FedNow

COUNTERPARTIES

Payer Payee Bank A Bank B

FEDNOW FLOW

  1. A payer authorizes his bank to send a payment of a specified amount from his account. The payer provides the recipient’s bank and identifying information.

  2. The payer’s bank confirms the payer has funds available.

  3. The payer’s bank sends a notification via FedNow to the recipient’s bank. At this point the payer can no longer change the transaction.

  4. The receiving bank receives the payment message, reviews transaction details and validates the recipient’s account.

  5. The receiving bank sends an “accept response” to FedNow. The Federal Reserve moves funds from the paying bank’s master account to the receiving bank’s master account and notifies the paying bank. The receiving bank deposits funds into the receiver’s account.

  6. Payer and receiver are notified by their banks that the funds have been sent.

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