The Fed Proposes Letting FedNow Cross Borders. Real-Time Payments Infrastructure Gets Its Most Consequential Test.

The Federal Reserve has proposed amending Regulation J to allow FedNow participants to use correspondent banks and other intermediaries for the international leg of cross-border transactions, while settling the domestic portion through FedNow in real time. The proposal, published April 10, 2026, follows the Fedwire model: a U.S. bank would route the international component through a correspondent while the domestic settlement remains instant. The Clearing House has recommended a two-phase pilot period before broader adoption. Currently, FedNow prohibits non-Federal Reserve intermediaries, which restricts the network to purely domestic transactions and blocks cross-border real-time settlement entirely.

The demand case is documented and substantial. PYMNTS Intelligence and Mastercard research shows that 43% of U.S. small and medium-sized businesses that source internationally identify faster payment settlement as their top cross-border payments priority. Twenty-seven percent say they would switch payment providers to get it. For those businesses, FedNow’s current domestic-only constraint means real-time settlement is available for domestic vendor payments but unavailable the moment the transaction crosses a border, creating a structural inconsistency in working capital management that slows sourcing cycles.

The industry response to the proposal reveals the breadth of the coalition behind cross-border real-time settlement. Stripe called the amendment a measure that “closes a consequential gap in U.S. payment infrastructure” and urged the Fed to finalize it “without delay.” Wise called it “a meaningful step to making cross-border transactions more efficient.” The alignment of a consumer-facing international transfer platform and a developer-first payments infrastructure company behind the same regulatory request is a signal worth noting: this is not a narrow special-interest push. The fintech community has reached consensus on the direction. The timeline is now the primary variable.

Source: PYMNTS