Legislation would help fintechs keep pace

A bipartisan bill was introduced this week in the U.S. House of Representatives that would provide nonbank payments providers with direct access to payment rails operated by the Federal Reserve.

The Payments Access and Consumer Efficiency (PACE) Act, sponsored by Representatives Young Kim, R-Calif., and Sam Liccardo, D-Calif, calls for streamlined federal registration and supervision by the Office of the Comptroller of the Currency. Participating companies would be required to maintain one-to-one reserves, implement risk management protocols, establish record-keeping systems and guarantee consumer protections.

The bill, introduced on April 21, 2026, seeks to eliminate delays inherent in person-to-person payment networks operated by fintechs like PayPal and Block. While these transactions appear to users as real-time, the reality is that on the backend it often takes days for the payments to move through multiple entities for funds to be settled between sending and receiving financial institutions.

That's because, as it stands now, only federally insured FIs have direct access to Fed payment rails, notably the ACH and FedNow.

The Fed said it is open to granting access to nonbanks and issued requests for public input on the change. On April 8, it proposed allowing U.S. banks and credit unions to use nonbank intermediators to transfer funds through FedNow, the Fed's real-time payments network. At that time, the Fed stated in a press release the regulatory change would better facilitate cross-border payments.

Speeding payments, reducing costs

Kim and Liccardo said in a press release the PACE Act would:

• Streamline federal registration,
• Impose strong consumer protections,
• Provide robust oversight and enforcement, and
• Provide consumer-first protections in the event a nonbank payment service goes belly up.

"Whether it's splitting a bill, paying rent, or waiting on a paycheck to clear, Americans are often stuck dealing with delays and increased fees due to outdated payment infrastructure," said Rep. Kim. "Hardworking Americans shouldn't have to wait days to access their own money or pay extra just to move it." The PACE Act, Kim added, "modernizes our system to deliver faster payments, lower costs, and helps families and small businesses keep more of their hard-earned money."

"We can reduce the burden of bank fees borne by too many American families by enabling broader access to innovative payment systems that deliver cheaper, faster, more reliable service," said Rep. Liccardo.

Fintechs favor

The legislation has been endorsed by numerous fintech trade associations, including the Financial Technology Association, the Blockchain Association, the Digital Chamber, the Crypto Council for Innovation, and the MENA Fintech Association.

"Allowing regulated payment firms access to federal payment rails will enable faster transactions, lower costs, and more seamless experiences on par with other leading economies," said Penny Lee, president and CEO of the Financial Technology Association.

"For too long, digital asset payment companies have been locked out of the same financial infrastructure that their competitors have access to," said Summer Mersinger, CEO of the Blockchain Association. "The PACE Act allows qualified nonbank providers to obtain direct access to Federal Reserve payment rails, enabling faster, less expensive, and more competitive payment services for American consumers and businesses."

MENA, which represents fintechs in the Middle East and North Africa, said the bill would make it easier for its members to transact with U.S. FIs without needing to route payments through correspondent banks.

"The legislation would eliminate the competitive disadvantage MENA fintechs face when routing transactions through correspondent banking layers, potentially reducing cross-border transaction costs by removing intermediary fees," MENA said in a statement.

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