Federal Reserve Financial Services announced on September 23 that participating financial institutions will be able to combine FedNow domestic settlement with established correspondent-banking arrangements for international transactions. According to reports from Federal Reserve Financial Services, the planned capability allows FedNow to settle the U.S. portion between participating domestic institutions while banks or approved intermediaries handle the overseas leg through cross-border arrangements selected by each participant. This model does not turn FedNow into an end-to-end global settlement network, maintaining the current structure where international payments rely on correspondent banking infrastructure.
A group of early adopters will test new FedNow message formats designed to carry information needed for payments involving senders or recipients outside the U.S. Payall Payment Systems is among the named participants, with President and CEO Gary Palmer stating the company's integration is intended to provide financial institutions with faster and more transparent processing for the U.S. portion of international payments while digitizing compliance and transaction-risk checks. As reported by Federal Reserve Financial Services, Payall's role includes helping banks 'un-nest' payment chains, screen parties and automate risk controls. Technical preparation for enhanced ISO 20022 specifications began in April through the MyStandards portal, allowing institutions active in international commerce to begin preparing system changes during 2026.
The most important unresolved step is regulatory approval, with the Federal Reserve Board's current rulemaking portal listing docket R-1891 as a 'Rulemaking Proposal' with the public comment period closing on June 9. According to Federal Reserve Financial Services, the functionality remains contingent on required amendments to Regulation J and corresponding changes to Operating Circular 8 receiving approval from relevant Federal Reserve governing bodies. The American Bankers Association has recommended clarifying how sanctions, anti-money laundering and fraud checks should work when a FedNow payment forms part of a cross-border chain, while Stripe argued that existing FedNow operating framework contains residency restrictions for certain ultimate customers.
FedNow has demonstrated significant growth in domestic payment activity before international expansion. Federal Reserve Financial Services reported 4.997 million settled customer payments during the second quarter of 2026, representing 83.2% growth from the first quarter. The combined value reached ₹274.66 billion compared with ₹271.25 billion in the previous three months, while average daily volume rose from 30,317 payments to 54,921. For all of 2025, FedNow processed 8.41 million payments worth ₹853.4 billion, representing 458.9% annual volume growth and more than 2,100% growth in settled value compared with 2024. The network now spans more than 1,500 participating financial institutions.
The broader real-time payments ecosystem is experiencing explosive growth, with the RTP network processing $405 billion in Q4 2025, up from $80 billion a year earlier, while FedNow volume grew about 460% year over year (Fiserv, 2026). This growth reflects the increasing demand for faster, more connected payment experiences that organizations cannot afford to ignore. Cross-border testing is expected to proceed while the Regulation J process remains unfinished, with Federal Reserve Financial Services not publishing an exact date for general availability. The service currently operates 24 hours a day, seven days a week, with potential uses including international payroll, corporate payments, property transactions, insurance disbursements and global treasury activity.
