Federal Reserve to develop real-time gross settlement
service for faster payments
The Board of Governors of the Federal Reserve System announced today that the Federal Reserve Banks will build and operate the FedNowSM Service, a new interbank 24x7x365 real-time gross settlement (RTGS) service with integrated clearing functionality to support faster payments in the United States. The decision came after an in-depth policy analysis, including the assessment of more than 400 public comments on an RTGS proposal outlined in last fall’s Federal Register notice. The Board is now seeking public comments on all aspects of the FedNow Service through the latest Federal Registernotice.
In a society that operates on a 24x7x365 basis, where you can instant message and post and consume content online at any time, faster payments have the potential to bring positive benefits to the U.S. economy. Real-time payments allow individuals and businesses to send and receive payments any time, any day, anywhere, and within seconds, have full access to those funds. The FedNow Service will support interbank settlement for financial institutions’ provision of end-to-end faster payment services and, in combination with private-sector real-time payment services, provide infrastructure to promote ubiquitous, safe and efficient faster payments in the United States.
The Federal Reserve’s role in payments
The Federal Reserve is committed to its mission to foster the accessibility, safety and efficiency of the nation’s payment system. Providing payment services, along with collaboration and cooperation with the private sector, is a key part of our ability to affect public policy objectives and achieve those goals for the benefit of the U.S. public. The Federal Reserve views support for faster payments as requiring modernization of, and upgrades to, Reserve Bank services alongside private-sector services, and broader modernization of the banking industry as a whole. Similar considerations have led central banks in various countries to develop modernized settlement infrastructures to support faster payments.
The Federal Reserve will also explore the expansion of Fedwire® Funds Service and National Settlement Service hours, up to 24x7x365. Subject to the outcome of additional risk, operational and policy analysis, the Board will seek public comment separately on this potential action.
How to comment
Comments are requested within 90 days of publication in the Federal Register, which is expected shortly. All comments will be posted to the Board website without alteration except when necessary for technical reasons or to remove sensitive personally identifying information. We encourage you to provide comments via the following options:
- Board website: Follow the instructions for submitting or viewing comments on the Proposals for Comment page
- Email: Send an email to firstname.lastname@example.org and include the docket number, OP-1670, in the subject line
- Fax: (202) 452-3819
- Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, DC 20551
The Federal Reserve Banks will host webinars during the comment period to provide an overview of the notice and answer questions. Visit FedPaymentsImprovement.org to learn more about the Board’s decision, and sign up for a webinar on the Fed Events page.