FedNow launches in the US | TechCrunch

Title: FedNow Service: Revolutionizing Instant Payments in the U.S.


The U.S. government’s long-awaited instant payment system, FedNow Service, has finally gone live. This groundbreaking infrastructure promises to revolutionize the way money is transferred by offering immediate access to funds regardless of the time or day. In this article, we will delve into the features and potential impact of FedNow, as well as explore industry reactions and the future of instant payments in the United States.

Understanding FedNow Service

FedNow is an instant payment system designed to provide faster payment rails for financial institutions. Unlike traditional banking systems that operate within limited hours, FedNow ensures that individuals and businesses can receive and use funds instantly, 24/7. This eliminates the need for delayed transactions or relying on payday loans for immediate financial needs.

The U.S. Catching Up

While the launch of FedNow is a significant milestone for the United States, it is worth noting that other countries have already implemented similar instant payment services. Brazil, India, the United Kingdom, and the European Union have been live with their instant payment systems for some time. FedNow aims to bridge this gap and bring the U.S. up to speed with global counterparts.

Accessibility for Financial Institutions

The Federal Reserve has made FedNow accessible to banks and credit unions of all sizes. Already, approximately 35 financial institutions have signed up to use the service, with an additional 16 service providers supporting payment processing for these institutions. This inclusivity allows smaller financial institutions to offer the same level of service as larger institutions and fintech companies.

Benefits for Individuals and Businesses

FedNow’s immediate payment capabilities offer numerous benefits for individuals and businesses alike. Contract employees can now receive immediate payments through alternative means, reducing their reliance on cash or payday loans. Additionally, smaller financial institutions can compete with larger institutions and fintech companies by providing faster payment options to their customers.

Future Features of FedNow

FedNow has exciting features in the pipeline that will further enhance its capabilities. Bank and credit union customers will soon be able to send instant payments quickly and securely through their financial institution’s mobile app or website. This expansion will provide even greater convenience and accessibility for users, solidifying FedNow’s position as a game-changer in the U.S. payment landscape.

The Potential of FedNow: Lessons from Brazil

The success of Pix, Brazil’s instant payment system, serves as a testament to the potential impact of FedNow in the U.S. According to Matera, a payments company, Pix transactions in Brazil for Q1 2023 surpassed both credit card and debit card transactions combined. This data highlights the transformative power of instant payments and suggests that FedNow could reshape the U.S. payment ecosystem.

Industry Reactions

While FedNow’s launch is met with enthusiasm, some industry experts believe that widespread adoption may take time. Thejo Kote, CEO of Airbase, emphasizes that both sending and receiving banks need to support the new protocols and payment rails, which can be a slow process. However, organizations like Nacha, which governs the ACH network in the U.S., believe that instant payment systems like FedNow and ACH will coexist to meet evolving market needs.

Controversy and Certification

The launch of FedNow has not been without controversy. Caitlin Long, CEO of Custodia Bank, raised concerns about the inclusion of Adyen, a European fintech company, in the list of participants offering FedNow services. Adyen clarified that it obtained a U.S. banking branch license and completed testing to utilize FedNow. The Financial Technology Association (FTA) welcomed FedNow, highlighting its potential to benefit consumers, businesses, and the overall economy.

Enthusiasm from Fintech Leaders

Fintech leaders express optimism about the opportunities presented by FedNow. Stephany Kirkpatrick, CEO of Orum, believes that FedNow can bridge payment rails and foster innovation across different systems. Dimitri Dadiomov, CEO of Modern Treasury, applauds the launch, emphasizing the positive impact on businesses and consumers, including faster transactions and increased confidence in the payment ecosystem.

The Consumer Perspective

While the launch of FedNow signals a shift towards digital payments, it is important to note that a significant portion of the American population still prefers paper payments. However, with the government’s endorsement of digital payments through FedNow, consumer attitudes may gradually change, leading to increased adoption of instant payment systems.


The introduction of FedNow Service marks a significant milestone in the U.S. payment landscape. With its immediate payment capabilities and plans for future enhancements, FedNow has the potential to revolutionize the way individuals and businesses transfer money. While challenges and controversies may arise, the overall industry reaction and enthusiasm from fintech leaders indicate a promising future for instant payments in the United States.