FedNow Scheduled to Launch In July

The Federal Reserve has a launch date for its long-awaited payments service FedNow.

The U.S. central bank announced Wednesday (March 15) that the service will debut in July, providing all financial institutions with an instant payments tool.

“With the launch drawing near, we urge financial institutions and their industry partners to move full steam ahead with preparations to join the FedNow Service,” Ken Montgomery, the executive in charge of the program, said in a news release.

The Fed also detailed some of the preparations for the launch. In the first week of April, it will begin certifying participants, with early adopters completing a customer testing and certification program, “informed by feedback from the FedNow Pilot Program, to prepare for sending live transactions through the system.”

Once participants are certified, they’ll work with the Fed to “conduct production validation activities” to make sure they’re prepared for the July launch.

The launch of FedNow will be the culmination of a four year effort, a pilot program that involved more than 100 participants and the development and testing of a host of product features and functions, PYMNTS noted in December in a conversation with a trio of payments experts.

These executives — Dan Baum, head of payments product for FedNow; Kevin Alsup, senior vice president technology solutions, Excite Credit Union; and Elspeth Bloodgood, senior advisory technical product manager at Jack Henry — told PYMNTS the service marks the beginning of the reality of truly modern payments in the U.S.

They also said expectations for the program are high among banks, processors and providers that had signed up for FedNow.

Alsup told PYMNTS that Excite Credit Union’s clients “want us to provide them with a secure, convenient, instant way of moving money back and forth … we’ve always believed that the Federal Reserve was the one place that could deliver instant payments, which is why this is very exciting for us and for our members.”

More recently, PYMNTS spoke with Basant Singh, head of merchant payments at ACI Worldwide, about the promise of instant payments. His company had just launched its own Instant Pay product ahead of FedNow’s debut.

“Settlement for the merchant will happen instantly,” he said. “The benefit to the consumer is that there is another option for them, especially to the newer demographics like Gen Z and younger generations. They are very keen to adopt this kind of instant payment. This is the right payment option for them that fits their lifestyle.”