FedNow Is Live

For those curious, it is really using IBM MQ[1] under the hood and uses a bespoke flavor of the ISO 20022 specification.<p>The FedNow Service itself is the tip of the iceberg in terms of what actually happens from an end-to-end perspective.<p>We&#x27;ve been working to become a Certified Service Provider so feel free to ask me anything. I&#x27;m happy to share anything that is not under NDA.<p>[1] <a href="https:&#x2F;&#x2F;www.ibm.com&#x2F;products&#x2F;mq" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.ibm.com&#x2F;products&#x2F;mq</a>

Is there going to be a universal SDK &#x2F; API we can use with this? This would cut alot of middle companies out of the payments industry (or at least put pressure on lowering fees). That would be a huge win.<p>Wish we could do the same for the credit card companies. Would be great if the Federal Government could intervene in some way to have Visa &#x2F; Mastercard &#x2F; American Express &#x2F; Discover use the same API interface for payments. Would dramatically increase competition for providers.

This is a bit off topic for the post, but relevant for some of the comments here.<p>For those who are commenting about payment systems in India and comparing this to UPI (Unified Payments Interface), this is not like UPI in a few ways.<p>Firstly, this is more closer to a faster version of RTGS (Real Time Gross Settlement) in India, which is operated by the RBI (Reserve Bank of India). Speaking from experience, RTGS in India can take several minutes or even 20 minutes or longer, belying the “real time” in its name (this is true even now). The FedNow system is supposed to be real time (we’ll soon know how well it performs in comparison).<p>Secondly, UPI is a payments system by a consortium called NPCI that’s owned by private, public and foreign banks in India. It is not owned by RBI. FedNow is owned by the Federal Reserve, and not by a bunch of banks.<p>With both RTGS (and the slower batched transfer system called NEFT) in India and FedNow in the US, the interbank settlement is done via the central bank (RBI or Federal Reserve).

The announcement is very unclear. What I as layperson will get from it?<p>Is it an app FedPayPal&#x2F;Fedmo that I will be able to use for sending funds? Is it something that will be used by other apps to have cheaper funds transfer? Because if it is latter then I&#x27;m afraid that entrenched players will just keep doing what they&#x27;re doing, keeping the profits but offloading processing to that system if it will be cheaper.<p>The fees by Paypal&#x2F;Square&#x2F;Stripe even Visa and Mastercard are enormous. Personally, I strongly believe that if one will dig deep enough he will find cartel there that sets prices. And when that will happen, LIBOR scandal is going to be a kindergarten play.

FedNow Payment Flow diagram...<p><a href="https:&#x2F;&#x2F;www.frbservices.org&#x2F;binaries&#x2F;content&#x2F;assets&#x2F;crsocms&#x2F;financial-services&#x2F;fednow&#x2F;fednow-product-sheet.pdf" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.frbservices.org&#x2F;binaries&#x2F;content&#x2F;assets&#x2F;crsocms&#x2F;...</a>

Amazing news. Kinda sad to see that Stripe was not on the list of early adopters but I&#x27;m sure they will implement it soon.<p>In Switzerland we build an awesome eBill system ontop of the equivalent thing to FedNow. Its all run by Six Group which is the biggest Stock Exchange but it is jointly owned by the big banks and government. So they all agreed to add this eBilling system. Its so much superior to having paper come in the mail all the time.<p>So much is possible once you have instantly confirming transactions supported by all banks. Suppliers can assume all possible customers have a bank account that can do this in contrast to the crazy world of sending paper checks by mail.

&gt; Banks and credit unions of all sizes can sign up and use this tool to instantly transfer money for their customers, any time of the day, on any day of the year.<p>Whoa. Is this as awesome as it sounds? Is this akin to government-backed Venmo, or something?

I don&#x27;t understand why FedNow and CBDC are such a big issue in the US. FedNow looks quite attractive from a fees perspective, especially when compared to PayPal and alike. Part of me wonders if the middlemen who stand to lose out might be trying to muddy the waters. It wouldn&#x27;t be the first time.

