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The payments landscape for community banks is changing rapidly as traditional payments converge with new instant payment systems and emerging cryptocurrencies. It is critical for Community Banks to maintain awareness of developments in the payments space to assess new opportunities, mitigate risks, and ensure that their payment strategy aligns with overall business plans.
Aug. 30, 2022
The Federal Reserve said it plans to roll out its FedNow instant payments service between May and July of next year.
Pilot Program: Announced in a news release and in prepared remarks from Fed Vice Chair Lael Brainard, the agency said the anticipated launch window comes as the FedNow Pilot Program prepares to enter technical testing next month.
Certification: More than 120 organizations are participating in the pilot program, which will allow participants to complete a certification process to ensure operational and messaging readiness and then move into production once the service is launched, the Fed said.
Testing Phase: As the pilot program moves into the testing phase, the Fed will begin to engage non-pilot financial institutions and service providers interested in being early adopters of the service.
Call to Action: “The time is now for all key stakeholders—financial institutions, core service providers, software companies, and application developers—to devote the resources necessary to support instant payments,” Brainard said.
ICBA Resources: ICBA Bancard’s webinar series on planning for the FedNow launch continues Wednesday, Oct. 5, with a session on lessons and best practices from community bankers that have started implementing instant payments.