The Federal Reserve Board has launched a public consultation on a new type of Reserve Bank account designed for institutions focused mainly on payments. Known as a “Payment Account,” the proposal aims to give eligible firms limited access to Federal Reserve payment services while tightly controlling risks.
According to documents released in December 2025, the Payment Account would be a special-purpose account used only for clearing and settling an institution’s own payment activity. It would not be a full master account and would not change which institutions are legally allowed to access Federal Reserve services.
A response to payments innovation
The Fed says payment technology and business models have evolved quickly in recent years. Many non-federally insured institutions and fintech-style firms have asked for access to Fed payment rails to lower costs and speed up transactions, but some have struggled with long reviews or denials when applying for full master accounts.
Fed staff believe a tailored account could meet these needs while staying consistent with the Fed’s 2022 Account Access Guidelines, which apply stricter scrutiny to higher-risk applicants.
Strict limits by design
The proposed Payment Account would come with strong restrictions. Account holders would not earn interest on balances and would not have access to the discount window or intraday credit. Overdrafts would not be allowed.
Overnight balances would be capped at the lesser of $500 million or 10 percent of the institution’s total assets. During the day, higher balances would be allowed only to settle payments.
Access would also be limited to a small set of Fed services that have automated controls to prevent overdrafts, including Fedwire Funds, FedNow, the National Settlement Service, and Fedwire Securities for free transfers only. Services such as ACH, check processing, and cash services would be excluded.
Faster reviews, limited scope
Any institution that is legally eligible under the Federal Reserve Act could apply for a Payment Account. Reserve Banks would still decide whether to approve or deny requests, but the Fed expects most reviews to be completed within about 90 days, faster than many master account applications.
The Fed is asking the public to comment on whether the design supports payment innovation, whether the balance limits are appropriate, and how risks such as money laundering and cyber threats should be managed.
If adopted, the Payment Account could offer a new, middle-ground option, giving payment-focused institutions access to core Fed infrastructure without extending full central bank banking privileges.