What Bankers Are Saying About FedNow

Early adoption is slow, but many bankers realize participation is inevitable. Separately, we take a look at banks' cost-cutting plans (including layoffs).

Good morning, Bank Slaters!

I’m finally back in a rhythm after spending most of July out of the country, then moving into a new home and making business trips to Springfield, Ill., and Dallas. Thankfully, I get some time at home before returning to the road (Nashville; Kalispell, Mont.; and Oxford, Miss.). But we’ll still be on top of banking news over this time.

Let’s talk about FedNow.

I’ve been spending more time chatting with bankers about instant payments since FedNow’s full launch in July. Participation has nearly doubled, to about 60 financial institutions, in the past two months. We still have a long way to go before this system gets ingrained into mainstream finance.

The initial signup has been “tepid,” Aaron Klein, a senior fellow at the Brookings Institution told attendees at a fintech conference hosted by the Philadelphia Fed, noting that the options for instant payments often come with hefty fees.

While most bankers are reluctant to be early adopters, they largely believe that broader adoption is inevitable as convenience and speed of delivery become increasingly important to individuals and businesses.