	Background

Retail payments are relatively high-volume, low-value payments. Currently, checks are settled on business days, which do not include weekends, resulting in a delay in the settlement of those checks deposited during the latter part of the week. Final settlement of ACH transfers processed by the Federal Reserve occurs through debits and credits to the accounts of depository institutions on the books of the Federal Reserve. There is no float for cash. Settlement of Financial Transactions on Weekends Would Provide Small Benefits

Weekend settlement of financial transactions would provide small benefits for retailers and consumers, and little, if any, benefit for the economy as a whole. Weekend Settlement Would Require Payment Service Providers to Open on Weekends and Could Significantly Increase Costs

Because payment system actors and processes are interdependent, weekend settlement would require payment service providers that clear and settle retail and wholesale payments to open on weekends, resulting in increased capital and operational costs. Because they have not been preempted, state closure laws applicable to state banks could interfere with the development of a uniform national weekend settlements system.
What GAO Found

The U.S. payment system is a large and complex system of people, institutions, rules, and technologies that transfer monetary value and related information. The nation's payment system transfers an estimated $3 trillion dollars each day--nearly one third of the U.S. gross domestic product. Currently, settlement--the final step in the transfer of ownership involving the physical exchange of payment or securities--occurs only during the business week. Some retailers, however, generate approximately half their weekly sales on weekends--when depository and other financial institutions generally are closed--receiving cash, checks, and electronic payments that are not credited to their accounts until at least the next business day. Weekend settlement of financial transactions would provide small benefits to retailers and consumers, and little, if any, benefit to the economy as a whole. Because payment system actors and processes are interdependent, implementing weekend settlement would require payment service providers that clear and settle retail and wholesale payments to open on weekends, resulting in significantly increased operational costs. Although there are no direct federal prohibitions against weekend settlement, state laws that are not preempted by federal laws or regulations providing for weekend settlement could interfere with development of a uniform, national 7 day settlement system.