long term. this common infrastructure would support connections across banks, and faster payment service providers acting as their agents, with the potential to weave together the current patchwork of systems. as a result, we would also expect the overall safety of faster payments to increase. the capability to finalize interbank settlement before funds are made available to the recipient would avoid an undesirable buildup of risk in the system. the more banks that have access to real - time as opposed to deferred settlement mechanisms, the lower the risk would be from deferring settlement to the payment system as a whole. although rtgs may be operationally demanding, it offers clear benefits from a risk and efficiency perspective over the long term. the development of a nationwide real - time interbank settlement infrastructure could also support the development of private - sector faster payment services, thereby increasing innovation and choice in the market. banks and technology providers of all sizes may be able to develop new services or enhance existing services by capitalizing on the underlying interbank settlement infrastructure. this could ultimately benefit all consumers by lowering costs, increasing choice, and improving quality. in that regard, we are also seeking comment on whether the reserve banks should consider developing a liquidity management tool that would operate 24 / 7 in support of services for real - time interbank settlement of faster payments. the tool could support settlement services provided by the private sector or the reserve banks. the federal reserve has a responsibility to promote a payment system that serves the evolving needs of the public. we hope to solicit as wide a range of views as possible as we consider these and possibly other options to support prompt, secure, and resilient settlement in a 24 / 7 world. to that end, the federal register notice poses a series of questions related to whether an rtgs is the appropriate strategic foundation for interbank settlement of faster payments. we also solicit views on the appropriate role for the federal reserve in such a system. we look forward to hearing from, and learning from, a broad array of stakeholders, including those who are actively involved in the provision of payment and banking services, as well as representatives of the consumers, households, and businesses who rely on the ability to make and receive payments every day. the future of payments will be determined by the actions we take today. we can wait and watch how these issues evolve on their own. but this will likely result in a fragmented patchwork of systems that entails inefficiencies and

/ october 1967, p. 143 ; bill medley, highways of commerce : central banking and the u. s. payments system ( kansas city : federal reserve bank of kansas city, 2017 ), p. 23, www. kansascityfed. org / ~ / media / files / publicat / highwasyofcommer / highwaysofcommerce. pdf? la = en. safe, efficient, and widely accessible payment infrastructure has been a crucial aspect of the fed ’ s mission from its founding in 1913. by creating a new core infrastructure for clearing and settling checks, the fed was able to boost confidence in banks and america ’ s payment system, ensure americans received the full value of their checks, and speed up payments. that was the first, but not the last, time that the fed played a central role in transforming america ’ s retail payment system. by the 1970s, the payment system was staggering under the weight of paper checks. in 1973, governor jeffrey bucher of the federal reserve board described the exponential growth in check volume and the time - consuming and expensive process to clear paper checks as a “ time bomb. ” 3 the federal reserve and payment system stakeholders faced a choice : continue making incremental changes to manage the growing avalanche of checks, or look to technology to facilitate transformational change. working with the private sector, the federal reserve chose transformation, and the effect was dramatic. in partnership with the private sector, the federal reserve supported the implementation of the automated clearinghouse, or ach system, to process payroll payments for individuals, bill payments for households, and vendor payments for businesses. before the advent of the ach, it would typically take a week for an employee to be able to access the funds from a paycheck. it would require first a trip to the bank during business hours to deposit the paycheck and then several business days for that bank to complete the time - consuming process of collecting the funds from the employer ’ s bank. 4 with the advent of ach, an employee could expect to access their pay from their bank on the same day it was deposited electronically by jeffrey bucher, “ the check, ” ( remarks at the annual meeting, bank stationers association, colorado springs, co, june 4, 1973 ), https : / / fraser. stlouisfed. org / title / 931 / item / 36180. andre pollack, “ the new look to bankers ’ hours, ” new york times