On Friday, the Federal Reserve Board requested input from the public on a “payment account” that eligible financial institutions could use to clear and settle their payments.
According to the Fed, rapid developments in the payments industry over the past few years have led to innovative approaches to banking. Financial institutions with new business models are looking for access to Federal Reserve payments services. The new payment account would support innovation and promote safe and efficient payments systems while meeting the limited needs of eligible financial institutions seeking payments and settling services, the Fed said. The tailored solution could lower risk to the payments system, resulting in a streamlined review of requests for payment accounts.
“These new payment accounts would support innovation while keeping the payments system safe,” Federal Reserve Governor Christopher J. Waller said. “This request for information is a key first step to ensuring that the Fed is responsive to evolutions in how payments are made.”
Officials said the payment account would be different than the master account that financial institutions use to access payment services from the Fed. The payment account would not pay interest, would not have access to Fed credit, and would be subject to balance caps, among other things. A payment account would also not expand or otherwise change legal eligibility for access to payments services from the Fed, officials said.
The request for input will be published in the Federal Register and the public will have 45 days to make comments after publication.