In April, we discussed the real-time payments revolution coming to the United States. With consumer and market pressures growing, that story explained the necessity of the change. So where does the nation stand and what is it doing now to make real-time payments a reality?
What has been completed to improve real-time payments?
The United States is making progress in rolling out real-time payments as the Federal Reserve Board takes lead in changing the industry. Its newly created Faster Payments Task Force is tasked with providing solutions to the currently lacking real-time payments options. The purpose of this group is to identify and evaluate alternative approaches for implementing safe, ubiquitous and faster payments capabilities.
The Faster Payments Task Force published its “Strategies for Improving the U.S. Payment Systems,” which outlined five desired outcomes for U.S. payment improvements:
- Creating a safe and faster electronic solution for payments
- Ensuring U.S. payment system security remains very strong
- Reducing cost of payment transactions to enable innovative payment services
- Providing better choices for U.S. consumers to send and receive cross-border payments
- Identifying and implementing payment system improvements
Participants in the Faster Payments Task Force represent a broad spectrum of payment system shareholders, including FIS’ own Peter Gordon. Their charge is to develop views on relevant and upcoming payment trends, advancements, issues and priorities in order to lead our country to a safe and faster payment network. The Task Force will also acknowledge and assess other options for faster payment capabilities, such as:
- Security and operational changes that are needed for participants to interface with the infrastructure
- An estimated cost and time to implement
- A description of the core infrastructure, including access model
- Additional factors deemed important in determining the effectiveness of an approach.
What’s next for the payments task force?
Of the 130 members on The Federal Payments Task force, a select 19 were chosen to make up the Steering Committee, including Gordon. This committee is responsible for gathering intelligence from Task Force members to achieve payment system improvements to take the U.S. payment systems from where it is now to where it needs to be to accept real-time payments. Gordon expects the faster payments system in the U.S. to be designed to be “future proof,” so that it will be sustainable for the next 40 years. “The Fed is helping the market with creating [the faster payments system] rather than regulating it,” he said.
The ultimate goal is to bring the United States in line with much of the rest of the world and return it to a leading place in the payments landscape. Through their collaboration, members of the Fed’s task force will determine how to fill the gaps between end-user expectations and provided systems as well as find ways to protect consumer data and information.
After those initiatives are assessed will it bring the U.S. up to speed with other countries that may be advancing quicker when it comes to payment networks? What’s your prediction?