PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

FedNow Is Set to Transform the Payments Space

By Connie Diaz De Teran
January 11, 2023
in Analysts Coverage, Commercial Payments, Credit, Debit, Faster Payments
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
faster Payments

FedNow, the highly anticipated instant payment service, is set to launch mid-2023 and deliver significant changes to fintech companies and new players coming into the payments space. A recent article highlights how FedNow, the central bank’s new instant payment infrastructure, will offer retail payments in real-time, 24/7, 365 days a year. Recipients of payments will have immediate access to their funds.  

FedNow’s core objective is facilitating faster access to funds for both merchants and consumers to better manage their cash flow, at a reduced cost, and lower payment risk.  

The launch could pose challenges for fintechs that currently rely on existing payment rails, as well as credit and debit interchange fees. Likewise, non-bank providers that offer peer-to-peer payment services will also be feeling the impact, as FedNow is only available to traditional U.S. banks.  

These participating banks will be extending their instant payment service to businesses. Therefore, e-commerce merchants that hold accounts with participating banks can be the recipients of instant payments. Furthermore, if merchants enable an instant payment option for customers to choose when paying online, this will drive costs down as opposed to using debit or credit card rails. 

As more consumers look for faster, seamless, and convenient payments, businesses too are seeing the benefits as they can more easily manage their cashflow and make last-minute payments to their suppliers. FedNow is set to expand its offerings for all types of transactions.  

“Currently, instant payments are utilized in the U.S. for peer-to-peer (P2P) transaction types and are most frequently facilitated on platforms such as Zelle, Venmo, ApplePay, /GooglePay, or PayPal,” said Sophia Gonzalez, Research Analyst for Debit Advisory Service at Mercator Advisory Group. 

FedNow will enable all transaction types beyond P2P, such as paying a merchant at the point-of -sale, businesses paying businesses, and beyond. FedNow could also replace nearly all current payment solutions, including card payments and direct ACH payments.  

Current regulation is struggling to keep up with instant payments. This article points out how consumer protections on the Zelle platform need improvement. It is imperative for regulators to get ahead of innovation.” 

Although still a work in progress, the upcoming launch of FedNow will be moving things in the right direction. We have written about how FedNow will be addressing the most pressing consumer need for faster, instant payments here. 

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: BankseCommerceFaster PaymentsFedNowInstant PaymentsP2P paymentsPaymentsReal Time PaymentsVenmoZelle

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    amazon return fraud

    Amazon Takes on Returns Fraud

    July 25, 2025
    biometric merchant

    Biometric Payments Pilots Are Picking Up, But U.S. Adoption Is Years Away

    July 24, 2025
    ai credit card

    Smart Cards: How AI Is Changing the Credit Industry

    July 23, 2025
    accounts payable

    A Fragmented Accounts Payable Process Is a Liability in More Ways Than One

    July 22, 2025
    PayDay Lending: Out on the Fringes and Still an Ugly Business, payday lenders, Payday lending rule, national debt, changing relationship with money

    Legislation Requiring Cash Acceptance Faces an Uphill Battle

    July 21, 2025
    supply chain payments

    The Payment Process: The Supply Chain’s Most Overlooked Cyber Risk

    July 17, 2025
    Navigating Global Fintech Regulations Through Strategic Regulatory Arbitrage

    Navigating Global Fintech Regulations Through Strategic Regulatory Arbitrage

    July 16, 2025
    AI Is Turning Accounts Receivable Into a Strategic Powerhouse

    AI Is Turning Accounts Receivable Into a Strategic Powerhouse

    July 15, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result