TAMPA, Fla. (WFLA) — The federal government wants to help you receive payments and pay bills in real time.
This week, the Federal Reserve launched the first phase of an instant payment system called FedNow.
The government claims the system will modernize how we send and receive payments in this country. However, some consumer advocates are already sounding the alarm and say the system could become another avenue for crooks to use to trick consumers into forking over their hard-earned money.
“To us, instant payment just means instant fraud, instant theft, scams, more instant,” said Teresa Murray, of Public Interest Research Group, PIRG. “There are a number of problems that exist with Zelle and some of the other peer-to-peer apps, and we don’t have any indication that the FedNow service will solve any of those problems.”
The system rollout began Thursday, but it could be a while before it is available to most consumers. So far, 35 banks and credit unions have signed up to use FedNow.
While many consumers use other payment apps, such as Zelle, Venmo and PayPal, FedNow is expected to operate differently. Instead of using a third-party app or website, FedNow will be available only through banks and credit unions, taking out the middle man.
The service will be available 24 hours a day and the money will transfer within seconds.
