In the 2019 submission, the Commission indicated that FedNow would have institutions that, in accordance with current federal laws and Federal Reserve rules, directives and procedures, can hold reserve banks to account.  Seven commentators stated that authorization to participate in FedNow should be extended to other institutions, including non-bank banks that are not eligible for Federal Reserve accounts. These commentators explained that dependence on banks to access the service would lead to increased costs and other inefficiencies. In addition, these commentators pointed out that the participation of companies such as non-bank lenders, fund issuers and fintech would promote competition and the wider introduction of instant payment services. In contrast, about 20 commentators, mainly small and medium-sized banks and commercial organizations, pointed out that participation in FedNow should be limited to federal insurance institutions. Almost all of these commentators found that the direct participation of non-banks in the FedNow service would pose a risk to the service and the broader payment system. 62. Liquidity providers may have an interest in providing liquidity to FedNow members without making standard FedNow Payments. The possibility of such liquidity issuers participating could allow small and medium-sized banks to maintain relationships with their existing liquidity providers for the purposes of managing liquidity for immediate payments. Use the links below to access the forms and agreements you need to set up or use the Federal Reserve`s financial services. FedNow participants have access to intraday credit on the same terms as participating in other Federal Reserve services.
Such an intraday credit would reduce the risk of refusal of payment for lack of credits. The Federal Reserve expects banks to manage their management accounts at any time in accordance with Federal Reserve policy. The Board recognizes the need for additional service charges prior to the introduction of the FedNow Service. Based on dominant market practices, the Commission expects the royalty structure to include a combination of mail fees charged to the sender`s bank and possibly to the recipient`s bank, as well as fixed participation fees. The final royalty structure and final timetable are informed by the Federal Reserve`s assessment of market practices at the time of implementation. Reserve banks will publish the fedNow service`s initial pricing plan well in the run-up to its launch through well-established communication channels.  As of August 2, 2010, the Federal Reserve Banks is offering an opt-in service for certain ACH debit payments via the FedACH service. FedACH customers can sign up for this service by entering into a participation agreement. The service is limited to transactions resulting from consumer cheques converted to ACH and debit transfers initiated by consumers via the internet and telephone. In the face of these significant risks, the Commission found that an operational role would enable the Federal Reserve to advance a number of important objectives, including the development of an accessible national infrastructure, the promotion of stability in times of crisis, support for resilience through layoffs, and the promotion of healthy competition for compensation and settlement of immediate payments.
11. The GAO found that competition from the Federal Reserve has generally had a positive effect on payment markets, with benefits that include lower costs for processing payments for end-users.