FedNow

FedNow is an interbank clearing and settlement service operated by the Federal Reserve. Participating financial institutions connect to the FedNow network and can send and receive credit transfers on behalf of their customers at any time, including nights, weekends, and federal holidays, with settlement completing in seconds.

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A FedNow credit transfer works as follows: the sending institution submits an ISO 20022 credit transfer message to the FedNow network; FedNow debits the sending institution's Federal Reserve account and credits the receiving institution's Federal Reserve account simultaneously; the receiving institution credits the end user's account. The entire cycle, from submission to funds available in the recipient's account, takes under 10 seconds in standard implementations.

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FedNow also supports Request for Payment (RfP) messages, which allow a payee to send a structured payment request to a payer through the network. The payer receives the RfP in their banking app and can approve, partially pay, or decline. Approved requests trigger an instant credit transfer from payer to payee.

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As of November 2025, the Federal Reserve raised the FedNow network transaction limit to $10 million per transaction, though individual financial institutions may set lower limits for their customers. Unlike ACH, FedNow transactions are irrevocable once settled, there is no return window analogous to ACH reversal rights.

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As of 2025, FedNow has more than 1,000 participating financial institutions. Adoption has grown but remains below its potential; the absence of a mandatory participation requirement (unlike in Europe's regulatory model) means banks face limited competitive pressure to connect.

FedNow addresses a longstanding gap in US payment infrastructure: the absence of publicly operated real-time payment rails available to all financial institutions. Before FedNow, the only real-time option was the RTP network operated by The Clearing House, which has private ownership dominated by large banks. FedNow provides a Federal Reserve alternative with broad access across the financial system, including community banks and credit unions.

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For businesses, FedNow enables payroll disbursement on demand, same-day supplier payments, instant insurance claim payouts, and real-time disbursement of government benefits. These use cases require both speed and irrevocability, neither ACH same-day nor wire transfers provide the combination of sub-10-second settlement and broad financial institution coverage that FedNow offers.

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For the broader US payment ecosystem, FedNow is the infrastructure layer that makes Pay by Bank and account-to-account e-commerce payments viable at scale. Without instant settlement infrastructure, A2A payments at checkout require merchants to wait for ACH settlement, undermining the value proposition. FedNow eliminates that delay.