Banks Reluctant to Adopt Fed's Instant Payment System, Risking Its Success
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Fed's new instant payments system FedNow can provide faster access to money and reduce fees, but banks aren't signing up or are charging high fees.
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Requiring banks to offer instant payments and preventing excessive fees is needed for FedNow's success. It has potential benefits like faster payroll and payments.
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Bank participation is lacking despite Fed efforts; banks profit from current slow system and workarounds like overdraft fees.
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Past payment innovations show voluntary bank participation and affordable customer pricing are both essential for success.
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Fed must do more than build FedNow and wait; without addressing high bank fees, usage will stay low like with Same Day ACH.