In early 2015, the Federal Reserve issued Strategies for Improving the U.S. Payment System (Strategies paper) which outlined the collective thinking of U.S. payment system stakeholders and the Federal Reserve on desired outcomes for improving the U.S. payment system.
The desired outcomes focused on speed, security, efficiency, cross border payments, and industry collaboration.
The Strategies paper called upon payment system stakeholders—including financial institutions, non-bank providers, businesses, retailers, consumer groups, standards bodies, and other organizations involved in making, receiving, and processing payments—to form two task forces: the Faster Payments Task Force and the Secure Payments Task Force. Acting primarily as a catalyst, the Federal Reserve has encouraged and supported payment stakeholders in coming together in a collaborative effort to progress toward payment improvements in a complex economic environment.
The Faster Payments Task Force (‘task force”) was convened by the Federal Reserve in May of 2015. The task force has focused on identifying goals and attributes of effective faster payment systems; proposing solutions and assessing their capability to achieve those goals; and championing the payment industry to take steps toward implementation and adoption of faster payments capabilities.
The U.S. Path to Faster Payments is the culmination of several years of visionary collaboration. Part One, The Faster Payments Task Force Approach, describes the background and process of the task force’s work and its motivation for pursuing faster payments solutions in the context of the current payments landscape. Part Two, A Call to Action, shares the task force’s assessment of proposals for faster payments solutions, and recommends next steps for the industry to realize a payment system in the United States that is faster, ubiquitous, broadly inclusive, highly secure, and efficient.
The task force calls upon all stakeholders to seize this historic opportunity to realize the vision for a payment system in the United States that is faster, ubiquitous, broadly inclusive, safe, highly secure, and efficient by 2020.
The envisioned faster payments system comprises the following characteristics:
The benefits of faster, modernized payments are significant. For consumers, faster transactions support quicker access to funds and the ability to make and receive last-minute payments – a key benefit particularly for those with limited or unpredictable income streams. For business and government end users, improving payment speed provides quicker access to working capital to support greater efficiency in the supply chain and inventory management. By seamlessly integrating data-rich contextual information throughout the entire payment flow – from initiation through reconciliation – business and government end users will realize further efficiencies in cash-flow management and back-office processes. Through faster payments, providers of financial and payments services can better address the needs and expectations of end users in a changing global economy. Also, a system that leverages leading-edge security, technology, and risk-management practices enables faster, more flexible responses to a changing threat environment and engenders trust and confidence in faster payments. Finally, investment in faster payments will speed modernization of supporting legacy payment and accounting systems, which can further enhance security and better support the evolving needs of a digital economy.