Board of Governors of the Federal Reserve System

The Federal Reserve Board on Wednesday invited public comment on actions the Federal Reserve could take to support faster payments in the United States. The potential actions, which would facilitate real-time interbank settlement of faster payments, build on collaborative work with the payment industry through the Federal Reserve System's Strategies for Improving the U.S. Payment System (SIPS) initiative.

Faster payment services are valued for the conveniences they provide, such as the ability to pay another individual on-the-spot using a mobile phone application. They also provide consumers, households, and businesses more flexibility in managing their money because faster payments can be sent and received at any time, on any day.

Views are being sought on two potential actions that may support the further development of faster payments in the United States while increasing the resiliency and security of services offered to the public: 1) the development of a service for real-time interbank settlement of faster payments 24 hours a day, seven days a week, 365 days a year (24x7x365); and 2) the creation of a liquidity management tool that would enable transfers between Federal Reserve accounts on a 24x7x365 basis to support services for real-time interbank settlement of faster payments, regardless of whether those services are provided by the private sector or the Federal Reserve Banks. The Board is not committing to any specific action and is seeking input on which, if any, actions the Federal Reserve should take.

"Consumers and businesses increasingly expect to be able to send and immediately receive payments at any time of the day, any day of the year," said Federal Reserve Board Governor Lael Brainard. "A 24/7 economy with 24/7 real-time payments needs 24/7 real-time settlement. That is where we believe that the Federal Reserve and the private sector together need to make investments for the future."

Real-time settlement avoids interbank credit risk by aligning the speed of interbank settlement with the speed of underlying payments. As a result, broad use of real-time settlement for faster payments could enhance the overall safety of the faster payments market in the United States. Development of a nationwide real-time interbank settlement infrastructure by the Federal Reserve could encourage more banks to develop faster payment services, creating more choice for consumers, households, and businesses.

A liquidity management tool could improve the level of participation by banks in a real-time settlement infrastructure for faster payments, and hence public access to faster payment services, by mitigating risk that can arise for banks outside of standard business hours.

The Board's Federal Register notice is attached. Comments are due by December 14, 2018.

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