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Fed's Schmid: Merchants may accelerate adoption of FedNow

BY Reuters | ECONOMIC | 10/21/24 06:23 PM EDT

Oct 21 (Reuters) - Kansas City Federal Reserve Bank President Jeffrey Schmid on Monday said it's possible that retailers rather than banks themselves could be the agents that push for wider adoption of the Fed's new instant-payment infrastructure, called FedNow.

"It's probably going to be merchants and users that end up kind of pushing the market to get more efficient around the payments versus using a credit card," Schmid said, noting reports that Walmart (WMT) may seek to allow online shoppers to make payments directly from their banks as a way to reduce the fees it pays when customers use credit cards. About 1,000 of the 9,000 eligible U.S. financial institutions have so far signed up, he said, but as "the payment system of the future" FedNow could become more widely used if merchants like Walmart (WMT) accelerate its maturation. (Reporting by Ann Saphir; Editing by Leslie Adler)

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