August 5, 2019
AAF Expert Thomas Wade Argues Against a Federal Reserve Real-Time Payment System
The Federal Reserve announced today that it will build its own real-time payments platform. AAF’s Director of Financial Services Policy Thomas Wade has repeatedly detailed the many flaws of this initiative.
“A Federal Reserve real-time payments platform would be costly, time consuming, duplicative, discourage competition, retard progress of existing real-time services, and is likely not consistent with the Fed’s mandate.”
The problems include:
- A real-time payments system already exists and is expected to have complete coverage by 2020;
- To participate in, supervise, and regulate this financial system simultaneously is an overwhelming conflict of interest, as demonstrated by the Fed’s participation in the automated clearing house market; and
- The Fed would need, optimistically, between three and five years to develop, test, and launch this system, at a cost of hundreds of millions of taxpayer dollars.
Wade on this issue:
- Primer: What Is A Real-Time Payments System, And Who Should Operate It?
- How The Federal Reserve’s Automated Clearing House Informs The Fed’s Proposed Real-Time Payments Entry
- Daily Dish: The Fed And Real-Time Payments
To schedule an interview with Thomas Wade on this issue, contact Andrew Evans at [email protected] or at 202.370.3446.