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Will FedNow replace PayPal?
FedNow will not officially replace PayPal or other instant payment services including Venmo, Zelle, or RTP. While it is possible that FedNow could eventually gain wider adoption than instant payment alternatives, the Fed (which manages FedNow) does not manage services like PayPal and has not shared any plans to introduce policy that would end other instant payments options.
FedNow will be used by any bank or credit union that chooses to adopt the service. Individuals, businesses, and government entities with accounts at participating banks will have access to FedNow.
The Fednow charge per transaction for sending money will be $0.045 for each credit transfer, paid by the sender. The charge per transaction to receive money will be $0.01 for each request for payment (RfP) message, paid by requestors.
The primary difference between FedNow and RTP is that they are distinct payment rails managed by separate parties. FedNow (releasing in July 2023) is managed by the Federal Reserve and RTP (originally released in 2017) is overseen by The Clearing House.
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