FED Consults on Potential Actions to Facilitate RTGS for Payments

While FED is not committing to specific actions, it is seeking input on whether the following the potential actions, separately or in combination—or any alternative approaches—would help achieve ubiquitous, nationwide access to safe and efficient faster payments:

• Development of a service for real-time gross settlement (RTGS) of faster payments that would be available 24 hours a day, seven days a week, and 365 days a year (24x7x365)
• 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, whether those services are provided by the private sector or the Federal Reserve Banks

Real-time settlement avoids interbank credit risk by aligning the speed of interbank settlement with the speed of underlying payments. Thus, 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 FED could encourage more banks to develop faster payment services, thus creating more choice for consumers, households, and businesses. Additionally, a liquidity management tool could improve the level of participation by banks in a real-time settlement infrastructure for faster payments and thus lead to public access to faster payment services, by mitigating risk that can arise for banks, outside of the standard business hours.

Related Links

• Press Release
• Consultation (PDF)

Comment Due Date: December 14, 2018

Keywords: Americas, US, Banking, PMI, RTGS, Interbank Settlement, SIPS Initiative