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
-
Visa Is the Worst Dow Stock Wednesday. Here's WhyVisa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
-
Another Analyst Moves to the Sidelines on Tesla Stock After EarningsTesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
-
Car Prices Are Finally Coming DownThe Kiplinger Letter For the first time in years, it may be possible to snag a good deal on a new car.
-
June CPI Report Comes in Soft: What the Experts Are Saying About InflationCPI Odds rise for a September rate cut after prices fall on a monthly basis for the first time in almost two years.
-
Best Closed-End Funds (CEFs) to Buy NowThe best closed-end funds will significantly boost your portfolio income and allow you to buy their underlying stocks and bonds at a discount.
-
Softer June Jobs Report Raises Rate-Cut BetsJobs Report Slower hiring and a rise in the unemployment rate up the odds of the Fed easing more than once before year-end, experts say.
-
Kiplinger Special: The Long-Term Future of the U.S. EconomyThe Kiplinger Letter Kiplinger's report into what it will take the U.S. to maintain a healthy economic growth rate.
-
Fed Holds Rates Steady, Sees Just One Cut This Year: What the Experts Are SayingFederal Reserve The Federal Reserve kept interest rates unchanged and penciled in one quarter-point cut in 2024.
-
May CPI Report Comes in Soft: What the Experts Are Saying About Inflation
CPI A slowdown in inflation keeps the Fed on track for rate cuts later this year.
-
When Will the Fed Cut Rates? The Experts Weigh InFederal Reserve The timing of the first quarter-point cut to the federal funds rate remains as opaque as ever.
