For years, the United States trailed other global markets in delivering truly instant, always-available payments. While services like Venmo, Cash App, and Zelle offered fast transfers, they operated within closed ecosystems rather than with a unified, nationwide infrastructure similar to those real-time payments thriving across Asia. With the Federal Reserve’s introduction of FedNow in 2023, the U.S. finally has the chance to catch up, but it must act swiftly and decisively to seize the moment. Uptake of FedNow among U.S. banks remains limited, partly due to the cost and complexity of implementing the system. If FedNow hopes to rival the success of real-time payment networks in Singapore, Thailand, and China, it needs a faster rollout and a clearer value proposition.
Across Asia, entire markets have been transformed by frictionless payment rails that consumers and businesses trust for near-instant settlements. What took years to build elsewhere might now be achieved more quickly in the U.S., provided FedNow learns from Asia’s experiences. By focusing on interoperability, user-centric design, and strong public-private collaboration, the Federal Reserve can accelerate adoption, overcome banks’ hesitancy, and finally close the gap between American financial infrastructure and the real-time standards that have become commonplace in many Asian economies.
Lesson 1: Seamless Interoperability for Broad Adoption
In Asia, real-time payment (RTP) systems like Singapore’s PayNow and Thailand’s PromptPay have demonstrated that widespread interoperability is fundamental to unlocking mass adoption. Banks, e-wallet providers, and even government agencies share a common platform, enabling consumers to move money effortlessly between accounts and fostering a thriving competitive marketplace. By contrast, many U.S. financial institutions have historically guarded their payment networks, producing a fragmented ecosystem rather than a unified one.
If FedNow aims to drive large-scale adoption in a similar vein, it needs to encourage seamless integration across diverse banks, fintechs, and non-bank payment platforms. This means providing standardized interfaces and APIs that make it technically straightforward for financial players to connect, while also establishing clear business incentives. Even smaller community banks should find it viable to come on board, widening the network effect. The faster FedNow can enable real-time transfers between multiple institutions and payment types, the more appealing it becomes for consumers, small businesses, and corporations seeking a unified solution. By adopting lessons from Asia’s interoperability-centric approach, the U.S. can accelerate momentum for FedNow, ultimately creating a payment environment where transactions flow freely and banks see tangible benefits in joining.
Lesson 2: User-Centric Design and Simplicity
Asia’s most popular real-time payment systems make it effortless for consumers to send and receive money. Thailand’s PromptPay allows users to link bank accounts to mobile numbers or national ID cards, so transferring funds is as simple as entering a phone number. In Hong Kong, scanning a QR code through the Faster Payment System lets shoppers pay instantly, eliminating the need for cash or physical cards. These user-centric features encourage everyday usage and foster trust.
In contrast, the U.S. often struggles with clunky user interfaces, lengthy authentication steps, or multi-day processing delays. If FedNow wants to replicate Asia’s success, it must focus on a streamlined experience that resonates with both tech-savvy and less digitally literate consumers. This could include offering simple sign-ups, mobile number linking, or even the use of email addresses as payment identifiers. By reducing friction points, whether technical or behavioral, FedNow can position real-time payments not just as a convenience but as the new default. And once consumers feel confident in instant transactions, financial institutions will be motivated to upgrade their systems and commit more resources to widespread adoption.
Lesson 3: Collaborative Ecosystem and Public-Private Partnerships
In Asia, government bodies often work in tandem with financial institutions and fintech innovators, accelerating real-time payment adoption. Singapore’s PayNow, for instance, benefits from the Monetary Authority of Singapore’s active role in promoting standardization and enabling interoperability. Similarly, Thailand’s PromptPay was developed under the Bank of Thailand’s e-Payment initiative, ensuring that policy goals like financial inclusion and reduced cash dependency aligned with banks’ product strategies.
For FedNow, a similar spirit of cooperation could be pivotal. Regulators and central banking authorities can encourage banks to experiment with new overlays such as bill payments, merchant collections, or payroll solutions within a secure sandbox environment. By lowering barriers for fintechs to join the network, FedNow can unleash more innovative use cases that make real-time payments appealing beyond just peer-to-peer transactions. Moreover, structured public education campaigns or incentive programs could help smaller banks and credit unions, which often lack the budgets or expertise to implement cutting-edge solutions. If the Federal Reserve and private-sector players unite behind a shared vision of quick, accessible real-time payments, FedNow stands a far better chance of rapidly gaining traction, even among financial institutions that have historically resisted major infrastructure upgrades.
Lesson 4: Overcoming High Costs to Spur Adoption
While interoperability, user focus, and collaboration are vital, the economics of joining a new real-time payment system can still deter U.S. banks particularly smaller community institutions already wrestling with narrow IT budgets and compliance burdens. Setting up the necessary connectivity, upgrading core systems, and retraining staff all involve tangible expenses that can make FedNow appear more of a burden than a benefit at first glance.
In the U.S., banks have often expressed concerns about these integration costs, echoing apprehensions similar to those voiced during the rollout of the automated clearing house (ACH) system decades ago. To counter such hesitations, FedNow can take a page from the approach used by some American private networks, which have offered tiered pricing or subsidized pilot programs for smaller banks. Another option, drawn from successful initiatives in Thailand and Singapore, is to provide incentives such as fee waivers or lower connection costs during the early adoption phase. By lowering the financial hurdle to participation, FedNow can expand its reach more swiftly, encouraging network effects that ultimately benefit all users.
Ultimately, addressing the cost issue head-on is as crucial as the technology itself. Even the most advanced real-time rails will stagnate if banks cannot justify the associated expenses. A carefully structured cost model, combined with clear messaging about long-term efficiencies and revenue opportunities, can help FedNow persuade financial institutions that the short-term investment will pay off in the form of streamlined transactions and a modernized customer experience.
Conclusion
The United States finds itself at a pivotal moment in the evolution of payments, with FedNow poised to drive a nationwide shift toward instantaneous transfers. Although the U.S. has historically lagged behind markets in Asia that embraced real-time rails years ago, there is a chance now to catch up, perhaps even to leapfrog some of the early growing pains. Lessons from Asia’s interoperability, user-centric design, and robust public-private partnerships show that accelerating adoption hinges on building a system so seamless, trusted, and cost-effective that consumers and banks alike see immediate benefits.
Yet for FedNow to succeed, its backers must address the hurdles that continue to thwart many American financial institutions. By mitigating up-front costs, especially for smaller community banks, and offering clearer, more compelling incentives, the Federal Reserve can push the entire ecosystem toward a tipping point where real-time payments become the new standard. If FedNow can integrate Asia’s proven strategies while adapting them to the unique contours of the U.S. financial landscape, it may set the stage for a more inclusive, efficient, and innovative era of payments—one in which “waiting for funds to clear” becomes a thing of the past.