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FedNow
FedNow is a real-time payment service developed by the Federal Reserve to enable instant payment between financial institutions. Launched to improve the speed and efficiency of transactions, FedNow allows individuals and businesses to send and receive funds almost instantly, regardless of banking hours. It is designed to enhance the U.S. payment infrastructure, providing a faster alternative to traditional payment systems like ACH and wire transfers. The service is designed to reduce payment delays, support faster disbursements, and improve cash flow management.
With the rapid nature of FedNow transactions, fraud prevention becomes increasingly critical. Criminals may attempt to exploit the speed of the system to initiate unauthorized or fraudulent payments. Institutions leveraging FedNow must adopt real-time fraud detection tools and enhanced customer authentication methods to prevent fraudulent activity. By integrating these safeguards, organizations can take full advantage of FedNow’s benefits while mitigating risks associated with faster payments.
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