Fed launches FedNow payment service that could bypass PayPal

In an effort to modernize the nation’s payment infrastructure and make it possible for regular Americans to send and receive money in seconds, the US Fed has introduced a new payment service called FedNow.

With the FedNow service, which has been in development since 2019, the US will catch up to nations like the UK, India, Brazil, and the European Union by eliminating the several-day delay that exists for cash transfers to settle.

A total of 41 banks, including community banks and major lenders like JPMorgan Chase, Bank of New York Mellon, and US Bancorp, are certified to use the service at launch, along with 15 service providers.

The Fed plans to onboard more banks and credit unions this year. Initially opposed by big banks, many have since agreed to participate.