22 Aug Get paid almost instantly with FedNow
The FedNow Service (an instant payment infrastructure developed by the Federal Reserve) went live on July 20, 2023. It allows US financial institutions to provide safe and quick (think “seconds”) payment services.
If (and only if) your financial institution participates in the FedNow Service, you can send and receive instant payments IN REAL TIME, 24/7, every day of the year! Even on bank holidays and weekends. Recipients will have FULL ACCESS to funds immediately! This is a game changer for small businesses who struggle with cash-flow issues. ACH transactions settle just once at the end of each business day. Wire transfers settle faster, but charge user fees. The small business who gets paid via FedNow doesn’t have to wait for that money. They can use it right away to pay their own bills. As we small business owners know: Time is money!
This is huge, so let me repeat that: Money can be transferred from one business (or individual) account to another, giving the recipient confirmed, usable cash in their account in seconds. No more waiting for funds to clear.
Be warned, if you are the SENDER: once you send the money, you can’t stop payment.
To enroll in FedNow, you need to contact your bank or credit union and ask if they offer the services. You can find a complete list of financial institutions using FedNow at FedNow ServiceParticipants and Service Providers (frbservices.org)
There is a $25/month FedNow Service participation fee for each routing number that enrolls to receive credit transfers in the service. There is also a 4.5 cent charge per credit transfer and a one cent charge for a RFP (request for payment) message, to be paid by the requester. Check with your financial institution to see if there are additional fees for the service.
Read more about the FedNow Service at FedNow Service (frbservices.org)
