For the fourth straight year, the Federal Reserve is lowering prices for electronic payments services, continuing a trend that it estimates will save the banking industry $15.6 million over the next year.
In announcing its 1998 fee schedules, the Fed lowered prices 11 percent (or 5 cents) for Fedwire funds transfers and by an average of 12.5 percent (or 0.1 cents) for ACH transactions. In general, the Fed is lowering prices for electronic payments and slightly raising prices for processing paper checks. The prices take effect Jan. 2, 1998.
Since 1995, the Fed has progressively lowered prices for electronic transactions, consistent with its long-term strategy to promote this method of payment. The Fed estimates that through its actions, ACH and Fedwire customers will save $41.8 million in fees by year-end 1998.
Recent ACH price reductions are particularly significant, said Paul M. Connolly, product director for the Federal Reserve's retail payments office and first vice president of the Federal Reserve Bank of Boston.
"We have cut the price for some ACH items by as much as 73 percent in the last two years," Connolly said. "We lag behind most industrialized nations in moving toward electronic retail payments. But, by reducing prices while still improving the quality of service to our customers, the Reserve Banks hope to encourage greater use of ACH for such payments."
In November, the St. Louis Fed sent out its 1998 price books. To request additional copies, please contact your Federal Reserve account executive. In addition, the St. Louis Fed's prices are listed on the Bank's home page (www.stlouisfed.org).