Fed announces FedNow Pilot Program
The US Federal Reserve has announced the creation of the FedNow Pilot Program which would support the development, testing and adoption of the FedNow Service. With this program, the Fed is accelerating efforts to develop the new real-time payment service.
The FedNow Service is an instant payment service that the Federal Reserve Banks are developing to enable financial institutions across the U.S. to have instant payment services in real-time. According to the Federal Reserve website, the launch date of this service remains 2023 or 2024. The FedNow service will compete with a similar private sector service launched by The Clearing house called RTP Network back in 2017.
Over the coming weeks, the Federal Reserve will accept expressions of interest in the pilot program from eligible members of the FedNow Community, which includes financial institutions and payment processors who partner with financial institutions.
In this pilot program, there would be three phases: advisory, testing and closed-loop production. Under these phases and the subsequent launch of the FedNow Service, the Federal Reserve will call upon the entire group or subgroups of pilot participants.
The organizations which aren’t part of the FedNow Community should first enrol by submitting the FedNow Community participant profile form, after which the enrolled participants will get further information on the pilot program.
The last date to participate in this program is 16 November, until which time interested organisations need to submit the expression of interest form. Organisations which are not selected will have an opportunity to submit their inputs via their participation in FedNow Community roundtables, working groups and surveys.