Overview of FedNow
An introductory guide explaining FedNow, how it functions, and key concepts for operating a FedNow integration.
FedNow is a USD only instant payment service operated by the Federal Reserve. Like Real-Time Payments, FedNow is a real-time gross settlement network: it settles individual credit transfers at the Federal Reserve in seconds rather than in batches, at any hour and on any day of the year.
How FedNow works
A FedNow transfer moves through a few stages, from the originating bank, through FedNow, to the receiving bank.
Initiation: A sender creates a FedNow transfer, which includes mandatory details like the recipient's account number, routing number, amount, and remittance information.
Submission: The originating bank verifies the transfer details, ensuring the sender has sufficient funds to cover the transfer, then submits it to FedNow. Unlike ACH, transfers are not batched and are submitted one at a time.
Verification: FedNow verifies that the transfer details are correct and forwards the message to the receiving bank. If it cannot complete the transfer, the transfer is rejected and the originating bank is notified.
Acknowledgement: The receiving bank confirms it has received the message and accepts the transfer. It has only a few seconds to respond and can also reject the transfer for a variety of reasons.
Settlement: Following acknowledgement, the Federal Reserve immediately moves funds between the originating and receiving banks' accounts.
Confirmation: Both the sender and the receiver are notified about the transfer immediately. The entire process happens within seconds.
Rejections, not reversals
FedNow transfers are credit-push only; there is no way to pull funds. A transfer can fail, often because the recipient's account number is invalid or the account is closed. Once a transfer settles, Increase cannot reverse or return it.
Request for Payment
The FedNow network supports a Request for Payment message, where a payee requests funds and the payer authorizes a credit push in response. Increase does not currently support Request for Payment over FedNow. If you need this flow today, contact support to enable Request for Payment over Real-Time Payments.
Availability
The network is always available, except for scheduled maintenance. Receiving banks confirm transfers in real time.
Support
FedNow reaches participating banks and credit unions, and participation is growing. Because coverage is not as broad as ACH, not every institution is reachable. Sending FedNow transfers covers how to check reachability with the Routing Number endpoint and fall back to ACH or a wire.
Message format
FedNow uses the ISO 20022 messaging format, the same format used by Real-Time Payments.
Limits
FedNow transfers are subject to limits set by the Federal Reserve. As of November 2025, the per-transaction network limit is $10,000,000, with a default per-transfer limit of $100,000 that institutions can raise.
FedNow and Real-Time Payments
FedNow and Real-Time Payments are separate instant payment rails,
and they are not interoperable.
Increase models them as two object families:
fednow_transfers for FedNow
and real_time_payments_transfers for The Clearing House's Real-Time Payments network.
You choose the rail for each transfer based on which network the recipient's bank supports.
The two rails behave alike in most respects. Both are credit-push only, irrevocable once settled, available 24/7/365, built on ISO 20022, and capped at $10,000,000 per transfer. They differ in reach and operator. Real-Time Payments launched in 2017, is operated by The Clearing House, and reaches roughly 71% of US depository accounts. FedNow launched in 2023, is operated by the Federal Reserve, and reaches a growing set of participating banks and credit unions.