Federal Reserve Financial Services has announced plans to add cross-border support to FedNow, with Payall among early adopters.
The new functionality will allow participating financial institutions, whether they are sending or receiving funds, to serve customers whose transactions involve parties outside the US.
The move follows several years in which the service concentrated on developing the domestic instant payments market. According to Nick Stanescu, chief FedNow executive, participants have consistently identified cross-border use cases as a priority. The organisation describes the development as a first step towards addressing the international needs emerging across its ecosystem and has indicated that further capabilities are expected to follow.
How the cross-border model works
Under the planned structure, FedNow will process the US domestic leg of a cross-border payment, while the international portion will continue to move through established correspondent banking arrangements. This model is used across global payment systems, including the Fedwire Funds Service.
The approach means FedNow does not replace existing correspondent networks. Instead, it is designed to work alongside whichever cross-border arrangements a participant chooses to use, leaving that choice with the institution. Federal Reserve Financial Services presents the capability as a way for institutions to meet international demand while remaining aligned with evolving industry payment standards.
Early adopters to test new message formats
A group of organisations is set to test updated FedNow message formats that support sending and receiving the US domestic leg of cross-border payments. After this phase, all FedNow participants will have the opportunity to adopt the new messages. No specific date for broader availability has been disclosed.
Payall is among the early adopters preparing to integrate the functionality. Gary Palmer, president and CEO of Payall, said the integration is intended to give financial institutions a faster and more transparent option for handling the US leg of international transactions. The company also pointed to compliance-related benefits, including un-nesting complex payments, screening each party in real time, and digitising risk and compliance processes. Payall links the development to the growing expectation in commerce for instant execution across borders.
Use cases and implications
Federal Reserve Financial Services has identified several potential applications. These include international payroll and corporate payments for businesses operating globally, as well as time-sensitive international disbursements such as property transfers, insurance claims, and global treasury management.
For participating institutions, the development extends FedNow beyond purely domestic transfers and provides a means of serving internationally active customers through the same instant payment infrastructure. The Payall example also shows how early adopters are framing the capability around both speed and compliance, with transparency and party screening positioned alongside faster execution.
Federal Reserve Financial Services said it will continue to share progress updates with FedNow participants and the wider payments industry as the initiative advances.
