TEXAS, USA — Since the announcement of FedNow, a new payment service, a lot of conversation has been buzzing around whether it's good or bad for Americans on social media.
So how does it work?
In two months this will mean that all banks will become an instant payment service provided by the Federal Reserve. If you use your debit card, make a purchase, or send someone money on any platform, the government will have access to see where your dollars are going.
A “faster payment” like FedNow is characterized by three qualities: instant transactions, 24/7/365 availability, and immediate confirmation of the payment for both the sender and the recipient.
The introduction came on the heels of COVID-19 four years ago as several businesses leaned on financial institutions to be the heart of their financial stability.
"Small businesses are obviously the backbone of any community," said VP of Guaranty Bank, Jared Salvato. "The bank is truly your partner, we wanna see you succeed as much just as much as you wanna succeed yourself."
While the FedNow system cautions a need to prepare, community bankers are stressing that they will always be a helping hand.
"That they understand that the bank is truly your a partner and we're here to help you in any way that we can," Salvato said.
On the topic of financial stability, the FedNow announcement has added stress to an already tense financial situation. In fact, a new survey showed that money is negatively impacting 52% of Americans as uncertainty looms over many in a turbulent financial environment.
"It was just a tough time for everybody, I mean everybody was trying to learn how do we work our way through this," said Salvato.
While nothing is certain about where the economy will end up, FedNow aims to streamline how money is processed in a rapidly changing world.
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