The U.S. government’s real-time payments (RTP) service FedNow is slated to launch by mid-2023, with technical testing of the pilot program starting this month.

The Federal Reserve will begin rolling out the service between May and July 2023, the agency announced this week. Following the launch, thousands of financial institutions, regardless of geographical location or size, could soon provide businesses and consumers with instant payments around the clock.

“As the pilot program moves into the testing phase, the Federal Reserve is beginning to engage non-pilot financial institutions and service providers interested in being early adopters of the service,” a release from the Fed stated.

More than 120 organizations have joined the pilot program since the Fed first announced the RTP service in August 2019.

FedNow will rely on IBM’s MQ MQi client for payment message flows and use APIs for integration, Bank Automation News reported last year.

‘Cloud-first design’

The Fed is touting the service’s cloud-first design, which will enable scalability required for high-volume retail transactions and ensure continuous service, Lael Brainard, vice chair of the Federal Reserve, said Monday.

“Cloud-first design affords other key technology components such as self-healing processes and automation, which add to operational resiliency,” Brainard said. “And our development processes are agile, allowing us to deliver new features faster to financial institutions of all sizes as they are ready to adopt them based on their priorities.”

The service has pushed other Fed efforts to take a back seat, including the implementation of global messaging platform ISO 20022, delayed from November 2023 to March 2025, the agency announced June 27.

ISO 20022 will “allow for enhanced efficiency of both domestic and cross-border payments due to greater interoperability among global payment systems, and a richer set of payment data that may help banks and other entities comply with sanctions and anti-money laundering requirements,” according to a release.

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