FedNow Cross-Border Plan Wins Payments Industry Backing
FedNow, launched by the Federal Reserve in July 2023, gives participating U.S. banks and credit unions a 24/7/365 rail for instant domestic payments. Its rules currently limit each transfer to two U.S. banks, leaving international dollar flows dependent on systems such as Fedwire and correspondent banking. Expanding FedNow to settle the U.S. leg of cross-border transactions would add an always-on option for remittance providers and global businesses, potentially cutting delays and costs without giving nonbanks direct access to Federal Reserve accounts.
The Fed proposed amendments to Regulation J on April 8, 2026, allowing participants to route FedNow transfers through intermediaries other than Reserve Banks; comments closed June 9. Stripe, Visa and Wise submitted support alongside payments trade groups. Stripe urged swift finalization and a companion easing of FedNow’s on-behalf-of residency restriction, while Visa said the change would expand competition and routing choice. Wise said its 19 million customers processed more than $243 billion in cross-border transactions in fiscal 2026, with 75% of payments delivered in under 20 seconds.
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The history behind this eventRTP, FedNow Rule Changes Advance Cross-Border Instant Payments
The Clearing House launched RTP in 2017, while the Federal Reserve brought FedNow online on July 20, 2023, giving the United States two round-the-clock rails that clear and settle dollar payments within seconds. Both were built chiefly for domestic transfers and remain separate networks. Opening them to correspondent and indirect-bank models matters because cross-border payments still rely on multiple institutions, compliance checks and liquidity pools, adding cost and delay.
Under rules effective Sept. 30, 2026, RTP will allow Indirect Domestic Send payments, enabling an eligible depository institution, including a qualifying U.S. branch or agency of a foreign bank, to originate a transfer through another RTP participant. The originator’s account must remain in the United States, and RTP’s general per-payment cap is $10 million. Separately, the Fed on April 8 proposed amending Regulation J so FedNow participants could use non-Reserve Bank intermediaries, such as correspondent banks, for a cross-border payment’s international leg. Comments closed June 9; the proposal has not been finalized.
Federal Reserve Proposes FedNow Rule Changes to Support Cross-Border Payments
FedNow, launched by the Federal Reserve Banks on July 20, 2023, is a round-the-clock interbank real-time gross settlement service. Regulation J currently limits each transfer to two U.S. banks, restricting the service to domestic payments. Easing the rules on intermediaries would allow private providers to connect instant settlement in the United States with the international leg handled by correspondent banks, making cross-border payments faster and more flexible.
The Federal Reserve Board unanimously approved the proposal on April 7, 2026, and opened it for public comment on April 8. The proposed changes to Subpart C of Regulation J would allow banks and credit unions to use intermediaries other than Federal Reserve Banks. The comment period closed on June 9. FedNow settled 2,728,510 transactions worth a total of $271.25 billion in the first quarter of 2026, up 10.6% and 7.7% from the previous quarter, respectively.
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