Fed Studying Simpler ‘Payment Accounts’ to Expand Access, Says Waller

A senior U.S. Federal Reserve official said on Tuesday that the central bank is studying the creation of a new type of account that would allow certain firms to access Fed payment services directly — without having to rely on banks or other intermediaries.

Fed Governor Christopher Waller explained that the so-called “payment account” is still in the prototype stage. The concept would give firms access to the Fed’s payment systems without granting them the full range of services and backstops that traditional banks receive.

“This is just a prototype idea and could evolve,” Waller said, adding that such a mechanism could broaden access to Fed payment infrastructure — typically reserved for banks — and open the door for fintech companies and other nonbank firms that have long sought entry into the system. The Fed has historically resisted extending master accounts to less tightly regulated institutions.

“Payment innovation moves quickly, and the Federal Reserve must keep pace,” Waller said during opening remarks at a Fed-hosted payments conference.

As chair of the Fed’s internal payments committee, Waller outlined how these streamlined or “skinny” master accounts might function. They could, for example, have limited balances, pay no interest, and prohibit overdrafts. Such accounts would also be ineligible for the Fed’s discount window — its emergency lending facility — though they might undergo a simplified review process for approval.

“The payments landscape, and the types of providers operating within it, have changed dramatically in recent years,” Waller said. “A new kind of payment account could better reflect this new reality.”