The press release lists a few big banks like Chase, Wells Fargo, BNY Mellon, US Bank and Fiserv, along with a dog&#x27;s breakfast of random service providers and credit unions.<p>Since free realtime payments presumably would still require both the sender and the receiver to use a participating financial institution, instead of all participants just transacting directly through the Fed, how is this supposed to work if most of the industry isn&#x27;t participating?

Seems, it started with Google advising the Fed.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Unified_Payments_Interface" rel="nofollow noreferrer">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Unified_Payments_Interface</a><p>In December 2019, noting the success of UPI, Google suggested the US Federal Reserve Board to follow UPI as example in developing FedNow,[22] a real-time payment system for United States.[23]

It will be interesting to see how this affects &quot;toxic,&quot; deplatformed, and to some degree debanked (at least from PayPal and CC processors) entities, like the KiwiFarms. While this page is somewhat vague about the private&#x2F;public status of the Fed: <a href="https:&#x2F;&#x2F;www.federalreserve.gov&#x2F;faqs&#x2F;about_14986.htm" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.federalreserve.gov&#x2F;faqs&#x2F;about_14986.htm</a><p>it seems pretty well established that federally chartered corporations, like the USPS and Amtrak (e.g., <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Lebron_v._National_Railroad_Passenger_Corporation" rel="nofollow noreferrer">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Lebron_v._National_Railroad_Pa...</a>), are bound by the first amendment, so theoretically the Fed should be as well.<p>That means the usual &quot;it&#x27;s a private corporation!&quot; defense of corporate censorship is probably off the table.

It is crazy how much credit card companies get paid just for making sure that money goes from A to B.<p>Yes, they also offer fraud protection and chargeback, but in 90% of purchases, I don&#x27;t need those. I have other means of establishing trust and recourse, and I just want to send money, instantly.<p>Paying $200 on the internet should cost $0.01, not $10.00.<p>I think there is tremendous opportunity in unbundling payment and fraud protection.

Question: Can this be used by a consumer to more conveniently and securely, and without 3rd party fees, sell things online or in-person?<p>Example 1: Sell a graphics to someone on &#x2F;r&#x2F;hardwareswap. Currently using PayPal.<p>Example 2: Sell car in-person. Currently go to bank and have buyer hand over cash to deposit in bank.

How can a consumer actually try this to send money? This says Wells Fargo is live now but after logging into Wells Fargo I don&#x27;t see any obvious new feature.

Check out <a href="https:&#x2F;&#x2F;explore.fednow.org&#x2F;" rel="nofollow noreferrer">https:&#x2F;&#x2F;explore.fednow.org&#x2F;</a> for more information and an interesting use of Google Maps :)

&gt; “The FedNow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.”<p>What people are accusing them of is taking steps toward creating a digital dollar. This is their response, which is pretty mealy-mouthed if it&#x27;s meant to address those accusations. A better way to express a denial would be &quot;the Federal Reserve has no intention of creating a digital dollar and is not planning for nor working on that project,&quot; if indeed that is true.<p>Because if they DO create one in the near future, then this product SHOULD be designed as a step toward that. If they create a digital dollar and it uses any version of FedNow, then they&#x27;re liars. If they create a digital dollar and it uses an entirely different product, they&#x27;re incompetent.

Founder of a developer bank, Column N.A. here. If people are interested in starting to build on FedNow hit us up. column.com&#x2F;fednow and my email is william at column dot com .

So, is the cost of moving money at the retail level zero to almost negative at this point? I mean, literally, we as a society have invested tax dollars to reduce money movement to something that&#x27;s damn near minimum entropy.

We&#x27;ve had something similar (OSKO&#x2F;PayID) in Australia for a couple of years now. In our case it wasn&#x27;t the government, but the private banks getting together to launch it themselves.<p>Unfortunately its a big target for scammers. Once the cash is instantly transferred, there is little to no chance of getting it back. There are no chargebacks like with credit cards and the instant nature of it means payments can&#x27;t be reversed like the old bank transfers.<p>So its good for sending money to friends, family and trusted people, but not so great for buying anything online as your protections are basically zero.

