The Federal Reserve has just entered the testing phase of its new instant payment service, FedNow. Inspired by the Brazilian system, Pix, FedNow aims to revolutionize how North Americans send and receive money, and it places all eyes on the world’s largest economy on the subject of payment innovation.
Banks will have less than a year to prepare for the launch of the long-awaited FedNow. While it’s not yet clear exactly how it works, the Federal Reserve’s vice president, Lael Brainard, said that the success of the system will depend on industry stakeholders—financial institutions, core service providers, software companies and application developers—devoting the appropriate resources to making the system viable for consumers before its launch, which should take place next summer.
These stakeholders must devote effort, time and money into innovation and technology. Through a robust and reliable software development framework, financial institutions should be able to offer a quality service that meets the needs of today’s world, especially in terms of digital processes, automation and digital wallets.
Lessons From The Brazilian System
As stated, Pix is the basic model for FedNow. Launched in 2020, Pix is now operated by more than 770 institutions, according to Bacen (Central Bank of Brazil). Adjustments happened quickly with its implementation, meaning that institutions had to use agile and specialized methods with clearly defined scopes and assertive planning that maximized value.
By Mateus Hernandes Rodrigues via Forbes