For five years, the Fed has been inching the US along a journey towards a payments system fit for the 21st century. In 2015 it put together a Faster Payments task force of more than 300 industry stakeholders, charging it with coming up with recommendations on the best way to achieve this.

That task force finally reported back last July, calling on the Fed to develop a 24/7 settlement system.

Over the last year, the Fed has come to the conclusion that its best bet is RTGS, deciding, as Fed governor Lael Brainard said in a speech on the issue this week, that, "a 24/7 economy with 24/7 real-time payments needs 24/7 real-time settlement, and RTGS is the way to achieve this".

Real-time settlement boosts the safety of faster payments by avoiding interbank credit risk, says the Fed. In addition, a nationwide real-time interbank settlement infrastructure should encourage more banks to develop faster payment services, creating more choice for consumers, households, and businesses.

However, the board says it is not committing to any specific action yet and is seeking public comment on the issue.

The board is also asking for feedback on a related idea: the creation of a liquidity management tool that would enable transfers between Federal Reserve accounts on a 24x7x365 basis to support services for real-time interbank settlement of faster payments, regardless of whether those services are provided by the private sector or the Federal Reserve Banks.

Says Brainard: "The future of payments will be determined by the actions we take today. We can wait and watch how these issues evolve on their own. But this will likely result in a fragmented patchwork of systems that entails inefficiencies and risks and could leave behind many households, small businesses, and smaller banks.

"Alternatively, we can work with other stakeholders to embrace innovation and design a faster payments infrastructure for the future to promote broad access and resilience."