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
-
Things that Surprise Business Owners When It’s Time to SellThe Kiplinger Letter When it’s time to retire and enjoy the fruits of growing their business, owners are often surprised by how tough it is to give up their baby!
-
Stock Market Today: Powell Rumors Spark Volatile Day for StocksStocks sold off sharply intraday after multiple reports suggested President Trump is considering firing Fed Chair Jerome Powell.
-
What New Tariffs Mean for Car ShoppersThe Kiplinger Letter Car deals are growing scarcer. Meanwhile, tax credits for EVs are on the way out, but tax breaks for car loans are coming.
-
AI’s Rapid Rise Sparks New Cyber ThreatsThe Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
Blue Collar Workers Add AI to Their ToolboxesThe Kiplinger Letter AI can’t fix a leak or install lighting, but more and more tradespeople are adopting artificial intelligence for back-office work and other tasks.
-
Who Will Replace Jerome Powell as Fed Chair?Buzz is building that President Trump could announce Fed Chair Powell's replacement sooner rather than later, even though his term doesn't end until next year.
-
June Fed Meeting: Updates and CommentaryThe June Fed meeting was a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. have to say about interest rates and the economy.
-
America's Surprising Strengths in Manufacturing and ExportsThe Kiplinger Letter Despite common perceptions that the U.S. doesn't build things anymore, American factories are still hard at work. A special report from The Kiplinger Letter.
-
Tax Rule Change Could See Millions Lose Health InsuranceThe Kiplinger Tax Letter If current rules for the health premium tax credit (PTC), a popular Obamacare subsidy, aren't extended, 3.7 million people could lose their health insurance.
-
Travel Trends You Can Expect This SummerThe Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
