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  1. Economy and Politics
  2. Federal Reserve

What Is FedNow? The Government’s First Instant Payment Service Just Launched

By: Adam Hardy
Adam Hardy, expert in Personal finance, student loans, credit, job market, low-income finances, and Lead data journalist at Money
Adam Hardy
Lead data journalist | Joined May 2024
Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and many other outlets.
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Editor: Brad Tuttle
Brad Tuttle, expert in Personal finance, shopping, consumer trends, and Senior Editor at Money
Brad Tuttle
Senior Editor | Joined January 2014
Brad Tuttle is a senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals.
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Published: Jul 20, 2023 7 min read
Close-up of a hand holding a smartphone with a FedNow Instant Payments logo, with an extract of a computer in the background
Money; Shutterstock

The nation’s central banking system — the Federal Reserve — has released the government’s first real-time payment service. It's called FedNow.

Through FedNow, money transfers and bill payments will be much faster, almost instantaneous. The service launched Thursday, July 20, with dozens of banks and financial institutions as partners. Many — if not all — financial institutions are expected to get on board with the new instant payment system in the coming months and years.

"The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient," said Fed Chair Jerome Powell in an announcement Thursday. "Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid."

Here’s what to know about the government’s foray into real-time payments.

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What is FedNow?

FedNow is a 24/7/365 instant-payment system run by the Federal Reserve. As opposed to consumer-facing apps like Venmo, PayPal or Zelle, which allow instant peer-to-peer payments, FedNow won’t be an app. It’s more akin to a payment infrastructure that allows banks to move money instantly.