The lede: FedNow itself is a utility — the Federal Reserve doesn't monetize it and never will. But the Fed made a deliberate choice at launch: it would not build bank-facing software. Every one of the roughly 1,150+ banks and credit unions now live on FedNow had to get certified through a private "certified service provider," almost always their existing core banking processor. That's the toll booth. Every new instant-payments feature a bank rolls out — send, receive, request-for-payment, liquidity management tools — triggers another round of integration, testing, and certification work billed by the vendor that already runs the bank's core ledger. The policy catalyst (a Fed-run instant-payments rail) created a recurring, high-margin services annuity for a small number of incumbent processors that most investors never associate with "the Fed."
Who cashes in: