August 5, 2019 – Federal Reserve Board Governor Lael Brainard in a speech today announced the Board’s decision to invest in development of “FedNow,” a real-time interbank gross settlement system that will facilitate faster payments across the United States. FIN strongly supports this decision.
The following statement is attributable to Brian Peters, Executive Director, Financial Innovation Now:
“Today the Federal Reserve Board is taking a bold step into the future. Real-time payments can improve the economy, grow small businesses, and help American consumers keep up with everyday needs. FIN has long argued to policymakers that sending money should be as fast and easy as sending a text message. That future will not come for all Americans unless the Fed acts to ensure wide adoption of a real-time payments infrastructure that serves the economy and public interest. America’s payment infrastructure is long overdue for an upgrade, and today we heartily commend the Board’s resolve and leadership, which will result in a foundation for America’s future innovation. FIN looks forward to working with the Federal Reserve on a timely process that benefits all payment system users and stakeholders. This decision is a giant step forward, and history will look back at today’s announcement as the generation’s true payment milestone.”
FIN has long advocated for a more modern payment infrastructure. Last year FIN member companies called on the Fed to speed payments for all Americans. FIN also filed comments arguing that only the Fed is capable of ensuring broad access to real-time payments. The U.S. Treasury has also urged the Fed to take action.
FIN was a member of the Fed’s Faster Payments Task Force, which produced a number of important recommendations. FIN also served on the Fed’s Governance Framework Formation Team, which collectively formed the Faster Payments Council, a broad industry organization that is well positioned to help ensure payment innovation, ubiquity, and interoperability in the future.
Today Governor Brainard announced the Fed will develop “FedNow” a new real-time payment settlement service. The Board also released a federal register notice to further solicit feedback on such a system, as well as an FAQ document. Governor Brainard’s speech is available here and streamed online.