If increasing cost is on the X axis and increasing time to settle is on the Y axis, you really want to be in the lower, right quadrant. That’s where FedNow is. But you can still increase the cost if the commercial settlement requires it. In other words, there’s no reason why FedNow can’t have interchange in its use case. What it would mean is the network costs are an order of magnitude cheaper. Community FIs will end up having more margins for the same interchange, or they could pass some of that back to the community and still make their income without impacting their bottom line.
What it might impact is the networks themselves that charge more today than FedNow does for settlement. If you look at the card networks, their methods-set and settlement are two separate transactions. Somebody has to do the reconciliation, which Fred now eliminates. This is an efficiency gain and on top of that, it’s cheaper. If the FedNow use cases are bringing the same level of value to merchants as Visa and MasterCard, there is no reason for community institutions to charge any less.