Federal Reserve Proposes New Payment Account Framework for Fintech Access
The Federal Reserve Board is seeking public comment on a proposal that would establish a new type of “payment account” allowing certain legally eligible financial institutions to directly clear and settle payments through Federal Reserve payment services.
The proposal is aimed largely at fintech firms and other nonbank financial institutions seeking faster and lower-cost access to U.S. payment infrastructure. The Fed said the framework is intended to support payment innovation while limiting risks to the broader financial system.
Under the proposal, payment account holders would not have access to intraday credit, the discount window, or interest on balances held at Reserve Banks. Access also would be limited to payment services with automated overdraft controls, including Fedwire Funds Service and FedNow.
The proposal would formally amend Regulation A, Regulation D, and the Federal Reserve’s Policy on Payment System Risk to establish the framework.
The Fed also revised several aspects of the proposal following feedback on a December 2025 request for information. Most notably, proposed balance limits would now be based on expected payment activity rather than a strict asset-based cap, with a maximum limit of $1 billion.
Additionally, the Board encouraged Reserve Banks to temporarily pause decisions on access requests from certain Tier 3 institutions, generally entities that are not federally insured or subject to federal prudential supervision, until the policy process is completed.
The proposal follows growing industry debate over whether fintech and digital asset firms should receive direct access to Federal Reserve payment rails. Supporters argue the move could improve payment speed and competition, while critics have raised concerns about regulatory oversight and financial stability.
