Federal Reserve Pilots FedNow Cross-Border Messaging for US Instant Payment Network
Federal Reserve Pilots FedNow Cross-Border Messaging for US Instant Payment Network #
The Federal Reserve announced on September 23 that a group of early-adopter institutions would begin testing enhanced messaging formats designed to support the US domestic leg of cross-border transactions through the FedNow instant payment network.
This is the first extension of FedNow beyond domestic transfers since the service launched in July 2023. According to Federal Reserve Financial Services, the network now includes approximately 1,800 participating financial institutions, among them seven of the ten largest US banks, and reaches more than half of all US checking and savings accounts. In the second quarter alone, the service settled nearly $275 billion across roughly five million payments, with volume growing at a strong double-digit rate.
The cross-border capability is limited in scope. Under the pilot model, FedNow will settle only the US-side leg of an international payment in real time; the overseas portion will continue to move through correspondent banks and other intermediaries that have long handled cross-border transfers. Federal Reserve Financial Services has stated that this design does not make FedNow an end-to-end global settlement network, and the overseas leg will run on whichever rail the correspondent bank selects.
To support the linkage, the Fed is rolling out enhanced ISO 20022 message formats that carry the additional data fields required to identify and route transactions involving parties outside the United States, whether the institution is on the sending or receiving end. Early adopters will test the expanded message specifications before the capability becomes available to the full participant base.
Payall Payment Systems, a certified FedNow service provider that supplies payment, compliance, and risk-management infrastructure to financial institutions, confirmed it is among the organizations participating in the pilot.
The regulatory framework remains unfinished. In April 2026, the Federal Reserve Board proposed amendments to Regulation J, the rule governing the FedNow service, that would allow participating institutions to use intermediaries other than Reserve Banks when sending funds transfers through the system. Current rules have effectively confined FedNow to domestic transactions; the proposed change remains in the comment and approval process, and a full cross-border rollout depends on that rulemaking concluding.
Potential use cases cited by the Fed include international payroll, corporate-to-corporate transfers, and disbursements tied to property transactions, insurance claims, and global treasury management. Nick Stanescu, executive vice president and chief FedNow executive, said the service’s focus remains on building capabilities that matter most to participants and making instant payments easier, safer, and more powerful.
Copy link