to carry blood through our body and keep us healthy, the United States has a

system to keep money moving

and keep the economy healthy. It's called the payments system.

It's important for Americans to feel confident about the payments system.

That's one reason the Federal Reserve was charged with making sure that our

monetary circulation system

stays in good shape. How does the Fed do that? We maintain accounts,

process checks, and electronically transfer funds.

The Fed also distributes and receives currency and coin, and keeps currency in

good condition and

in circulation to make sure that we can keep up with the public demand.

Every day, millions of transactions, valued in the trillions of dollars

are handled between sellers and purchasers of goods like umbrellas,

services like plumbing, or financial assets like stocks and bonds.

The Fed has been working hard for the past 100 years

to keep this monetary circulation system healthy. To do this,

we watch over different kinds of payments: wholesale payments

that transfer large sums of money between banks and businesses,

Treasury payments that include government payments like social security

and U.S. savings bonds, and retail payments that transfer smaller value funds

between consumers and businesses. As consumers, we're most interested in retail payments,

so let's focus on those. Retail payments can cover anything from making a car

insurance payment that's

automatically debited from your account to paying your bills online

to using your debit card or credit card to purchase

ice cream or a new dress. The Fed's National Retail Payments Office,

called the RPO, is headquartered in Atlanta. The RPO

deals with most of the nation's spending money that's held in checking accounts.

Throughout the 20th century, paper checks were one of the most common ways

for people to make

retail payments. In the year 2000, the Federal Reserve System

had 45 check processing centers around the country.

Planes had to transport those checks every night to get them to their correct

locations for processing. All that changed when the Fed led the charge to

pass the Check 21 Act,

a 21st-century law allowing a picture of a paper check

to act as legal documentation showing that the check had actually been paid.

Check 21 drastically reduced the need for paper checks;

so much so that the only one of those 45 Fed check processing centers

exist today. The amazing thing? In a little more than a decade,

this monumental transformation of the retail payments system

happened with virtually no disruption to the U.S. payments system,

its customers, or its businesses. There have been many changes to the payments

system

over the years, and the Fed has kept things pumping along smoothly,

but the future brings lots of new challenges. Today,

technology is changing quickly; online payments are becoming the standard.

We need to make sure they stay secure and efficient. That's why the Atlanta Fed

started an internal think tank called

the Retail Payments Risk Forum, or RPRF,

to convene a range of experts to think about security issues,

law enforcement, the banking community, payment providers like credit card

companies,

and economists. Together these partners learn all they can about the demands of

online security.

And while these experts don't have all the answers, they anticipate what kind of

challenges

are coming up next, both here in the United States and across the globe.

By keeping an eye on what's going on worldwide with payment security,

by anticipating what changes technology will bring, and by taking care of the

largest payments system in the world, the Federal Reserve

will continue to help keep America's economy going strong. To learn more about

this

and other topics, visit our website at frbatlanta.org.