Moody’s report spotlights FedNow downside

The credit ratings agency Moody’s Investors Service this week spelled out potential drawbacks of the real-time payments system FedNow, which the Federal Reserve plans to launch next month, saying some payments players that “rely heavily” on card interchange fees for revenue could suffer.
Moody’s also noted in the June 26 report that around-the-clock availability of the new digital payment rail may require some FedNow users to increase investments in technology and staff to more closely monitor money movement 24 hours a day to guard against cyberattacks.
Given payments will move more quickly, the new system could also increase the possibility of bank runs, Moody’s said, pointing to the speed of withdrawals being a factor in the spate of bank failures earlier this year.