FedNow to enable cross-border payments

The Federal Reserve is expanding its FedNow real-time payment system to include cross-border transactions. This move aims to bring the speed of instant domestic payments to international transfers. For retailers and service providers, this is a significant step toward faster settlement times when dealing with international suppliers or customers. Currently, cross-border payments often take days to clear and involve high fees. The Fed is working on interoperability standards to ensure the US system can 'talk' to instant payment networks in other countries. For your business, this means the potential for near-instant liquidity. Instead of waiting for a wire transfer to clear over 48 to 72 hours, funds could hit your account in seconds. This technology also supports the broader consumer financing ecosystem. As lenders adopt these rails, they can fund merchants or settle customer accounts instantly, regardless of where the entities are based. While this is currently in the infrastructure phase, it signals a shift toward a 24/7/365 global economy where 'business days' no longer dictate your cash flow.

Source: Finextra — Lending

← Return to the library· Submit a correction