The Federal Reserve has proposed changes that could expand how financial institutions use the FedNow® Service in cross-border payment flows.
Under the proposal, participating banks and credit unions could use intermediaries—such as correspondent banks—for parts of a transfer. FedNow could then support the domestic U.S. leg while an intermediary handles the international portion.
What the proposal would change
Today, a FedNow transfer generally involves two U.S. banks. The Federal Reserve’s proposal would allow a FedNow participant to use an intermediary other than a Reserve Bank for a funds transfer. The Federal Reserve says the change could support private-sector cross-border payment solutions.
It would not create a standalone global FedNow network. Rather, it could enable a model in which instant domestic payment infrastructure works alongside correspondent banking and international payment providers.
How a future payment flow could work
- A U.S. bank initiates a payment through FedNow.
- An intermediary or correspondent bank manages the international portion.
- The receiving institution completes the payment in the destination market.
- Structured payment data supports status visibility, reconciliation, and compliance processes.
The final design, participant responsibilities, and operational requirements would depend on the outcome of the regulatory process and the payment providers involved.
Why this matters for global businesses
Cross-border payments still combine multiple institutions, currencies, sanctions and compliance checks, and settlement stages. Those layers can create delays, limited status visibility, and manual reconciliation work.
A more flexible FedNow framework could help payment providers connect faster U.S. domestic settlement with international payment networks. For businesses, the potential value is not only speed. It is better payment status data, clearer exception handling, and more automated treasury and accounts-payable workflows.
- Faster domestic settlement before or after the international leg
- Better interoperability with cross-border payment providers
- More predictable payment-status information
- Improved automation for reconciliation and operations teams
- New use cases enabled by richer ISO 20022 payment data
What financial institutions should monitor
This is a proposal, not a final rule. Financial institutions and payment providers should monitor whether it is adopted, the timing of any implementation, intermediary responsibilities, compliance and sanctions-screening requirements, and the data standards needed for cross-border use cases.
They should also assess how faster settlement would connect to their existing controls for beneficiary validation, transaction monitoring, exception management, and ledger reconciliation.
The broader payment infrastructure trend
The proposal reflects a wider industry direction: domestic instant-payment systems are being designed to interoperate with international networks, correspondent banks, and private payment platforms. Meaningful improvement in cross-border payments requires more than speed—it requires reliable identity data, compliance controls, transparent fees, end-to-end tracking, and automated reconciliation.
FedNow’s proposed expansion could become one part of that broader infrastructure evolution.