The Federal Reserve Bank (FED) announced today its plans to implement a real-time payments system. The FedNow Service, set to begin operating by 2023 or 2024, will modernize the payments infrastructure and allow businesses more flexibility in managing money and making time-sensitive payments. Food Marketing Institute (FMI) has worked with the FED over the past years to identify the challenges and opportunities in the U.S. payments ecosystem, including the potential of a real-time gross settlements (RTGS). Hannah Walker, vice president, political affairs, offered the following statement regarding the initiation of the payment program:

“We’re extremely pleased with the FED’s announcement to create a real-time payment system and thank the Governors for their support. It is a commonsense solution that will bring U.S. payments into the 21st century, in order to mirror what is happening in the global market.

“For food retail businesses, it will spur innovation, create certainty in payments, and free-up the billions of dollars in capital that’s fettered in transit. RTGS promote real-time transparency into actual credit charges and eliminates the days of “pending” transactions that become added to total card balances. 

“We participated in the FED’s New York listening session and co-wrote a joint letter to the FED Governors and law makers urging support for real-time payments. In December 2018, FMI enthusiastically submitted comments strongly supporting the FED’s proposal to move forward with standing up a RTGS system here in the U.S. We sincerely thank the FED for listening to the voices of food retailers on why RTGS is the right step for a more competitive payment ecosystem. As the payment system becomes established, FMI will continue to be engaged moving forward.”