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Fednow Or Fedlater

dep
  |     |   12 posts since 2011

Has anyone experienced noticeable speed-ups for funds transfers between their financial institutions that would now be using the new FedNow functionality? FedNow was reportedly launched in late July-2023, with the goal of same-day transfers, plus the elimination of delays due to weekends and holidays. But I suspect that none of my FIs are yet using this new service to replace the old ACH functionality. E.g. I initiated 2 transfers on Friday. One is scheduled to fully complete on Tuesday, and the other on Wednesday.

Could FIs be hesitant to use this new FedNow service? E.g.:

Technical upgrade costs?

Functionality of the service not yet fully implemented by the Fed?

Fear of bad guy abuse?

Fear of sudden uncontrollable bank runs?

Fear of change?

FedNow would appear to be a valuable and time-efficient service for customers who like their transactions to complete quickly and move off their pending lists. And so it seems like a mystery as to why we might not be seeing it used now by many FIs to help their customers.

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MoneyMoves
  |     |   149 posts since 2019
List of the 400 Participating Financial Institutions
https://www.frbservices.org/financial-services/fednow/organizations

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Jan 18 article QUOTEs
FedNow draws some banks, as others lag --The Federal Reserve is building up bank participation in FedNow, but some big financial institutions remain on the sidelines.

CEOs of two banks, Citi and Bank of America, said during a Senate Banking Committee hearing last month that their banks plan to sign on “in the coming months.”

... the biggest U.S. bank, JPMorgan Chase, was connected to FedNow early on, and Wells Fargo and U.S. Bank have also joined the network

While the start of FedNow is also prompting more adoption at the rival RTP network, which was launched in 2017, the U.S. still lags behind other countries in fostering instant payment systems. Some of those countries, includi
ng India and Brazil, have made progress by mandating use of the real-time systems.

https://www.paymentsdive.com/news/federal-reserve-fednow-bank-adoption-instant-payments-realtime/704908/
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