With the idea of renewing and improving its current payment system, the Federal Reserve (FED) will implement a new payment system called FedNow, with which users will be able to make transactions in just seconds.
La United States Federal Reserve (FED) plans to launch a new and innovative payment system, called fednow, which will allow the entity to improve the current payment infrastructure, based on the country's growing needs to optimize its interbank operations.
According to the FED proposal, the FedNow system will be launched between 2023 and 2024, a time that the organization considers prudent to crystallize the project and all the details required for its optimal functioning, since it is a payment system that "will affect all Americans for many years to come.” Therefore, this payment system seeks to allow users to carry out transactions in real time and at all times, and as indicated by the FED, regardless of whether it is day or night or if it is the weekend. The main objective of the entity is to develop a payment and settlement service for the future that guarantees that real-time payments are available to all users and banking entities.
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The FED and the technological evolution of our era
Since its founding, the FED is the body in charge of providing payment and settlement services in the United States, and is the entity in charge of controlling the current banking system in the country. To date, this entity has promoted a safe, reliable and efficient American payment system together with the private sector, but constant technological evolution drives this organization to modernize its current payment system for one with a more secure and stable foundation for the future development.
In this sense, the Federal Reserve considers that a much faster, more efficient and effective payment system, which allows almost instant transactions to be carried out and in a few seconds, could generate multiple economic benefits for both people and businesses, by providing greater flexibility when managing money and making efficient payments.
During speech issued in 2019, Lael Brainard, Governor of the Federal Reserve Board, stated that all entities have the right to have efficient payment processing capacity, which allows users to enjoy interbank operations and transactions in real time.
“Everyone deserves the same ability to make and receive payments immediately and securely, and all banks deserve the same opportunity to offer that service to their community. “FedNow will enable banks of all sizes in every community across the country to provide real-time payments to their customers.”
Thus, this new system will allow users and clients to have immediate access to their funds, and dispose of them according to their needs at a given time. Likewise, for the FED, giving users and banking entities immediate access to their funds will avoid some problems, such as overdrafts or additional charges for late payments. So, through the FedNow system the FED seeks to optimize and at the same time simplify its payment system.
FedNow, an innovative payment and settlement system
Through the new FedNow payment system, the FED seeks to provide a solid foundation for the future development of a modern and innovative payment infrastructure, capable of offering fast and efficient payments securely for all. Likewise, through this system, the FED seeks to guarantee that real-time payments are available to all users, in addition to being accessible to more than 10.000 commercial banks based throughout the country, regardless of their size and location. number of transactions they process.
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