The Federal Reserve’s FedNow service processed 16 million transactions worth $125 billion by mid-November 2023, with 600 institutions now onboarded amid Congressional support and global instant payment growth.
The Federal Reserve’s instant payment infrastructure reaches new adoption milestones as lawmakers push to expand access to community banks.
FedNow Adoption Quadruples in Four Months
The Federal Reserve reported on 14 November 2023 that its FedNow instant payment service has processed 16 million transactions totaling $125 billion since its July launch, marking a 33% volume increase from October figures. Participation grew to 600 financial institutions, including recent additions like First National Bank of Omaha that joined on 13 November.
Legislative Push for Financial Inclusion
Senators introduced bipartisan bill S.3456 on 10 November to allocate $50 million in grants helping community banks integrate with FedNow. ‘This levels the playing field for rural lenders,’ said bill co-sponsor Senator Tina Smith (D-MN) in a statement.
Global Context for Real-Time Payments
The European Central Bank reported 22 million instant euro transactions in Q3 2023, a 40% annual increase. JPMorgan and Bank of America expanded FedNow-enabled payroll services for small businesses on 9 November, mirroring European corporate adoption patterns.
Challenging Legacy Systems
Analysts note FedNow’s growth parallels the Automated Clearing House (ACH) network’s 1970s adoption, but at triple the initial pace. Traditional wire transfers now account for only 12% of U.S. payment value, down from 21% in 2020 according to Fed data.The FedNow surge comes 14 years after the 2009 Faster Payments Task Force first identified U.S. infrastructure gaps. Like the 2010s mobile payment revolution in China driven by Alipay, FedNow’s trajectory suggests structural shifts in financial behavior. However, technical hurdles remain – the ACH network took 15 years to achieve universal bank participation after its 1972 launch.
