Recommendation 1: Establish a faster payments governance framework.
The Faster Payments Task Force calls for the development of a faster payments governance framework, inclusive of all stakeholders, to make decisions to facilitate cross-solution payments and to achieve broad adoption; safety, integrity, and trust; and interoperability by 2020.
The task force believes that an industry-led framework for cross-solution collaboration and decision making is needed to support achievement of the faster payments system goals by 2020. The task force recommends that this governance framework enable: establishment of goals and milestones, progress assessments, and identification of gaps and recommendations for appropriate action. Specifically, a body within the governance framework should facilitate successful pursuit of the task force goal of ubiquitous receipt – where all payment service providers are capable of receiving faster payments and of making those funds available to their end-user customers in real time – by 2020. For example, a body might recommend processing elements or development of infrastructure that would support ubiquitous receipt if it determines that carrying out the other recommendations alone is not sufficient for the industry to reach the ubiquitous receipt goal by 2020.
The task force believes the authority and legitimacy of a voluntary, industry-led governance framework rests on broad participation and input from diverse stakeholders in the faster payments ecosystem, and inclusive and transparent decision making that supports the goals of broad adoption; security, integrity, and trust; and interoperability. To this end, it recommends that the governance framework be established and carry out its responsibilities in a way that embodies the attributes outlined in the task force’s Effectiveness Criteria for “Effective governance” (G.1) and “Inclusive governance” (G.2). For example, the governance framework should include consideration of the public interest, provide for input and influence by all stakeholders, and have fair representation of stakeholders’ interests and risks.
Transparency and inclusiveness
To be transparent and inclusive, the task force recommends a body within this framework that represents the interests of all segments of the faster payments ecosystem and the broader public. Any decisions made by this body should be publicly available, including initial deliverables of a charter, constitution and membership requirements, and regular assessments of industry progress toward fulfilling the task force vision.
Steps to advance this recommendation
To advance this recommendation, the task force has stood up a short-term Interim Collaboration Work Group (ICWG) that has two broad objectives: 1) develop an initial faster payments governance framework that incorporates public commentary; and 2) establish the framework and membership. In developing the framework, the ICWG will define and implement: the initial charter of the governance framework; a representative and inclusive structure for membership, leadership, and voting rights; and initial funding and administrative support. The responsibilities and structures of any initial body(ies) and/or working committees within the governance framework will also be defined.
The membership of the ICWG was determined by election within the task force and includes qualified representatives from each of the defined task force segments. The composition of the ICWG is outlined below:
- Large Financial Institutions [2 members]
- Medium Financial Institutions [2 members]
- Small Financial Institutions [2 members]
- Nonbank Providers [6 members]
- Business End Users [2 members]
- Consumer Interest Organizations [2 members]
- Government End Users [up to 2 members]
- Other (includes representatives from industry organizations, regulators, rules and standards organizations, consultants, and academic institutions) [6 members]
- Federal Reserve, ICWG chair [1 member, non-voting]
In addition, under its charter, the ICWG may appoint additional members, including from outside the task force, as necessary to ensure needed expertise. A current roster of ICWG members is available on FedPaymentsImprovement.org (Off-site Link).
When this work is completed, and the governance framework and membership are established, the ICWG will stand down and cease operation.
Building industry support
The faster payments ecosystem will be successful only if the industry participates, and momentum and engagement continues into the future. The task force invites all payments stakeholders to participate in and support the governance framework. The benefits of doing so include being part of a faster payments network that ensures: a) expanded reach of any given solution through interoperability with other faster payments solutions, and b) baseline requirements (which helps encourage trust in and adoption of faster payments).
An ICWG will drive the development of a governance framework that is representative and inclusive of all payment stakeholders. The recommendations from the ICWG will be published for payment stakeholder comment upon completion of its work.
The task force recommends the ICWG develop its initial recommendations by year-end 2017. The ICWG will disband upon establishment of the governance framework and its membership.