FedNow Service charges banks, not consumers, for instant payment access

The FedNow Service, a new instant payment service being launched by the Federal Reserve this summer, has prompted numerous baseless conspiracy theories about what it means for the future of money.

We’ve debunked several claims in recent months that it’s the start of a central bank digital currency, the end of paper money, and an effort to control and surveil Americans. A new claim on Facebook alleges the service will be extremely costly for consumers.

"Are you aware of what this is going to cost you? Because you have to pay to use the monetary system, the new one that’s coming around," said a man in an April 22 Facebook reel. As he spoke, a list of fees on a Federal Reserve website scrolled behind him.

"Are you ready for this — to pay 45 cents for every transaction you do? A dollar for liquid management transfers? Twenty five dollars per month, per account?" he continued. "Are you ready for this, guys? I don’t think you are, but you should get ready."

A caption on the video warns that people could lose their financial sovereignty and includes the hashtags #CBDC (for central bank digital currency) and #FedNow.

But the video misleads viewers about what the FedNow Service is, and who would pay the fees described on the website. The caption confuses the program with a potential central bank digital currency.

The FedNow Service is not a new monetary system, as the video claims. It’s a new instant payment infrastructure developed by the Federal Reserve that is launching in July. It allows financial institutions such as banks and credit unions to provide instant payment services to their customers, according to a Federal Reserve website. It’s optional to use.

It’s similar to existing payment services such as Fedwire and FedACH, the Federal Reserve explained in an April 7 Twitter thread.

FedNow has no relation to a central bank digital currency. The Federal Reserve, like central banks around the world, is studying the benefits and risks of a central bank digital currency system, but has not proposed using one. Implementing one would require congressional action.

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The FedNow fees shown in the video are real, but those wouldn’t be paid by consumers, said Jean Tate, a Federal Reserve spokesperson.

"The FedNow Service is a payment rail available to depository institutions, and is not a consumer-based payment app," Tate said.

The fees listed on the website would be charged to the depository institutions that use the service, Tate said.

Tate said the Federal Reserve can’t speak to what fees, if any, financial institutions might charge customers for services.

A video claimed that Americans would be forced to pay hefty fees with the new FedNow Service, which it falsely described as a new monetary system. But the service is not a monetary system; it’s designed to help financial institutions process instant payments faster and safer. 

The fees listed on a FedNow website would be paid by financial institutions that choose to use the service. What fees they may choose to pass on to consumers is unknown.

The claim is False.

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