Fed announces details of new interbank service to support instant payments (federalreserve.gov)

Article summary

The Federal Reserve has announced details of a new interbank service, FedNow, to support instant payments. The service aims to provide a resilient and nationwide instant payments infrastructure. The target launch date for the service remains 2023 or 2024. This new system is expected to replace or complement existing payment mechanisms such as wires, checks, and ACH transfers.

Main themes

• instant payments
• FedNow
• payment infrastructure
• national ID
• voting accessibility
• Federal Reserve role
• ACH system limitations
• privacy and security concerns

What commenters say

• The introduction of FedNow may lead to cheaper and faster payment options, potentially replacing existing services like Zelle and Venmo.
• Some commenters believe that a national ID system could help with identity verification for instant payments, while others express concerns about privacy and potential abuses.
• The existing ACH system is seen as outdated and in need of replacement, with some arguing that its batch processing nature is a major limitation.
• Others argue that the main issue with ACH is not its batch nature, but rather the lack of incentive for banks to process transactions quickly.
• The Federal Reserve's role and structure are debated, with some considering it a government agency and others seeing it as a non-governmental entity with strong government influence.
• The discussion touches on the topic of voting accessibility and the potential impact of a national ID system on voter registration and participation.
• Some commenters note that the US already has a de facto national ID system in the form of Social Security numbers, despite their limitations and security concerns.