Fed Announces 2025 Payment Services Pricing, Including FedNow Updates

The Federal Reserve has announced its 2025 pricing for payment services, introducing new fee structures and revealing early adoption metrics for its FedNow instant payment service, while implementing broad changes across its traditional payment services.

FedNow, which launched in July 2023, processed 414,827 transactions between January and August 2024, with participation growing from 400 to just under 1,000 financial institutions. The service projects operating expenses of $245.5 million for 2025, a modest increase of $0.6 million from 2024.

The Federal Reserve notes that broad adoption across the industry’s more than 9,000 financial institutions will be a gradual journey, similar to the adoption pattern seen with FedACH in the 1970s and 1980s.

In a significant change, the Federal Reserve will modify FedNow’s fee structure to exclude “on-us” transactions – those sent and received at the same financial institution. The service will maintain its $0.045 fee for credit transfers while offering a discount for the first 2,500 monthly transactions in 2025. The general participation fee of $25.00 will be discounted to zero in 2025.

The broader pricing announcement shows a 2.8% average price increase across mature services. The Federal Reserve is introducing new volume-based fixed fees for Fedwire Funds Service, ranging from $250 monthly for mid-volume users to $500 for high-volume customers, aimed at stabilizing revenue and addressing challenges associated with revenue volatility.

Check Services continues to face declining volumes, with the Fed projecting it won’t achieve full cost recovery in 2025, reaching only 97.5% cost recovery. The Reserve Banks anticipate Check Services revenue to be $107.1 million in 2025, a decline of $3.1 million from 2024 forecast. To address this decline, the Fed is implementing various fee increases, including raising Check 21 participation fees across all tiers.

The FedACH Service demonstrates strong performance, with a projected 106% cost recovery rate for 2025. Total expenses for this service are expected to reach $179.8 million, an increase of $10.8 million from 2024. Through August 2024, FedACH commercial origination and receipt volumes were 7.7% and 5.3% higher respectively compared to the same period last year.

In a move to streamline services, the Reserve Banks are discontinuing FedComplete Premier and FedLine Exchange services. They are also preparing to implement a new fee structure for Application Programming Interface (API) services in 2025, though specific pricing details will be announced later.

The Fedwire Securities Service will maintain current price levels in 2025, projecting a 115.7% cost recovery rate. The service anticipates continued growth in Treasury transfer volumes, with a projected 9.4% increase in 2025.

All new fee schedules will take effect January 1, 2025, as the Federal Reserve continues to balance service modernization with cost recovery requirements mandated by the Monetary Control Act of 1980.