FedNow to support cross-border instant payments

The Federal Reserve plans to extend its FedNow instant payments service to support cross-border payments. U.S. banks, payment providers and their foreign partners will be able to send and receive near-instant international transfers through connected partners and interoperable messaging standards.

Planned work includes technical enhancements to the FedNow Service, expanded participant onboarding and cooperation with foreign payment operators and correspondent banks to route and settle payments across national borders. The extension will build on FedNow’s existing 24/7 real-time clearing and settlement functionality and aims to create pathways that link U.S. instant payments to foreign instant-payment systems and corridors that provide liquidity.

Implementation will proceed in phases: capability design and testing, pilot arrangements with selected partners, and broader availability to participants that meet operational, legal and compliance requirements. Federal Reserve guidance indicates that technical interoperability, operational readiness and regulatory compliance will determine the timing and scope of the rollout.

Operational changes will include adoption of richer, standardized payment messaging and improvements to participant directories and addressability so payments can be routed across systems. ISO 20022 is cited as an example of a compatible message format. Liquidity management and foreign-exchange handling will remain the responsibility of participating institutions and their chosen correspondent or FX providers; FedNow will not perform currency conversion.

Cross-border use will require enhancements to compliance screening, sanctions checks and reconciliation processes to meet anti-money-laundering and counter‑terrorist financing obligations. Real-time end-to-end settlement across jurisdictions will be possible only where partner systems can process instant payments at all hours and support compatible message formats. Where counterpart systems do not operate on the same rails or standards, participants may use gateway arrangements, correspondent relationships or intermediary services that translate formats and manage currency exchange.

The initial focus is expected to be on corridors where partners are ready to connect and on business-to-business payments and remittances that can benefit from faster settlement and improved tracking. Banks and payment service providers will need to upgrade internal processes to support 24/7 operations, liquidity provisioning and real-time exception handling. Smaller institutions and some international partners may use third parties to access FedNow cross-border capabilities rather than connecting directly.

Regulatory and supervisory requirements will apply. Participants must meet U.S. anti‑money‑laundering and sanctions obligations and ensure privacy and data‑sharing arrangements align with domestic and foreign laws. Market participants are expected to demonstrate operational resilience and cybersecurity protections before being authorized to use FedNow for international transactions.