Fed Governor Calls for New Account Model to Support Payments Innovation

Governor Christopher J. Waller asked the Federal Reserve to explore a new type of account to give payments-focused firms direct access to Fed payment services without the full privileges of traditional master accounts.

In remarks at the Fed’s first Payments Innovation Conference, Mr. Waller said the "payment account" reflects the evolving payments landscape, where Fintechs, crypto-native firms, and AI-driven platforms are reshaping how money moves. He emphasized that the Fed’s posture toward emerging technologies has shifted from skepticism to collaboration, and that innovation must balance private-sector creativity with public infrastructure.

The proposed account, also dubbed a "'skinny' master account," would be available to legally eligible institutions and tailored to firms that currently rely on third-party banks for Fed access. Mr. Waller said the accounts would include strict risk controls: (i) no interest on balances; (ii) potential caps; (iii) no daylight overdrafts; and (iv) no access to the discount window. He stressed that the idea is still in the exploratory phase and that the Fed will engage stakeholders to assess its viability.

Mr. Waller concluded by calling for greater collaboration among banks, Fintechs, and crypto firms to build the next generation of payment systems.