I hope it&#x27;s a success - but I am doubtful in the US payment landscape, as absurd incentives persisted so long: - C2B payments (everything from cable to insurance) is dominated by credit card payments, as consumers chase rebates&#x2F;miles&#x2F;cash back [paid for by the people who don&#x27;t pay their card in full every months] - C2C payments, because it was virtually impossible for an average person to pay another bank account to bank account, a whole shadow banking system like Venmo, PayPal, Zelle, CashApp was created. - B2B could always pay via ACH, doing it in real time for vendor payments has no advantage - B2C payments, maybe - when you insurance company settle a claim same day (just kidding...).<p>So I hope that the US gets to a place where it is secure and convenient to pay others bank accounts with the balance in your bank account - but I doubt it.

Sharing a comment I posted from an earlier submission: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=36801977">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=36801977</a><p>------------------------------------------------------------<p>The Federal Reserve announces that its new system for instant payments, the FedNow® Service, is now live. FedNow® FAQ:<p>&gt;&gt; <a href="https:&#x2F;&#x2F;www.federalreserve.gov&#x2F;paymentsystems&#x2F;fednow_faq.htm" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.federalreserve.gov&#x2F;paymentsystems&#x2F;fednow_faq.htm</a><p>------------------------------------------------------------<p>FedNow® Service Provider Showcase (Incl: Service Providers with APIs)<p>Browse service providers that can help you connect, innovate, and deliver instant payment products using the FedNow Service.<p>&gt;&gt; <a href="https:&#x2F;&#x2F;explore.fednow.org&#x2F;explore-the-city?id=10&amp;building=showcase-theater" rel="nofollow noreferrer">https:&#x2F;&#x2F;explore.fednow.org&#x2F;explore-the-city?id=10&amp;building=s...</a><p>------------------------------------------------------------<p>Participating financial institutions that are currently live on the service:<p>&gt;&gt; <a href="https:&#x2F;&#x2F;www.frbservices.org&#x2F;financial-services&#x2F;fednow&#x2F;organizations" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.frbservices.org&#x2F;financial-services&#x2F;fednow&#x2F;organi...</a><p>------------------------------------------------------------<p>Launch Video: <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=wHLnV9wu-5A">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=wHLnV9wu-5A</a><p>Other Official FedNow® Videos: <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;@FRBServices&#x2F;videos">https:&#x2F;&#x2F;www.youtube.com&#x2F;@FRBServices&#x2F;videos</a>

Here in NZ you can do this with your bank. Just enter the person’s acct number and the amount to send in online banking.

So when can businesses start utilizing this to replace ACH? I run a b2b company and right now ACH is our most popular payment option, but the settlement time is a pain.

Welcome to 2002 I guess? I’m surprised you couldn’t already do this.<p>What happens when you get paid? It comes several days later?

I know that these are famous last words on Hacker News, so I post them very hesitantly...but presumably this is bad news for Plaid, right?

Funny thing about topics like this is that people of any given country is oblivious to how other countries have solved that problem, or the challenges other countries face, or inturn the problems that they themselves face.<p>Regarding payment systems specifically, people generally don&#x27;t realize what they&#x27;re missing.<p>Pick anybody from anywhere and they&#x27;ll tell you they&#x27;ve been able to do everything they ever wanted to do (with regards to payments) using the already-existing systems of their country.

Fantastic, although not a peep from my bank.<p>Articles seem to imply that it can work in complement to zelle, so that may extend it’s reach quite a bit, no?

I haven&#x27;t learned all the details of the service yet, but I hope this helps eliminate the ridiculous check-based &#x2F; Zelle fraud that seems to be growing (or at least, seems to be highlighted in news and discussion as growing).<p>The very fact that we have money that can appear to be yours initially, but then removed from your account if a check is reversed or disputed is costing people in time and $, and benefitting fraudsters. (advance fee fraud, Zelle &quot;mistakes&quot;, and similar). 3 day clearing times that give people an opportunity to be scammed.<p>Although, irreversible + instant payments may open some new types of problems for people, I could totally see that. But people will need to learn how to deal with this more rational system. Other countries are decades ahead of us in that you are the one who has to initiate payments from your account, and only you can do that, and payments are instant and settled.

In India, there’s something similar to FedNow called UPI — “Unified Payments Interface” that really disrupted the market completely about 7 years ago — it is interoperable, works instantly and has no charges. It was phenomenal how that grew and got adopted, keen to see how FedNow changes the American payments systems.

