FedNow Will Incredibly Accelerate Fintech, According To Plaid CEO
According to Plaid CEO Zach Perret, FedNow, the Federal Reserve’s new payments system that was unveiled last week, would support growth for the US fintech industry.
As a new service for banks and credit unions to immediately transfer money at any time, FedNow went live last Thursday. The interbank payment system strives to help American consumers and businesses by facilitating quick access to capital and efficient cash flow management.
According to Perret, FedNow might operate as a “large accelerant” for the fintech sector by accelerating procedures that, up until recently, could take up to three days but are now instantaneous, such as paying employees and transferring money digitally.
Although Perret emphasized that it might take years for FedNow to be widely adopted, US financial firms stand to gain a lot from it. He declared:
“We expect it to increase consumer choice, increase competition, increase optionality for people out there. The big question in my mind is actually how fast banks are going to adopt it.”
Along with the Bureau of Fiscal Service of the US Department of Treasury, 35 banks and credit unions were prepared to use the service when it first launched. FedNow payment processing for banks and credit unions will be supported by 16 service providers.
