The US Federal Reserve is set to introduce a service called FedNow, allowing Americans to send and receive payments in seconds, 24 hours a day, seven days a week.

FedNow aims to eliminate cash transfer settlement lag and aligns the US with countries like the UK, India, Brazil, and the EU.

The service will compete with private sector real-time payments systems like The Clearing House’s RTP network.

The service will settle directly in central bank accounts, unlike Venmo and PayPal.

The Fed aims to provide a competitive edge for clients, with smaller banks requesting access to real-time payments without paying larger competitors.

The service won’t charge consumers, but it’s unclear how banks would pass on costs.