The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 01 May 2026 11:32:38 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png FedNow: The Federal Reserve’s Planned Instant Payments Service – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 FedNow: The Federal Reserve’s Planned Instant Payments Service https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/?utm_source=rss&utm_medium=rss&utm_campaign=fednow-the-federal-reserves-planned-instant-payments-service https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/#comments Mon, 31 Aug 2020 13:03:20 +0000 https://corpgov.law.harvard.edu/?p=132331?d=20200831174318EDT Posted by Margaret Tahyar, Jai Massari and Andrew Samuel, Davis Polk & Wardwell LLP, on Monday, August 31, 2020
Editor's Note:

Margaret Tahyar and Jai Massari are partners, and Andrew Samuel is an associate at Davis Polk & Wardwell LLP. This post is based on a Davis Polk memorandum by Ms. Tahyar, Ms. Massari, Mr. Samuel, Luigi De Ghenghi, Randall Guynn, and Daniel Newman

The FedNow Service

The Board of Governors of the Federal Reserve System (the Fed) announced details of its planned FedNow Service on August 6, 2020 in a release describing its core functionality and future implementation.

  • If launched as described in the release, FedNow will be a real-time gross settlement (RTGS) payment system with integrated clearing It will offer 24x7x365 payment processing for every bank in the United States (instant payments).

The initial launch target date is 2023 or 2024. This release may mark the start of the next phase of implementation work by the Fed and eligible participants.

  • The initial launch will provide baseline functionality and help banks manage the transition to a 24x7x365 service. It will include a liquidity management tool (FedNow LMT) so that FedNow participants can transfer funds between accounts at the Reserve Banks to meet the liquidity needs associated with instant payments.

The Fed stated that it will take a phased approach to implementation, including pilot programs, providing additional features and functionality over time.

The FedNow Service will facilitate end-to-end instant payment services for consumers and businesses, increase competition, and ensure equitable access to banks of all sizes nationwide.

The Federal Reserve is uniquely positioned to build an instant payment infrastructure, given our long history of operating payment systems to promote a safe, efficient, and broadly accessible payment infrastructure.”
—Governor Lael Brainard, The Future of RetailPayments in the United States (August 6, 2020)

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