Remarks by Vice Chair Brainard on FedNow, August 29, 2022 | Summary and Q&A

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August 29, 2022
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Federal Reserve
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Remarks by Vice Chair Brainard on FedNow, August 29, 2022

TL;DR

The FedNow Service is an innovative core instant payments infrastructure that aims to transform the way everyday payments are made throughout the economy, bringing substantial gains to households and businesses.

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Key Insights

  • 👨‍💼 The FedNow Service aims to bring substantial gains to households and businesses through instant payments and immediate availability of funds.
  • 🤩 A cloud-first design and stakeholder engagement have been key factors in the development of the FedNow platform.
  • 😀 The widespread adoption of instant payments requires commitment and investment from financial institutions, service providers, software companies, and app developers.
  • ❤️‍🩹 The FedNow Service is expected to increase competition in the market for end-user services and promote innovation in the payment system.

Transcript

i'm pleased to join you at the fednow early adopter workshop with the technical testing phase of the fed now service kicking off in mid-september i want to particularly thank you the early adopters for the important investments you're making to prepare for the day when the fed now service goes live together we'll be ready to launch the fed now serv... Read More

Questions & Answers

Q: What is the FedNow Service and when will it launch?

The FedNow Service is an instant payments infrastructure aimed at providing households and businesses with immediate availability of funds. It is set to launch between May and July of 2023.

Q: How will the FedNow Service benefit households and small businesses?

The availability of instant payments will help households avoid late fees and manage their finances in real-time, while small businesses can use it to free up working capital for growth.

Q: What technologies and approaches have been incorporated into the FedNow platform?

The FedNow platform utilizes a cloud-first design, enabling high-volume retail transactions and broad geographic points of resiliency. It also includes self-healing processes and automation for operational resilience.

Q: How has the Federal Reserve engaged with stakeholders to ensure readiness for the FedNow Service?

The Federal Reserve has invested heavily in stakeholder engagement through initiatives like the pilot program, the FedNow Explorer resource, the FedNow community, the service provider showcase, and the FedNow early adopter workshop.

Summary & Key Takeaways

  • The FedNow Service, set to launch between May and July of 2023, will provide instant payments infrastructure to financial institutions of every size across America.

  • Immediate availability of funds through the FedNow Service will help households manage their finances and enable small businesses to finance growth.

  • The Federal Reserve has made significant investments in the FedNow platform, including a cloud-first design and stakeholder engagement to ensure nationwide adoption.

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