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- Federal Reserve Financial Services is preparing FedNow to support the U.S. leg of cross-border payments using enhanced ISO 20022 messages.
- Payall Payment Systems is among a small group of early adopters testing the enhanced message formats before broader implementation.
- The proposed Regulation J change allowing participants to use other intermediaries remains unfinished after the public comment period ended.
Federal Reserve Financial Services is preparing FedNow to support the U.S. leg of cross-border payments, with early adopters testing enhanced ISO 20022 messages that can carry information for transactions involving senders or recipients outside the United States.
The expansion will not turn FedNow into an international or foreign-currency settlement network. Correspondent banks and other intermediaries would continue handling the international portion while FedNow settles the domestic transfer between U.S. institutions.
FedNow Would Settle U.S. Leg of International Payments
The planned model supports so-called One-Leg Out transactions, where the ultimate sender or recipient can be outside the United States.
An inbound payment could move through an international correspondent before entering FedNow for instant domestic settlement. An outbound transaction could use FedNow for the U.S. transfer before an intermediary handles the payment outside the country.
FedNow has operated 24/7 since its July 2023 launch but was initially restricted to domestic payments. Federal Reserve Financial Services says enhanced ISO 20022 formats will provide the additional payment-party and transaction information needed to support cross-border use cases.
Payall Joins Early Testing of Enhanced ISO 20022 Messages
Federal Reserve Financial Services says a small group of early adopters is testing the enhanced message formats before broader implementation.
Payall Payment Systems says it is among the early adopters supporting the cross-border work. The company is already a certified FedNow service provider and supplies payment, compliance and risk-management infrastructure to financial institutions.
The testing does not add foreign-currency settlement to FedNow. International settlement and foreign-exchange activity remain outside the service, while participating institutions remain responsible for applicable sanctions, anti-money laundering and other compliance requirements.
Regulation J Change Still Awaits Final Approval
The legal framework is also unfinished. In April, the Federal Reserve Board proposed amending Regulation J to let FedNow participants use intermediaries other than Federal Reserve Banks within a payment chain.
That would allow a correspondent or other permitted intermediary to handle the international portion while FedNow processes the US domestic leg. The public comment period ended June 9, but the proposal remains listed by the Federal Reserve as suggested rather than final.
FedNow processed 4,997,811 customer payments worth $274.66 billion during the second quarter of 2026.
Federal Reserve Financial Services has not announced a date for general cross-border availability. Broader deployment still depends on technical implementation and the regulatory and operating-rule changes required for the new payment structure.
