Hundreds of industry players make up a task force brought together by the Federal Reserve has set out 10 recommendations to make payments in the US faster and more accessible by 2020.
The Fed has spent several years inching America along a journey towards a faster payments system fit for the 21st century. In 2015, it put together a Faster Payments task force of more than 300 industry stakeholders, charging it with coming up with recommendations on the best way to achieve this.
In a significant milestone, the task force has now delivered its final report, offering up a plan it claims can deliver a safe, ubiquitous, faster payments system in the United States within just three years.
The report offers up 10 recommendations, split into three areas: governance and regulation; infrastructure; and sustainability and evolution.
On governance, the report argues for:
- Establishing a formal governance framework;
- Establishing rules, standards, and a baseline set of requirements for the faster payments system that would enable payments to cross solutions securely and reliably, and ensure end users have predictability and transparency in certain key features pertaining to timing, fees, error resolution and liability; and
- Evaluating laws and regulations affecting payments and payment service providers to ensure that they are suited to the unique characteristics of real-time payments.
On infrastructure, the recommendations are:
- Developing a design for faster payments solutions to interoperate via directory services;
- Requesting the Federal Reserve develop a 24x7x365 settlement service; and
- Requesting the Federal Reserve explore and assess other operational role(s) the Federal Reserve might need to play to support ubiquity, competition, and equitable access to faster payments.
When it comes to sustainability and evolution, the report suggest:
- Developing methods for fraud detection, reporting, and information sharing to continuously advance the safety and security of the faster payments system;
- Creating advocacy and education programs to support broad adoption;
- Researching cross-border payments to identify and address gaps and barriers to enabling faster payments for this use case; and
- Continuing research on emerging technologies to deepen understanding of the risks they may pose as well as the benefits they may offer, including the potential for serving underserved end users and use cases.
The report ends with a call to action for the industry to “come together to make this faster payments vision a reality”.