When customers pay by debit card, it can take one to three days before the payment is processed and cleared. With 36% of Americans planning to use debit cards for the holiday season, according to a TD Bank report, businesses must still wait for the payment to be settled by interbank transfer before they see the money.
According to The Wall Street Journal, that process may change soon. Walmart, Target, the National Retail Federation and other companies from the retail sector have been attempting to push for a real-time settlement system for debit card transactions. The companies were reportedly communicating with the Federal Reserve about this matter.
The Fed began these talks early in October as they sought public comment on possible actions to accelerate payment settlement, and they even explored a real-time settlement system. The real-time system would operate 24/7 and minimize the one-to-three-day window. The comment period is set to close Dec. 14.
"Consumers and businesses increasingly expect to be able to send and immediately receive payments at any time of the day, any day of the year," said Federal Reserve Board Governor Lael Brainard in a statement. "A 24/7 economy with 24/7 real-time payments needs 24/7 real-time settlement. That is where we believe that the Federal Reserve and the private sector together need to make investments for the future."
—Christie Citranglo, editorial associate