speeds up money transfers

BY JUSTIN MCGOWN jmcgown@westfairinc.com

Two to three business days is a long time. Amazon Prime has given many the expectation that this is how long it should take to ship physical goods, not conduct digital business. The speed of online business and apps like Venmo, Cashapp and Zelle have also likely given many the perception that anything that isn’t physically moved can be sent instantly.

Starting June 1, real-time transfers between financial institutions through the FedNow payment network will bring that same level of speed to the business world. This will be accomplished in part by implementing ISO 20022, the latest International Standards Organization standard for electric data transmission between financial institutions.

FedNow will also enable electronic transfers around the clock and seven days a week, although implementing that will be left to individual institutions.

Speeding up these transactions, which are currently one of the hard limits on the speed of business, is the goal of the FedNow program, which seeks to provide “real-time” cash transfers between financial institutions, businesses and consumers. It could mean that employees get paid seconds after payroll is completed, that businesses no longer need to plan around weekends when transmitting payments and more, all while increasing security.

The Federal Reserve characterizes FedNow as a major improvement to the infrastructure of the American financial system, one of the most significant since