Banking Giant JPMorgan, and Wells Fargo, Join Federal Reserve's FedNow Payment System By CIOTechOutlook Team

Banking Giant JPMorgan, and Wells Fargo, Join Federal Reserve's "FedNow" Payment System

CIOTechOutlook Team | Friday, 21 July 2023, 06:39 IST

After much anticipation, the Federal Reserve has now officially launched the program it says will update the country's payment infrastructure. With the help of "FedNow," consumers and banks will be able to complete transactions in a matter of seconds, every day of the week. Simply said, this is a direct rival to companies like Stellar Lumens and Ripple, who provide comparable platforms.

For a very long time, the US Federal Reserve has been building its quick payment service. As first said, the service will enable users to send and receive money in seconds, much as in nations like India, the UK, and Europe.

A total of 16 service providers and 35 institutions will be providing the FedNow service for its subscribers. JPMorgan Chase, Wells Fargo, BNY Mellon, and the Bureau of the Fiscal Service of the US Department of the Treasury are just a few of the early adopter financial firms that are taking part in the inaugural launch.

The Fed also stated that it is dedicated to collaborating with the nation's more than 9,000 banks and credit unions in order to expand the reach of this service.

While the rapid payment service is new to users and traditional financial institutions, it has been around for quite some time in the cryptocurrency world. Using distributed ledger technology (DLT), payment processing services like Ripple and Stellar Lumens have supported instant domestic and international payments. They would now have FedNow as a direct rival.

The New York Federal Reserve's (NYFR) Innovation Center is also testing a comparable payment system, so FedNow is not the only one out there. Participating in the same are financial firms like Mastercard and the payment network SWIFT, as well as banks including HSBC, Bank of America, and Citi.