Payments
Payments
July 20, 2023
3 min

The Long Awaited FedNow from the Federal Reserve is Here

Alyssa Cuda

Open Banking Expert

FedNow is here! Trustly is excited to see what the future of the payments landscape will look like with the new real-time rail. Over the past few months, Trustly has been a part of FedNow’s Drafting Committee, helping influence the implementation of the service and the collaboration between The Federal Reserve and participating financial institutions.

Trustly’s VP of Banking Partnerships for North America, Eric Foust, is a member of the FedNow drafting committee. In his interview with PYMNTS, Foust spoke about FedNow’s roadmap and, as the first new payment rail since RTP in 2017, its potential to shepherd a “major shift” in the payments landscape.

That “shift,” Foust explained, has to do with FedNow’s unique role in the the payments ecosystem. He stated that “if [a] payment is less than $500,000, and the payment is being sent domestically between banks that can leverage FedNow, the instant payments rail will be the cheaper option.” He also detailed FedNow’s potential to enhance digtial wallet funding.  However, FedNow won’t displace slower payment systems like ACH, that still have a place for certain use cases or transactions. 

Although the impact of FedNow is still yet to be determined, the release represents new competition, payment optionality, and additonal use cases.This is an essential step towards a payments future in the U.S. that includes a range of interoperable choices that benefit merchants and consumers. We plan to continue to work with other payments leaders to help the industry evolve to become fairer, safer, and more efficient. 

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