The Federal Reserve's FedNow real-time payments systems will launch between May and July 2023, Fed vice chair Lael Brainard said Monday.
The Fed has previously given vague timelines for the launch of the service, which will mark the Fed's first new payment rails in decades and allow bill payments, paychecks and other money transfers to move instantaneously.
"The FedNow Service will transform the way everyday payments are made throughout the economy, bringing substantial gains to households and businesses through the ability to send instant payments at any time on any day," Brainard said at a workshop for early FedNow adopters.
FedNow will be competing with the RTP network launched by large banks, as well as services such as Venmo and Cash App.
There are more than 120 organizations already testing the service through a pilot program, including U.S. Bank, Exchange Bank and payment processors such as Alacriti, according to the Fed.
Even after its launch, Brainard said wider buy-in will be necessary to make real-time payments more common in the U.S.
"The shift to real-time payment infrastructure requires a focused effort, but the shift is inevitable," she said. "The time is now for all key stakeholders — financial institutions, core service providers, software companies and application developers — to devote the resources necessary to support instant payments."
Despite the size of the U.S. economy and its well-developed financial sector, the country has been behind others in the move to real-time payments. India's UPI, Australia's New Payments Platform and Brazil's Pix are among the real-time payments systems that have launched in recent years, lowering costs and speeding up transactions for a broad range of consumers and businesses in those countries.
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