Weekend settlement of financial transactions would provide small benefits to US retailers and consumers, and little, if any, benefit to the economy as a whole, according to this General Accounting Office report to the House of Representatives.
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 of their weekly sales on weekends — when depository and other financial institutions generally are closed — receiving cash, cheques, and electronic payments that are not credited to their accounts until at least the next business day. Retail representatives have suggested that extending settlement services over the weekend could benefit retailers, the payment system, and the economy as a whole.
The study identifies the potential benefits of weekend settlement for retailers, consumers, and the economy as a whole; potential costs and operational issues for payment service providers as well as lower-cost alternatives to weekend settlement; and legal considerations related to instituting weekend settlement.
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