FedNow Deploys Network API to Combat Instant Payment Fraud

CHICAGO, IL – April 23, 2026 – As the financial world accelerates its shift toward instant transactions, the Federal Reserve is rolling out a new weapon in the escalating war against payment fraud. Federal Reserve Financial Services (FRFS) has announced that its FedNow® Network Intelligence API will launch on April 28, 2026, for early adopters, providing a critical layer of security designed to build confidence in the real-time payment ecosystem.

The new Application Programming Interface (API) equips financial institutions and service providers with receiver account-level data observed across the FedNow network. This gives participants an unprecedented, network-wide view of behavioral trends, allowing them to better assess the risk of a payment before it is sent and funds are irrevocably moved.

“The network intelligence API delivers instant, network-level data insights that complement participants’ existing risk management capabilities, providing more information — and confidence — before a transaction is made,” said Nick Stanescu, executive vice president and chief executive of the FedNow Service. “This advancement reinforces our commitment to strengthening risk controls while maintaining the speed and reliability that define the FedNow Service.”

A New Shield in the Fight Against Fraud

The rise of instant payments has been a boon for consumers and businesses, but it has also created fertile ground for fraudsters. The speed and irrevocability of these transactions leave little room for error or intervention, a vulnerability that criminals have eagerly exploited. Authorized Push Payment (APP) fraud, where victims are tricked into sending money to scammers, has become a particularly acute problem. Industry estimates project that APP fraud losses in the U.S. could surge to nearly $15 billion by 2028.

With a reported 79% of organizations experiencing payment fraud attempts in 2024, the need for more sophisticated defenses is clear. The FedNow Network Intelligence API is designed to be a significant part of that defense. By leveraging historical data from across the entire FedNow network, the tool can identify anomalies and patterns that might indicate a high-risk transaction. This provides participating banks with a crucial perspective that extends beyond their own internal data.

For a financial institution, this means that when a customer initiates a payment, the institution can query the API to receive risk insights about the receiving account. This information can help determine whether to approve the transaction, flag it for additional review, or even present a warning message to the customer, empowering them to make a more informed decision. According to early adopters, the tool offers easy integration and significant benefits. One service provider executive noted that the API provides a unique “network-level view of transaction behavior that extends beyond their own data,” a capability previously out of reach.

Bolstering Confidence to Drive Adoption

Since its launch in July 2023, the FedNow Service has seen impressive growth, expanding from 57 initial participants to over 1,500 institutions. However, the adoption of full capabilities has been uneven. While many institutions are set up to receive instant payments, a smaller portion—only about 40% as of late 2024—have enabled the ability to send them. A primary reason for this hesitation has been the fear of fraud and the associated financial liability.

By directly addressing these security concerns, the Network Intelligence API is positioned as a catalyst to accelerate broader and deeper adoption. Increased confidence in fraud mitigation is expected to encourage more banks, particularly the small and mid-sized institutions that make up 95% of FedNow participants, to fully embrace sending capabilities. This is critical for building the ubiquitous network that the Federal Reserve envisions, where instant payments are a standard, accessible option for everyone.

This new tool is a direct response to industry feedback. Financial institutions have consistently sought more data and better tools to manage the unique risks of a 24/7/365 payment rail. By providing a network-level utility, the Fed is helping to level the playing field, giving smaller banks access to sophisticated risk intelligence that might otherwise be prohibitively expensive to develop in-house.

Balancing Speed with Security

The Network Intelligence API is a key component of the Federal Reserve's broader strategy to foster innovation while safeguarding the U.S. payment system. It joins a suite of existing risk management tools offered within the FedNow Service. FRFS is also actively exploring how to more easily enable Payee Name Verification through its FedDetect® Notification Services, which would provide another powerful check against APP fraud by confirming a payee's name matches their account details before a payment is sent.

In the competitive landscape of instant payments, the FedNow API offers a distinct advantage. While The Clearing House's RTP® Network has its own robust security protocols, and a vibrant market of third-party vendors offers advanced AI-driven fraud solutions, the FedNow API provides an authoritative stream of risk intelligence sourced directly from the network operator. It is designed not to replace other tools, but to enrich an institution's overall, layered security strategy, feeding valuable data into their existing fraud-detection engines.

This layered approach is essential for meeting increasingly stringent regulatory expectations. Under frameworks like Regulation J, financial institutions are required to maintain robust compliance programs for Anti-Money Laundering (AML) and sanctions screening. The speed of instant payments demands that these checks happen in real time, a significant operational challenge. The data provided by the Network Intelligence API can help FIs make faster, more accurate compliance decisions, ensuring they can operate securely within this new, high-speed environment.

Building a Resilient Payments Future

The launch of the Network Intelligence API is more than just a product update; it represents a foundational step in building a more secure and resilient instant payment ecosystem in the United States. By fostering a dual-rail system alongside the private-sector RTP Network, the Federal Reserve is promoting competition, reducing systemic risk, and ensuring widespread access.

A secure instant payment infrastructure unlocks a vast array of new possibilities. Businesses can improve cash flow, consumers can avoid late fees, and gig workers can get paid immediately. The security foundation provided by tools like the new API makes emerging use cases—from real-time B2B invoice payments and digital wallet funding to instant mortgage closings—more viable and attractive.

As the U.S. continues its transition away from slower, legacy payment methods, the demand for features like Request for Payment (RFP) will grow, and government mandates to phase out paper checks will accelerate the shift. The success of this transformation hinges on the system's underlying integrity. By embedding powerful risk mitigation tools directly into the network's architecture, the Federal Reserve is building the trusted foundation upon which the future of American commerce will operate.