Fed will raise ’23 payment services fees, but not by as much as last year; FedNow fees for New Year outlined

A 2.9% average increase in prices charged for check clearing, ACH transactions and wholesale payment and settlement services will be in effect at the Federal Reserve Jan. 3, the agency said late Thursday. The increase is smaller than that announced by the Fed for 2022, which was an average of 3.7%.

In a release, the central bank also announced pricing next year for its new FedNow real-time payments service, noting it would be “substantially similar” to the pricing it announced early this year. In an attached Federal Register notice, the agency said the FedNow charges will be:

  • A $0.045 per-item fee for customer credit transfer and customer credit transfer returns. Customer credit transfers up to 2,500 transactions will be discounted to $0.00 in 2023 per RTN per month, the Fed said.
  • A $25 participation fee for each routing transit number (RTN) that enrolls in the service to receive credit transfers. However, the Fed said the fee will be discounted to $0 in 2023 per RTN per item.
  • A $0.01 fee for a request for payment (RFP) message to be paid by the requestor, including both requests for a new payment or funds to be returned.
  • A Request for Payment (RFP) fee of $0.01 per item.
  • A Liquidity Management Transfer fee of $1.00 per transfer.

The FedNow service, the agency said, is expected to launch between May and July of 2023.

Regarding the payment services fees, the Fed noted that it must, by law, establish fees to recover the costs of providing payment services. The agency said its Reserve Banks expect to “fully recover 100.2% of actual and imputed expenses in 2023, including the return on equity that would have been earned if a private-sector firm provided the services.”

Also in Thursday’s announcement, the agency said the Fed Board had approved the 2023 private-sector adjustment factor (PSAF) of $23.7 million for Reserve Bank priced services. “The PSAF is an allowance for income taxes and other imputed expenses that would have been paid and the return on equity that would have been earned if the Reserve Banks’ priced services were provided by a private business,” the agency said.

Federal Reserve Board announces pricing, effective January 3, 2023, for payment services the Federal Reserve Banks provide to depository institutions, such as the clearing of checks, ACH transactions, and wholesale payment and settlement services