Many consumers use online banking to pay bills or send money, but there's often a delay in accessing the funds. A new service from the Federal Reserve aims to fix that issue. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...
The Federal Reserve is launching a real-time payments system, FedNow, which will allow people and companies to make payments in the U.S. banking system around the clock. While apps and payments companies allow people to send money at any time, most transfers still use a system that runs only during business hours. Some transactions may take days to settle.
FedNow will make bill payments, paychecks and other common consumer and business transfers available instantly. But it will likely take years for FedNow to take off. The system will launch in late July, but the case of private real-time payments network RTP, which struggled to gain traction with smaller banks and credit unions, shows how slow change can be in the payments industry. The Fed says 57 firms will be ready for FedNow at launch.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
FedNow will compete for retail payments with Visa and Mastercard, the current juggernauts in person-to-business payments. To succeed, the new system will need to win widespread consumer and business adoption. One big advantage it’ll offer is much lower transaction costs. But other features, like ease of use, global acceptance, dispute resolution and enhanced security, are going to be key.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related Content
-
Stock Market Today: Cautious Investors Let Stocks Drift LowerMarkets weigh encouraging trends for earnings and tariffs against concerning signals from U.S. consumers.
-
A Smart Way to Combat Economic RollercoastersSavings With rates on CDs remaining high for now, a CD ladder allows you to maximize your returns with flexibility to your cash when you need it.
-
Travel Trends You Can Expect This SummerThe Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
AI Goes To SchoolThe Kiplinger Letter Artificial intelligence is rapidly heading to K-12 classrooms nationwide. Expect tech companies to cash in on the fast-emerging trend.
-
May Fed Meeting: Updates and CommentaryThe May Fed meeting came and went with little fanfare as Fed Chair Powell & Co. stuck to their data-dependent script toward interest rates amid tariff uncertainty. The May Fed meeting came and went with little fanfare as Fed Chair Powell & Co. stuck to their data-dependent script toward interest rates amid tariff uncertainty.
-
The Economic Impact of the US-China Trade WarThe Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
-
What Is the Buffett Indicator?"It is better to be roughly right than precisely wrong," writes Carveth Read in "Logic: Deductive and Inductive." That's the premise of the Buffett Indicator.
-
What DOGE is Doing NowThe Kiplinger Letter As Musk's DOGE pursues its ambitious agenda, uncertainty and legal challenges are mounting — causing frustration for Trump.
-
A Move Away From Free TradeThe Letter President Trump says long-term gain will be worth short-term pain, but the pain could be significant this year.
-
Trump’s Whirlwind Month of Crypto MovesThe Kiplinger Letter The Trump administration wants to strengthen U.S. leadership in the cryptocurrency industry by providing regulatory clarity.