<a href="https:&#x2F;&#x2F;archive.ph&#x2F;FsEaf" rel="nofollow noreferrer">https:&#x2F;&#x2F;archive.ph&#x2F;FsEaf</a>

If the IRS was used against political opponents, this will be too.<p>I think this is a case where setting a standard and requiring payment processors to adhere would have been a much better idea. More centralizing of power is not what we need right now.

Who built this? Dev was obviously contracted out.

How does this system impact the normal person? Like who is the customer for this? Can I uninstall Venmo and Paypal? Or is this something banks would use under the hood and consumers would never interact with?<p>e: ah I see the diagram now. more helpful.

Powell has mentioned[0] that the Fed is unable to affect fiscal policy, which is the fastest and best solution to certain economic crises. Does this bring the Fed closer to being able to simply give people money?<p>[0] <a href="https:&#x2F;&#x2F;rollcall.com&#x2F;2020&#x2F;06&#x2F;16&#x2F;feds-powell-urges-congress-to-spend-on-unemployed-in-pandemic&#x2F;" rel="nofollow noreferrer">https:&#x2F;&#x2F;rollcall.com&#x2F;2020&#x2F;06&#x2F;16&#x2F;feds-powell-urges-congress-t...</a>

Well done America. This has been available for literally decades in Australia. I was doing bank transfers over the phone from a landline in the 90s before mobile phones were common and the internet was all dialup. I don&#x27;t think I&#x27;ve been paid by cheque (check) since the 80&#x27;s.<p>When I started dating my wife, she called me an old man for even owning a cheque book. That was in 2006.

Is this equivalent to Interact eTransfer in Canada?

Is there a way to restrict my bank to only allow incoming deposits to use this for my account? I&#x27;m scared of VULNs in a new system being abused to withdraw money quickly. Yes, I know the bank is on the hook for making me whole, but recovering from a financial issue like that is more annoying and time consuming than just avoiding it and being a late adopter.

Here we go. CBDCs are next, and also national Digital IDs. <a href="https:&#x2F;&#x2F;m.youtube.com&#x2F;watch?v=uwRSzNTp2ko">https:&#x2F;&#x2F;m.youtube.com&#x2F;watch?v=uwRSzNTp2ko</a><p>Real ID + needing it to browse anything on the Internet: <a href="https:&#x2F;&#x2F;community.qbix.com&#x2F;t&#x2F;the-coming-war-on-end-to-end-encryption&#x2F;214" rel="nofollow noreferrer">https:&#x2F;&#x2F;community.qbix.com&#x2F;t&#x2F;the-coming-war-on-end-to-end-en...</a><p>From what I see people on HN writing, by and large they downplay the risks of these as well as AI. Or alternately seem to suggest that CBDCs and national IDs are not coming, and that it’s a conspiracy theory. However, the “enshittification of Big Tech platforms” is already a fact, so they simply complain about it, but anytime solutions involving open source, decentralization, and utility tokens are introduced, they are violently voted down. So — since no solutions are welcomed, I guess many denizens of HN support hurtling toward extreme centralized control. After all, we’ll be able to <i>complain</i> about it once it’s in place, and that’s enough!<p>Edit: literally <i>5 seconds</i> after I posted it, I received downvotes. Not fast enough for a human to read the message let alone explore the links. I wonder if it’s even automated by keyword now.

Here are the current participants (honestly I thought the list would be a lot longer): <a href="https:&#x2F;&#x2F;www.frbservices.org&#x2F;financial-services&#x2F;fednow&#x2F;organizations" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.frbservices.org&#x2F;financial-services&#x2F;fednow&#x2F;organi...</a>

Do they have a simpler use id like india&#x27;s upi?(userHandle@bankHandle)<p>In the demos I watched, There is account number and routing number

Another nail in the crypto&#x27;s coffin.

Can I transfer money now to entities that are not Visa&#x2F;Mastercard-linked? e.g. weed stores?

&gt; Banks and credit unions of all sizes can sign up and use this tool to instantly transfer money for their customers, any time of the day, on any day of the year.<p>Come on... Being capable of sending money to someone easily should not be based on the bank.

