FedNow Progresses Despite Hesitation from Some Big Banks
In the latest update from the Federal Reserve on FedNow, it was revealed that the instant payments network has seen significant growth, with 400 banks now actively participating as either senders or receivers, as stated in Fintech Nexus News. Since its launch in July with just 35 institutions, FedNow has steadily expanded its reach, marking an impressive achievement in the world of fintech.
The last public statement by FedNow’s chief, Mark Gould, was made during the American Fintech Council’s Policy Summit in November, when the platform had already onboarded 200 banks. This indicates a remarkable rate of adoption and acceptance within the banking industry.
However, notable absences among participants are some of the country’s largest banks, including Bank of America, Citi, Capital One, and PNC, who have chosen not to join FedNow at this time. Despite their current reluctance, these banking giants have hinted that they may eventually become part of the FedNow network.
It’s worth noting that most major banks are already members of The Clearing House’s RTP network, allowing them to process real-time payments through an alternative channel. Additionally, the card networks, Visa Direct and Mastercard Send, offer their own real-time payment solutions with nearly universal coverage, both domestically and internationally.
FedNow, being a government-backed initiative, can afford a deliberate and gradual rollout strategy. The Federal Reserve is clearly playing the long game, foreseeing that a substantial portion of payments will inevitably shift to real-time processing in the future.
As the landscape of payments evolves, FedNow is poised to become a significant player in the field. Its continued growth and the eventual participation of even the largest banks will likely solidify its position as a central hub for real-time transactions. This development highlights the ongoing transformation of the fintech industry and the role of government-backed initiatives in shaping its future.