Learn more about the Fed's role in the payments system, including information on the Payments Services function at the Federal Reserve Bank of Richmond.
The Federal Reserve has a long history in the nation's payments system. Part of the reason that Congress created the Fed in 1913 was to reduce the impact of banking crises on the system.
During the crisis of 1907, for example, many banks and clearinghouses refused to clear checks drawn on certain banks. This contributed to the failure of some institutions that were otherwise solvent. To mitigate such disruptions in the future, as well as to address perceived inefficiencies in check clearing, the Fed was charged with creating a national check clearing system.
In subsequent years, the Fed partnered with the private sector to improve several aspects of the payments system, including:
The U.S. payments system has become the largest in the world, transferring more than $4 trillion each day. Most of these funds are transferred between buyers and sellers through financial institutions. A large number of these institutions have accounts with one or more of the 12 Reserve Banks that, along with the Board of Governors, make up the Federal Reserve. As a result, the Fed is an important intermediary in clearing and settling interbank payments.
Through the services it offers and the relationships it has forged with its customers, the Fed helps ensure the resilience, efficiency and accessibility of the payments system that underlies our economy:
In the Fifth District, the Payments Services function at the Federal Reserve Bank of Richmond supports the nation's payments system from its offices in Richmond, Baltimore, and Charlotte. Collectively, Payments Services staff have the following mission:
We use our broad understanding of payments, technological expertise, and ability to forge strong partnerships to deliver high value, innovative services and thought leadership in payments.
Payments Services has four divisions:
In addition, the Currency Technology Office is headquartered at the Richmond Fed. This organization serves the cash processing operations of the Federal Reserve System as well as the U.S. Bureau of Engraving and Printing and the U.S. Secret Service.