About FedNow

The FedNow Service is a new payment and settlement service provided by the Federal Reserve Board for instant payments in the U.S. It is designed to offer a safe and efficient infrastructure for near real-time payment and settlement, any time of day, any day of the year. Similar to ACH, the FedNow Service moves money between two bank accounts. Unlike ACH, it is an instant payment where the money becomes available to the recipient in seconds. The FedNow Service makes transferring money secure and easy for users, allows businesses more control over their operational expenses, and helps community financial institutions (FIs) meet the experience expectations of their users and members.

Go to the FedNow Service Home for complete information on FedNow.

Narmi is a service provider for the FedNow Service, connecting directly to the Fed and processing the transactions directly. At this time, we support receiving payments that originate with another FI, including the associated staff workflows. These workflows include reviewing payments received, reviewing cases, and taking manual action on cases using Narmi’s FedNow Manager in Narmi Command. To access FedNow Manager, go to Narmi Command, under Transactions > FedNow manager.

We also support the ability to send payments via API for Banking as a Service (BaaS) use cases, with the associated staff workflows to request a return and respond to information requests. To learn about the FedNow Banking as a Service (BaaS) API, go to FedNow BaaS API.

Customer Payment Flow

The following example payment flow is taken from the FedNow Service Customer Readiness Guide. In this flow, the Receiver FI is your institution. These steps are taken by the Service Provider (Narmi) as opposed to your institution itself.

1. The sender (an individual or business) initiates a payment with their FI through an end-user interface outside the FedNow Service. The FedNow Sender FI is responsible for validating the payment according to its internal processes and requirements.

2. The Sender FI submits a payment message (ISO® message pacs.008) to the FedNow Service.

3. The FedNow Service validates the payment message—for example, by verifying that the message meets proper format specifications and complies with applicable controls.

4. The FedNow Service sends the contents of the payment message to the recipient’s FI to seek confirmation that the Receiver FI intends to accept the payment message. At this point, the Receiver FI will determine how to handle the message (accept, reject, or accept without posting). Among other things, the Receiver FI should use this step to ascertain whether it maintains an account for the recipient identified in the contents of the payment message.

5. Confirmation: In this example flow, the Receiver FI sends a positive response of “accept” to the FedNow Service, confirming it intends to accept the payment message.
   Note: Steps 4 and 5 are intended to reduce the number of misdirected payments and resulting exception cases that can occur in high-volume systems.

6. The FedNow Service settles the payment, debiting and crediting the designated master accounts of the Sender FI and Receiver FI (or of their correspondents), respectively. Steps 2-6 complete within a few seconds but take no more than 20 seconds. Watch the Payment Timeout Clock video for a deeper look at the timing of a payment.

7. The FedNow Service sends an advice of credit to the Receiver FI and an acknowledgment to the Sender FI, executing the payment order and notifying each that the Federal Reserve Banks settled the payment message. Correspondents enabled within a FedNow profile may choose to receive a notification of debit/credit entries (ISO message camt.054).

8. Funds availability and notification to the customer: As a term of participation in the FedNow Service, the Federal Reserve Banks require the Receiver FI to make funds available to the recipient immediately after step 7, meaning that the transaction will be posted to the recipient account at this point. The Receiver FI can optionally then send a confirmation of posting to notify the Sender FI that the funds have been made available to the recipient.

For instructions on reviewing FedNow payments in Narmi Command, go to Reviewing FedNow Payments.

For instructions on reviewing FedNow cases in Narmi Command, go to Taking Action on FedNow Cases.

For information on our FedNow reports, go to FedNow Transactions or FedNow Non-Terminal Transactions.

Permissions

Narmi’s Implementations Team works with your institution to set up the FedNow Service in your UAT environment. Before testing begins, you must give your staff permission to use FedNow Manager in Narmi Command.

The following permissions can be added to staff roles:

• Can view instant payments from the FedNow Service – View-only permission to the Payments tab

• Can modify instant payments from the FedNow Service – Edit permission to the Payments tab

• Can view cases from the FedNow Service – View-only permission to the Cases tab

• Can update cases from the FedNow Service – Edit permission to the Cases tab

For instructions on adding permissions to a role, go to Manage Roles.