The battle is dividing financial firms and policy makers at a time when payments are becoming a potential flashpoint between banking and big tech. Facebook Inc. has announced plans to launch a cryptocurrency-based payments system on the back of its social network, while Chinese giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have developed digital payments systems that dominate in that country.
The latest skirmish revolves around plans by the Federal Reserve, announced last year, to look at ways to update its payments system to process transactions almost instantly. The Fed is expected to announce whether it will build a new network as early as this week. Currently, the government’s system doesn’t operate on weekends and can take days to process certain transactions such as bill payments and direct deposits.
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