All you need to know about the FedNow launch 🏦; Sam Altman's Worldcoin goes live 👁️; Who’s driving the buying and selling of Bitcoin in 2023? 📈
FinTech is Eating the World, 25 July
Hey Everyone,
Happy Tuesday! Today we’re looking into the FedNow launch (all you need to know + why it matters), Sam Altman's Worldcoin going live (it’s ambitious but what could go wrong here?), and see who’s driving the buying and selling of Bitcoin in 2023 (it’s not what you think it is!). Let’s jump straight into the interesting stuff 🌶
All you need to know about the FedNow launch 🏦
The launch 🚀 The Federal Reserve has finally launched its long-awaited instant payment service, FedNow.
FedNow lets banks and credit unions transfer up to $500,000 directly from account to account in seconds, speeding up money movement for businesses and individuals. It runs 24/7, so no need to count “business days.”
More on this 👉 Numerous banks and financial entities tested the Real-Time Payments (RTP) network, with several gaining official certification. The initial users encompass 35 banks and credit unions, 16 service providers, and the Treasury's Fiscal Service Bureau, including notable names like JPMorgan Chase JPM 0.00%↑, Wells Fargo WFC 0.00%↑, and BNY Mellon BK 0.00%↑.
Interesting fact: Adyen is the only European company/FinTech that currently has FedNow access.
ICYMI: Adyen keeps doing what it does best: dominating in payments 💸 [+ a deep dive into the underrated FinTech giant]
Why it matters? 🤔 FedNow holds the potential to revolutionize the US payment infrastructure (see the first graph again).
With its introduction, the US finally aligns with other nations boasting successful RTP frameworks, like Brazil's Pix and India's UPI. Additionally, by sidestepping interchange and associated fees, FedNow can lead to cost savings for merchants. As a government-controlled platform with no profit motives, its pricing could be more competitive than other A2A payment solutions. Moreover, by supporting 24/7 real-time payments, it can ensure immediate funds access for businesses, enhancing cash flow. So it’s a big thing for sure.
On the other hand, some people believe that the American tool is a little late to the party — Brazil’s instant payment system, Pix, was created in 2020, India launched its tool as well that year with Unified Payments Interface going live, and even earlier, Bank of England created its Faster Payments System (back in 2008).
ICYMI: India is the Next BIG Thing 🇮🇳🚀 [+ how India is disrupting payments globally]
✈️ THE TAKEAWAY
Looking ahead 👀 One thing is clear - the launch is definitely promising and the potential is surely huge. Yet, it still remains uncertain if FedNow will achieve immediate popularity. In fact, its widespread acceptance and the realization of its full potential might take years, as noted by Federal Reserve representatives in a chat with WSJ. On top of that, we must remember that instant-payment systems haven't gained much traction in countries like the UK. But the benefits of real-time transfers could make the transition worth it for some, and banks that offer FedNow could have a leg up.