The way in which we process payments here in the U.S. market has undergone significant change over the years. That said, the Automated Clearinghouse (ACH) process itself has remained fairly static, at least up until now. That’s all set to change, with the Federal Reserve’s recent announcement of its FedNow service.
According to the Fed’s official press release announcing the initiative, FedNow will be a means to “modernize the nation's payment system and establish a safe and efficient foundation for the future.” The new payments infrastructure will effectively replace the existing ACH framework. With the new system, banks of any size will have the capability of providing real-time payments. We’ll be able to resolve transactions in seconds, rather than days.