FED Consults on Potential Actions to Facilitate RTGS for Payments
FED is inviting public comment on the actions it could take to support faster payments in the United States. Comments are due by December 14, 2018. 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. FED had established the SIPS initiative in 2013 with the objective of engaging with the payment industry and other stakeholders to upgrade and enhance the payment system in the nation.
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.
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Comment Due Date: December 14, 2018
Keywords: Americas, US, Banking, PMI, RTGS, Interbank Settlement, SIPS Initiative
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