A safe and efficient payment and settlement system that works in the interest of the public is vital to the U.S. economy, and the Federal Reserve plays important roles in helping maintain the integrity of that system. Since its inception, the Federal Reserve has been at the center of fundamental changes to the U.S. payment system, including early adoption of Automated Clearing House (ACH) and the transition to nearly all-digital check processing. And now, with the recent evolution of faster payments, the Federal Reserve Board (Board) is requesting public comment (Off-site) on potential actions the Fed could take to facilitate real-time, interbank settlement of faster payments.

Technological advancements are changing the ways people interact, conduct commerce and access information, while opening doors to improving the payment experience of individuals, households and businesses. Faster payments, for example, allow payments to be initiated and received at any time on any day, with funds immediately available, so recipients can better manage their money. But while different types of faster payments are emerging in the payment system, they do not enable senders to reach any recipient seamlessly on a nationwide basis. In addition, interbank settlement for some of these payments can lag by more than a day, posing risks that need to be managed.

In October, the Board published a Federal Register Notice (Notice) (Off-site) requesting feedback to help assess the potential actions under consideration for achieving real-time, interbank payment settlement, which could include developing:

  • A 24x7x365 real-time gross settlement (RTGS) service for faster payments that is available to conduct real-time settlement of individual transactions
  • A liquidity management tool that would enable transfers between Federal Reserve accounts on a 24x7x365 basis to support faster payment services, whether provided by the private sector or the Reserve Banks

How to comment

The Board is seeking feedback through December 14, 2018, on all aspects of the discussion presented in the Notice, including the specific questions posed at the end. We encourage interested stakeholders to provide comments via the following options:

  • Board website: Follow the instructions for submitting comments on the Proposals for Comment (Off-site) page
  • Email: Send an email to regs.comments@federalreserve.gov and include the docket number, OP-1625, in the subject line of the message
  • Fax: (202) 452-3819 or (202) 452-3102
  • Mail: Ann Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, DC 20551

In issuing the Notice, the Board is not committing to any specific actions at this time or in the future, but is committing to transparent communication with the public after reviewing the responses to this Notice and determining next steps.

For more information, including remarks from Federal Reserve Board Governor Lael Brainard and Federal Reserve Bank of Kansas City President Esther L. George, please visit FedPaymentsImprovement.org (Off-site).