The FedNow Service is the Federal Reserve’s real-time payment system, letting banks and credit unions move money between accounts in seconds, 24/7/365. It launched July 20, 2023, and now includes more than 1,800 participating financial institutions across all 50 states.
If you’ve been asking “what is FedNow Service” or wondering how does FedNow work, here’s an updated look at the system, how it’s grown since launch, and what it means for consumers and businesses.
What Is the FedNow Service?
Traditional payments between depository institutions — such as check and ACH transfers — typically require “clearing” and “settlement,” a process that can take a day or more. The FedNow Service changes that by providing interbank clearing and settlement that moves funds from a sender’s account to a receiver’s account in near real time, around the clock, every day of the year.
By participating in the FedNow Service, financial institutions can process payments instantly rather than waiting for the next business day.
How Does FedNow Work?
FedNow operates as Federal Reserve instant payments infrastructure sitting between participating banks and credit unions:
- A sender initiates a payment through their bank or credit union’s app or online banking portal.
- The sending institution routes the payment through the FedNow network.
- The Federal Reserve clears and settles the transaction between the two institutions.
- The receiving institution makes funds available to the recipient within seconds — any time of day, any day of the year.
Consumers and businesses don’t connect to FedNow directly; access comes through a participating bank or credit union.
FedNow Growth Since Its 2023 Launch
The FedNow launch date was July 20, 2023, when the network began with 35 participating institutions, including JPMorgan Chase, BNY Mellon, and the U.S. Department of the Treasury’s Bureau of the Fiscal Service. Adoption has grown steadily since:
- FedNow now counts more than 1,800 participating financial institutions, including 7 of the 10 largest U.S. banks.
- Participants range in size from under $500 million to more than $3 trillion in assets, spanning all 50 states.
- In 2025, FedNow settled more than $853.4 billion in payments across 8.4 million transactions. In the first quarter of 2026 alone, the network processed 2.7 million transactions worth $271.3 billion.
- More than 96% of participating institutions are smaller banks and credit unions with under $10 billion in assets, though adoption among small institutions overall still has room to grow — only about one in five of the nation’s roughly 8,500 small depository institutions currently participate.
Florida institutions have been part of that growth, with community banks and credit unions across the state — including in Jacksonville, St. Petersburg, and Inverness — joining the network in recent enrollment cycles.
How Can the FedNow Service Benefit Consumers?
The Federal Reserve designed FedNow to support economic activity by making payments faster and easier. With immediate access to funds, both individuals and businesses gain more financial flexibility — especially for urgent payments. FedNow can also help reduce overdraft and late fees, while giving businesses more efficient cash flow management and more accurate budgeting.
Newer use cases have expanded beyond simple person-to-person transfers to include:
- Federal emergency relief disbursements
- Instant payroll
- Real estate transaction settlements
- Embedded point-of-sale financing
Who Can Use the FedNow Service?
FedNow is available to U.S. depository institutions, including banks and credit unions. Consumers and businesses access the service through their financial institution to send and receive instant payments. Each institution chooses participation options that fit its business needs — some have fully adopted FedNow, others are still evaluating implementation, and some may choose not to participate at all.
For more information, visit explore.fednow.org.
Frequently Asked Questions
What is the FedNow Service?
FedNow is the Federal Reserve’s instant payment system, launched in July 2023, that lets banks and credit unions transfer funds between accounts in near real time, 24 hours a day, every day of the year.
When did FedNow launch?
FedNow officially launched on July 20, 2023, starting with 35 participating financial institutions.
How many banks currently use FedNow?
As of mid-2026, more than 1,800 financial institutions participate in FedNow, including several of the largest U.S. banks and hundreds of community banks and credit unions.
How is FedNow different from Zelle or Venmo?
FedNow is payment infrastructure operated by the Federal Reserve that banks and credit unions use behind the scenes to move money instantly; Zelle and Venmo are consumer-facing apps that may or may not use FedNow’s rails depending on the institutions involved.
Is FedNow available to individual consumers directly?
No. Consumers and businesses can’t sign up for FedNow directly — they access instant payments through a bank or credit union that participates in the network.
Talk to a Financial Professional
As instant payments become more widely available, it’s worth understanding how your bank or credit union uses tools like FedNow as part of your overall financial and cash-flow planning. Talk to your financial professional today to make sure your accounts and payment tools are working together toward your long-term goals.
