The Federal Reserve Bank (FED) plans to implement a real-time payments system set to begin operating by 2023 or 2024. The FedNow Service will modernize the payments infrastructure and allow businesses more flexibility in managing money and making time-sensitive payments.
Food Marketing Institute (FMI) has worked with the FED over the years to identify challenges and opportunities in the U.S. payments ecosystem, including the potential of real-time gross settlements (RTGS). Hannah Walker, VP, political affairs, offered the following statement regarding the initiation of the payment program:
“We’re extremely pleased with the FED’s announcement to create a real-time payment system and thank the governors for their support. It is a commonsense solution that will bring U.S. payments into the 21st century, in order to mirror what is happening in the global market.
“For food retail businesses, it will spur innovation, create certainty in payments and free up the billions of dollars in capital that’s fettered in transit. RTGS promote real-time transparency into actual credit charges and eliminates the days of “pending” transactions that become added to total card balances.
“We participated in the FED’s New York listening session and co-wrote a joint letter to the FED Governors and lawmakers urging support for real-time payments. In December 2018, FMI enthusiastically submitted comments strongly supporting the FED’s proposal to move forward with standing up a RTGS system here in the U.S. We sincerely thank the FED for listening to the voices of food retailers on why RTGS is the right step for a more competitive payment ecosystem. As the payment system becomes established, FMI will continue to be engaged moving forward.”
FMI advocates on behalf of the food retail industry, which employs nearly five million workers and represents a combined annual sales volume of almost $800 billion. FMI member companies operate nearly 33,000 retail food stores and 12,000 pharmacies. FMI membership includes the entire spectrum of food retail venues, single-owner grocery stores, large multi-store supermarket chains, pharmacies, online and mixed retail stores.
Through programs in public affairs, food safety, research, education, health and wellness and industry relations, FMI offers resources and provides benefits to almost 1,000 food retail and wholesale member companies and serves 85 international retail member companies. In addition, FMI has almost 500 associate member companies that provide products and services to the food retail industry.