The Federal Reserve says its FedNow Service, a new system for instant payments similar to Venmo or CashApp, is now live. The Fed says that banks and credit unions of all sizes can use this tool to transfer money instantly for their customers, 24/7, all year round.

Federal Reserve Chair Jerome Powell stated Thursday that FedNow will make everyday payments faster and more convenient, benefiting individuals and businesses.

"Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid," he said in a statement.

35 banks and credit unions, along with the U.S. Department of the Treasury's Bureau of the Fiscal Service, were already using it. According to the Fed, this new system will allow people to receive paychecks instantly and help businesses manage their cash flow efficiently.

More financial institutions are expected to sign up for the service, providing customers with quick and secure instant payment options through mobile apps, websites, and other interfaces.

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