Dive Brief:

• The Federal Reserve plans to make the Fedwire Funds Service and the National Settlement Service payments systems available for operations on Sundays and some holidays, but not anytime soon. The central bank expects the expanded days to take effect “in several years,” 2028 at the earliest, according to a press release it issued last week.
• When the change occurs, the two big-value Fed payments services will be available six days per week, from Sunday through Friday, plus weekday holidays, as opposed to Monday through Friday, the Fed said.
• “Moving forward, the Board will monitor demand for a potential further expansion of operating hours to seven days per week,” the Fed said in its Oct. 9 notice.

Dive Insight:

The Fedwire Funds Service and the National Settlement Service are two key U.S. payments systems made available through the central bank. 

The Fedwire Funds channel alone handles some $4.7 trillion in worldwide commerce every day. It’s a wholesale payments service used by financial institutions to send and receive electronic transfers of up to $10 million. The National Settlement Service provides clearing services for participants in private-sector clearinghouses.

Even as the days of operation will be expanded, per the Fed’s notice, the hours of operation will remain the same. Fedwire Funds will continue to be open 22 hours per day, and the NSS for 21.5 hours per day, closing a half-hour earlier.

For years, the Federal Reserve has contemplated expanding the payment services’ days and/or hours of operations, even considering seven days a week and 24 hours per day in 2019. 

Last year, the central bank asked for public input on a proposal to have the payments services “operate every day of the year,” extending the comment period into last September. 

In that initial May proposal, mulling the idea of operating seven days per week, the Fed said at that time that it might institute the change by 2027.

With worldwide advances in financial technology and the mushrooming of digital payments, a bipartisan group of congressional members last year urged the central bank to expand the payments services even before 2027. In a July 2024 letter to Federal Reserve Board Chairman Jerome Powell, they nudged the central banker to take action sooner.

“We believe it is important for the Federal Reserve to prioritize its work and act swiftly to expand the operating days and hours of the NSS and Fedwire,” the Congress members said in the letter. 

The Congress members also asked how the Fed is viewing the logical next step, extending U.S. payments services to 24 hours per day.

One of the specific benefits to consumers and employees of the expanded payments operation would be the ability to send direct deposits to workers on additional days, the letter said. “It would also allow Americans to transfer money between accounts at night and on weekends and holidays,” the letter said. 

Nonetheless, in comments to the Fed some smaller banks and credit unions have complained about the increased burden on their businesses of expanding the hours of operation. They said it would likely increase their costs for workers and technology upgrades.

In its latest announcement, the Fed said it won’t advance a move toward expansion to service seven days per week without another round of public input.“If the Board decides in the future to propose such an expansion, it will seek public comment on a new proposal,” the release last week said.

The Fed’s instant payments system, called FedNow, as well as its ACH system and the Fedwire Securities Service will not be affected by the upcoming change in the days of operation, the notice said.