On September 6, the Federal Reserve published “Strategies for Improving the U.S. Payment System: Federal Reserve Next Steps in the Payments Improvement Journey,” a paper outlining the updated tactics the Federal Reserve intends to pursue to help improve the U.S. payment system. The paper follows up on the January 2015 paper entitled “Strategies for Improving the U.S. Payment System,” which highlighted five specific areas for collaboration: speed, security, efficiency, international payments, and collaboration. While these areas may prove challenging, the Federal Reserve has held onto its initial goal of finding solutions by 2020.
“Our 2015 paper laid out ambitious goals for the U.S. payment system that will require the sustained commitment of the Federal Reserve and the industry to achieve,” said Esther George, president and chief executive officer of the Federal Reserve Bank of Kansas City and executive sponsor of the payments improvement initiative. “Thanks to the collective efforts of hundreds of payment system stakeholders during the past two years, we’ve made real progress. Through the strategies and tactics outlined in this next steps plan, the Federal Reserve will support continued industry momentum toward safe, ubiquitous, faster payments for our country.”
“Next Steps” describes the Federal Reserve’s strategies and tactics to achieve the goals originally set forth in the 2015 paper in specific ways, including:
- Payment tactics to facilitate industry development of a faster payments ecosystem, as described by the Faster Payments Task Force in its July 21, 2017 final report;
- Pursuing settlement services that address the future needs of a ubiquitous real-time retail payments environment, and, if needed, Federal Reserve engagement as a service provider;
- Reducing fraud and advancing the safety, security, and resiliency of the payment system by expanding beyond the Secure Payments Task Force to include analysis of payment security vulnerabilities, potential mitigation approaches, and incentives that hinder progress; and
- Efforts to enhance the efficiency of both domestic and international payments by working with stakeholders to understand barriers to improvement and seeking adoption of standards and other solutions to address those barriers.
The paper ends with a call for payment systems stakeholders “to engage collaboratively in these next steps to achieve a faster, ubiquitous, safer, more efficient payment system for the United States.”
A copy of the paper is available here.