Despite the delays since the Fed first began its faster-payment work in 2013, there is little dispute over the benefits of a faster U.S. retail-payment system – almost everyone agrees with the Federal Reserve that RTGS in this sector would increase economic efficiency and be of significant benefit to individuals and small businesses that would no longer need to await delayed payment, possibly incurring overdraft fees, taking out costly short-term financing, or assuming other burdens that undermine efficiency and thus at least to some degree slow economic growth.  Given the importance of rapid payments to low-and-moderate-income households, the costs incurred in funds-availability delays are particularly onerous; faster payments thus also have clear economic-equality benefits. The heart of the controversy thus is not if there should be RTGS retail payments, but rather if the Fed through the Reserve Banks should take on an owner/operator role in yet another facet of the U.S. payment system.

The full report is available to retainer clients. To find out how you can sign up for the service, click here.