Due to changing consumer behavior and advances in mobile communications, payments analysts expect real-time payments to become a reality in 2017. The Faster Payments Task Force, led by the Federal Reserve in collaboration with private sector businesses, financial institutions and government agencies, is working toward that end. A progress report published Jan. 26, 2017, provides insights on the group's progress standardizing and implementing real-time payments and automated clearing house (ACH) schemes.
Esther George, President and Chief Executive Officer of the Federal Reserve Bank of Kansas City, has led the payment system improvement initiatives on behalf of the Federal Reserve. "The Fed's priority is to advance improvements that are in the public interest so that consumers and businesses alike have access to efficient, real-time and highly secure payments in the United States," she said. "Through a number of collaborative efforts, the industry is making real progress on all fronts, and we're expecting to achieve a number of significant milestones in 2017."
The faster payments initiative originated in 2015, when the Fed published Strategies for Improving the U.S. Payment System, which detailed a multiyear plan focused on improving speed and operational efficiencies across the financial services ecosystem. Following are five underlying strategies designed to move the initiative forward:
The Faster Payments Task Force plans to continue to identify a path forward for improving payment identity management practices and standardized definitions for fraud and risk data. Additional details, including a framework for risk assessment and protection of sensitive data, will be shared in Part Two of its progress report.
"Protecting payment systems and transactions has become a critical function for central banks, financial institutions and technology providers as sophisticated cyber threats have increased in size and scale throughout the world," said Jerome H. Powell, Federal Reserve Board Governor and co-chair of the Faster Payments Task Force oversight committee.
The Federal Reserve invites payments industry stakeholders to join its extended payments improvement community. "Momentum across the payments industry continues to be strong, resulting in substantial progress on each of the identified strategies for improving the U.S. payment system," report authors wrote. "To help ensure that you receive updates and information as it becomes available, join the FedPayments Improvement Community."
The report is available at https://fedpaymentsimprovement.org/wp-content/uploads/progress-report-january-17.pdf.
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