The Federal Reserve Board is considering a proposal that would expand the operating days of its two payment networks so they both operate seven days a week, which would allow for the settlement of electronic payments, including direct deposits, over the weekend.
Currently, the two payment systems — the Fedwire Funds Service and the National Settlement Service — operate Monday to Friday, excluding holidays. The proposal would change that so that both systems would operate 365 days a year. The Fedwire Funds Service would be open for 22 hours per day and the National Settlement Service would be open for 21.5 hours per day. Use of the expanded hours by service participants, like banks and credit unions, would be voluntary.
“Providing large-value payment services every day would support the safety and efficiency of the U.S. payment system and help to position the nation’s payment and settlement infrastructure for the future,” the Fed said in announcing the proposal, which will be open for comment. It said it was responding to feedback from a range of service providers on the benefits that would go along with offering expanded service.
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Expanding the operating hours of its payment systems may improve the credit risk and operational efficiency of companies and spur innovation of payment solutions, the Fed said. On the other hand, there would be a significant cost to operating the platform seven days a week.
Consumer advocates applauded the proposal.
“Electronic payments seem instant, but in fact they can take up to three days to reach people because the Fed’s payment services do not operate on weekends. The Fed’s weekend closures can delay bills paid through your bank’s bill pay and can also push the direct deposit of your paycheck to Monday when you should have been paid on Saturday,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center, in a statement. “Fed processing of electronic payments 365 days a year and up to 22 hours a day will improve the lives of consumers by allowing them to receive their paychecks over the weekends and holidays and allow people to make more timely bill payments, potentially reducing late payment fees.”