Search
 
Analysis

FedNow Instant Payments Will Not Prevent Fraud

In fact, accelerating to real-time settlement will reduce banks’ ability to continue their current fraud-prevention tactics.

By Monica Eaton-Cardone | February 13, 2020 at 12:21 PM

Faster and smoother payment processes may eliminate float for corporate payables teams, but they also provide enormous opportunities to streamline processes and gain much more precise control over cash balances. That’s why most corporate treasurers love the idea of being able to initiate and finalize transactions in seconds, rather than waiting days for them to clear.

Back in August, the U.S. Federal Reserve announced plans to take the first step toward instantaneous payments in the U.S. market. Since then, the Fed has been working to build out a real-time payments settlement system, which will be called the FedNow service. In the announcement, Fed governor Lael Brainard explained this move by saying: “Everyone deserves the same ability to make and receive payments immediately and securely, and every bank deserves the same opportunity to offer that service to its community. FedNow will permit banks of every size, in every community across the country, to provide real-time payments to their customers.”

The Fed describes FedNow as a way to modernize the nation’s payment system. Widespread adoption of FedNow would render obsolete the Automated Clearing House (ACH) framework that currently settles interbank transactions.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

 

Recommended Stories

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.