Fintechs Push Fed Payment Account to Open Direct Settlement for Non-Bank Firms

The American Fintech Council and industry allies are urging the Federal Reserve to advance a limited-purpose payment account that would allow eligible non-bank financial firms to clear and settle payments directly on the Fed’s balance sheet without full banking privileges. The proposal, under review following a February 2026 Request for Information, would cap overnight balances, pay no interest, bar access to the discount window, and limit use to Fedwire and FedNow. Proponents argue the current model increases costs, slows settlement, and creates operational dependencies, while opponents, including the Bank Policy Institute and Financial Services Forum, warn of heightened run risk, concentration of deposits outside the federal safety net, and compliance challenges, particularly for stablecoin and crypto-related activities. The Fed’s decision could shape the boundaries of banking, fintech, and the role of non-bank participants in U.S. payments infrastructure.