FedNow Reg J Instant Payments

United States

2023

Payments

Overview

The FedNow Reg J Instant Payments framework refers to amendments made by the Federal Reserve to Regulation J to support the FedNow Service, which launched in July 2023. The amendments extend the legal infrastructure of Reg J, originally governing check and wire transfers, to cover real-time payments settled through the FedNow system.

The rule applies to banks, credit unions, payment processors, core banking providers, and financial institutions participating in the FedNow Service. It establishes the terms under which these institutions send and receive instant payments and outlines the responsibilities for settlement and messaging.

Key Obligations

Comply with revised Subpart C of Reg J for FedNow transfers
Adhere to real-time settlement protocols via Federal Reserve master accounts
Ensure participation agreements and technical readiness for 24/7 operations

Follow format and content standards for ISO 20022 messages
Manage fraud risk, identity validation, and transaction verification in real time
Accept liability for unauthorized or misrouted transfers unless mitigated by proof

FAQ

Related Regulations

EFTA Reg E Payment Regulation

NACHA ACH Operating Rules

PCI DSS v4.0 Payment Security

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