US Federal Reserve Building in Washington, DC

Vin McNamee | reuters

The Federal Reserve on Thursday launched its FedNow instant-payment service, which will allow a faster flow of cash for businesses and individuals, officials say, after several years of development.

Whether it is providing instant access to pay cheques, allowing last minute bill payments or sending government payments to individuals, The system is expected to improve the flow of funds Through the American economy.

“The Federal Reserve built the FedNow service to help make everyday payments faster and more convenient for years to come,” said the Fed Chair. Jerome Powell Said. “Over time, as more banks choose to use this new tool, the benefits to individuals and businesses include enabling an individual to receive a pay check immediately, or a company to receive funds immediately when an invoice is paid.” This would include enabling access to

So far, including 35 early adopters JPMorgan Chase And Wells FargoTwo of the four largest banks in America, have signed up,

There are an additional 16 institutions providing services for banks and credit unions.

The American Bankers Association said it welcomes FedNow’s developments, noting that the central bank joins the Clearing House, which put its payments service online in 2017, as two major providers in the region.

“We will continue to educate our members about the two systems and the benefits they bring to consumers and businesses,” said Rob Nichols, ABA President and CEO.

There are still some outstanding questions about FedNow, such as whether banks will charge for the service.

The central bank expects that as the system develops further, it will be integrated into the apps and websites of banks and credit unions.

As FedNow goes online, Fed officials study its implementation a central bank digital currencySome say they think FedNow could obviate the need for a CBDC.

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