.
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This group of early adopters is now performing final trial runs on the service to confirm their readiness to support live transactions over the new instant payments infrastructure. The early adopters include 41 financial institutions participating as senders, receivers and/or correspondents supporting settlement, 15 service providers processing on behalf of participants, and the U.S. Department of the Treasury.
In addition to the initial adopters, the Federal Reserve continues to work with and onboard financial institutions and service providers planning to join later in 2023 and beyond, as the initial step to growing a robust network aimed at reaching all 10,000 U.S. financial institutions. (Source.)
Here is the list of organizations that have completed certification in the FedNow Service:
Participants
- 1st Bank Yuma
- 1st Source Bank
- Adyen
- Alloya Corporate Federal Credit Union
- Atlantic Community Bankers Bank
- Avidia Bank
- Bankers’ Bank of the West
- BNY Mellon
- Bridge Community Bank
- Bryant Bank
- Buffalo Federal Bank
- Catalyst Corporate Federal Credit Union
- Community Bankers’ Bank
- Consumers Cooperative Credit Union
- Corporate America Credit Union
- Corporate One Federal Credit Union
- Eastern Corporate Federal Credit Union
- First Internet Bank of Indiana
- Global Innovations Bank
- HawaiiUSA Federal Credit Union
- JPMorgan Chase
- Malaga Bank
- Mediapolis Savings Bank
- Michigan Schools & Government Credit Union
- Millennium Corporate Credit Union
- Nicolet National Bank
- North American Banking Company
- PCBB
- Peoples Bank
- Pima Federal Credit Union
- Quad City Bank & Trust
- Salem Five Bank
- Star One Credit Union
- The Bankers Bank
- United Bankers’ Bank
- U.S. Bank
- U.S. Century Bank
- U.S. Department of the Treasury’s Bureau of the Fiscal Service
- Veridian Credit Union
- Vizo Financial Corporate Credit Union
- Wells Fargo Bank, N.A.
Service Providers
- ACI Worldwide Corp.
- Alacriti
- Aptys Solutions
- ECS Fin Inc.
- Finastra
- Finzly
- FIS
- Fiserv Solutions, LLC
- FPS GOLD
- Jack Henry
- Juniper Payments, a PSCU Company
- Open Payment Network
- Pidgin, Inc.
- Temenos
- Vertifi Software, LLC
What is FedNow?
From the source:
The FedNow Service is a new instant payment infrastructure developed by the Federal Reserve that allows financial institutions of every size across the U.S. to provide safe and efficient instant payment services.
Through financial institutions participating in the FedNow Service, businesses and individuals can send and receive instant payments in real time, around the clock, every day of the year. Financial institutions and their service providers can use the service to provide innovative instant payment services to customers, and recipients will have full access to funds immediately, allowing for greater financial flexibility when making time-sensitive payments.
The FedNow Service will be deployed in phases, with the initial launch taking place July 2023.
The video below follows a payment over the FedNow Service from start to finish, highlighting what financial institutions need to know about their role in the process.
Cleveland Federal Reserve President Loretta Mester Admits Banks Can Limit Withdrawals via FedNow to Avoid “Banking Crisis”
Cleveland Federal Reserve President Loretta Mester. Image source.
Cleveland Federal Reserve President Loretta Mester stated yesterday that the FedNow program “should help ensure financial stability should bank stress arise,” by limiting withdrawals.
Banks can manage outflow risk in Fed’s new payment service system, Mester says
Cleveland Federal Reserve President Loretta Mester said on Wednesday that the U.S. central bank’s new real-time money moving system is being designed in a way that should help ensure financial stability should bank stress arise.
Mester acknowledged concerns that FedNow, a real-time, all-hours payment system the central bank is making available to banks, could exacerbate banking troubles by facilitating fast outflows from financial institutions, in effect super-charging a potential bank run.
She said it will be up to the users of FedNow themselves to use transfer limits.
“Banks have tools they could use to mitigate large outflows of deposits,” including limiting how much money can be moved over a given period, restricting who can use the system, and firms can determine which direction money can flow in real time, Mester said in a speech to the National Bureau of Economic Research Summer Institute.
“Future releases of the FedNow Service may allow configurable transaction limits by customer type, if such limits are deemed useful,” she added. (Full article. Emphasis added.)
I wonder how the Federal Reserve is defining “customer type”?
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