Instant payments often aren’t “instant” at all, due to lags between when money is sent and received. These lags can be costly for people who need the money immediately to pay bills on time.

Some end up paying late or overdraft fees. Others are forced to turn to expensive alternative financial services, like payday loans.

Brian Clarke is a payments analyst and deputy director in the Regional & Community Outreach department at the Boston Fed. He spoke with us about the emergence of truly “real-time” instant payments, when money is sent and received in seconds. He says this speedy payment processing can really help small businesses and lower-income households avoid fees and costly services.

The FedNow Service is the Federal Reserve’s real-time instant payments infrastructure. Learn more about it at https://explore.fednow.org/about. For more interviews and analysis of the economy in New England and nationwide, visit BostonFed.org/SixHundredAtlantic.aspx. Subscribe to our email list to stay updated on new episodes.