This sounds like India&#x27;s UPI[1]<p>[1] <a href="https:&#x2F;&#x2F;www.npci.org.in&#x2F;what-we-do&#x2F;upi&#x2F;product-overview" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.npci.org.in&#x2F;what-we-do&#x2F;upi&#x2F;product-overview</a>

I am genuinely curious, how is this news? I can do real time bank transfers since... I dunno...<p>I never touched a check in my life and I get my employers payment mostly even before the end of the month?

Most of the comments below are about the tech. Is no one concerned about the privacy concerns that the government now has easy access to all payments made through this?

For those in the know, will this break the stranglehold Visa and Mastercard have over the entire payments industry and help prevent people from being un-personed on a whim?

As a non-US person, just to confirm I&#x27;m understanding the implications of this, have near instant bank transactions not being a thing in the US until now?

Are there amount caps?

This and IRS Tax filling all happening today. From an outsider perspective the only two major thing left for US to fix is Medical Cost and Public Transport.

Title could include &quot;instant payments system&quot;

I cant help but feeling like this is a huge mistake.

The best service the Fed could supply for the average American citizen is a federal checking account paying interest at the listed Fed rate.

Does this eliminate the late night flights of Mitsubishi MU2 turboprop cargo planes delivering canceled checks for the Federal Reserve?

V &#x2F; MC &#x2F; AXP &#x2F; DFS should be scared.<p>So easy to undercut the vast network of middlemen involved with using credit cards and debit cards.

Just in time before they layoff 5% of the staff.

I&#x27;m glad the US is finally catching up the rest of the world...India already has the Unified Payments Interface (UPI) [0]. Additionally, I think fears of this turning into a CBDC are overblown. Banks already have to settle transactions between banks through reserve transfers via the Fed...this will just help automate that process so we can send money from bank account to bank account. Like a Zelle or Venmo, but government backed!<p>[0] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Unified_Payments_Interface" rel="nofollow noreferrer">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Unified_Payments_Interface</a>

India has got pretty good payments system. UPI is miles ahead. Any reason why FedNow can&#x27;t learn from India and adopt UPI?

Why would banks adopt FedNow when it will ultimately eat into their revenue from card interchange?

Genuine question - is this the US&#x27;s version of UPI (United Payments Interface) in India?

When can citizens cut out the upcharging bank middlemen so that we can get out of debt faster?

How much will it cost to do FedNow transfers? Does it depend on the amount or is it fixed fee?

Is this something that one (a business) can now (or soon-ish) use to send or receive payments?

It sounds like something they will use to send food stamp payments so you can be Fed Now.

Will banks be able to charge fees to their customers for using FedNow like wire transfers?

I am very worried when the government knows&#x2F;governs money transfers; look at china.

Right on Feds! This I assume takes away one use-case from crypto-currencies. No?

From the FAQ,<p>&gt; <i>No. There is no FedNow app. The Federal Reserve does not provide payment services directly to consumers and businesses. Banks and credit unions can provide their customers with access to instant payments through new features</i><p>See y&#x27;all in another 25 years, when banks get around to implementing this.

This is really concerning. I wonder why they couldn&#x27;t have looked into what (if anything) prevents the private sector from offering this service, and fixed those obstacles instead?<p>It seems to me like a government run shoe factory, or a government run mail service.

Will services like ACH will be unnecessary eventually then?

Does this paves the way for Central Bank Digital Currency?

Good! It shouldn’t take days to get a deposit or to pay.

So, how do we use it?

So is this gonna kill apps like CashApp and Venmo ?

If this kills Zelle, that would be amazing.

I&#x27;d Just As Soon Kiss a Wookiee!

would this now place the Fed in between transactions where it wasn&#x27;t before?

I think FedNow can serve as the inter-bank settlement rails for CBDC, or the wholesale side of CBDC

Zelle: Fuck

Ribble?!

So e-transfers are dead?

why? don&#x27;t we already have Zelle and Venmo that does just that?

how long until it has a section for tipping ?

My concern is that this is a trial run for an official CBDC that will eventually replace cash.

heard of upi in india? it’s one of the best payment system in the world.

Something something privacy