Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Payment Account topic
No spam. Unsubscribe anytime.
Federal Reserve governor asks staff to study a new ‘payment account’ to speed access for payments innovators
Summary
At a Federal Reserve payments conference, Governor Chris Waller described a prototype 'payment account' — a streamlined Fed account for legally eligible payment innovators with balance caps, no interest and limited privileges — and asked staff to study the idea and consult stakeholders.
Governor Chris Waller opened the Federal Reserve Board’s payments innovation conference by saying the Fed intends to “embrace the disruption” of new payments technologies and asked staff to study a prototype he described as a ‘‘payment account.’’ Waller said the account would offer a streamlined way for legally eligible payment firms to access Federal Reserve payment rails while controlling balance‑sheet effects and operational risk.
Waller said the payment account — sometimes described in his remarks as a “skinny master account” — would provide access to Fed payment infrastructure without a full suite of master‑account privileges. “These lower risk payment accounts would have a streamlined timeline for review,” he said, adding that the Reserve Banks would not pay interest on balances, might impose balance caps, would not allow daylight overdrafts and would be ineligible for discount‑window borrowing. “If the balance in the account hits 0, payments will be rejected,” Waller said.
Why it matters: the Fed’s idea is aimed at firms that provide payments services primarily through third‑party banks today and that may not need the broader services and supervisory requirements that accompany full master accounts. By tailoring access, the Fed would seek to reduce friction for innovation while limiting risk to the Reserve Banks’ balance sheets and to the wider payment system.
Waller framed the concept as early and exploratory. “I want to be clear that this is just a prototype idea to provide some clarity on how things could change,” he said, adding that staff will engage a wide set of stakeholders as they frame the proposal. He also stressed that public‑sector provision of platform services should be rare and targeted to specific market needs, with private‑sector innovation otherwise encouraged and preserved.
Next steps: Waller said Fed staff will examine design options and solicit industry views; he signaled further announcements and consultations would follow. The governor emphasized that any operational or legal changes would require careful study and transparent engagement with banks, fintechs and other market participants.
