NowPrecip is a real‐time probabilistic precipitation areal nowcasting system, which has been operational in MeteoSwiss since 2020. The original version, NowPrecip 1, centered on a localization architecture that was capable of capturing and replicating the orographic precipitation behavior in the complex terrain of Switzerland. A new version, NowPrecip 2, has been constructed, which introduces a number of innovations and a new flow design. The two methods naturally share characteristics, but they are technically distinct. In this article, the algorithms of the NowPrecip 2 are described in detail, especially improvements on the optical flow, innovative methods of determining intensity‐based growth and decay profiles, temporal disaggregation techniques, and so on. The algorithms presented are straightforward in a programming sense and could potentially inspire enhancements in other nowcasting applications too. While this article is dedicated to the methodology, a companion article of this series provides full verification results of this effort.