The U.S. Treasury’s Bureau of Fiscal Service provides central payment services to the American public on behalf of government agencies. They operate the Federal Government’s collection and deposit system.
In 2021, they disbursed over 1B payments related to IRS tax refunds, Social Security benefits, Federal salary, etirement benefits and more.
The fact that the U.S. Treasury has joined the FedNow pilot likely means these payments and others are destined to be processed instantly over the FedNow payment rail. Over 120 banks are already testing this new rail that will launch by July 2023.
With the U.S. Treasury now on board, banks of all sizes will want to be enabled to at least receive FedNow payments so their consumers can receive government funds instantly to their bank accounts.
More information about FedNow and the instant payments landscape in the U.S. can be found at our Instant Payments white paper.
