87 BANKING PERSPECTIVES QUARTER 4 2018 BY BARAK J . SANFORD AND DANIEL BUFITHIS-HURIE, PROMONTORY F INANCIAL GROUP, AN IBM COMPANY N NON-BANK PAYMENT FIRMS play an important and highly visible role in the rapidly changing modern payment ecosystem. However, almost without exception, these firms are unable to participate directly in U.S. settlement systems. Non-banks are not eligible to open master accounts at Federal Reserve Banks, and they are similarly excluded from direct membership in the major private payment systems. As a result, such firms, like other non-bank entities, must rely on relationships with depository institutions to settle payment transactions on behalf of their customers. Over the past several years, growing numbers of non- bank firms have been seeking to shed this dependence and gain direct access to U.S. settlement systems. Such firms are particularly interested in opening Federal Reserve master accounts, with some employing increasingly creative means to gain access to such accounts.