FedNow Service: Revolutionizing Payments with Real-Time Technology

The U.S. Federal Reserve is set to launch its long-awaited "FedNow" service, aiming to modernize the country's payment system by allowing Americans to send and receive funds in seconds, 24/7. The service will eliminate the current several-day lag in cash transfers, bringing the U.S. in line with other countries. Initially opposed by big banks, many have now agreed to participate, recognizing the opportunity to expand their services. FedNow will settle payments directly in central bank accounts, benefiting consumers and small businesses the most. Smaller banks welcomed the service as it allows them access to real-time payments without relying on larger competitors. FedNow will have a maximum payment limit of $500,000 initially, and concerns about potential bank runs have been downplayed by Fed officials.