The U.S. payment system is at a critical point in its evolution. Improvements in computing speed and information processing allow payments to take place faster than ever before. Although innovation is taking place, faster payments solutions are being developed in a fragmented way without collaboration across the payment industry or broad adoption across the market as a whole. Many countries have already upgraded their payment systems to take advantage of improvements in technology, allowing payments to be sent within seconds between payers and recipients. Given the breadth and complexity of the U.S. market—with over 10,000 depository institutions and hundreds of non-bank payment providers—it is more challenging to implement improvements to the payments infrastructures in a coordinated way.
The Faster Payments Task Force came together to build on the momentum and innovation taking place in the industry and to jointly identify the challenges that stand in the way of achieving safe, ubiquitous faster payments solutions.
The task force believes that now is the time for the payment industry to implement faster payments solutions for several reasons. Depository institutions and non-bank providers are already developing faster payments solutions, but these solutions cannot easily connect all providers and end users in the market. Businesses and consumers have expressed a demand for faster payments and could benefit from the prompt visibility of payment status and faster availability of good funds.
As new faster payments solutions are developed or integrated with existing systems, safety and security features can be built from the ground up based on today’s knowledge of vulnerabilities in payment systems as well as any anticipated risks specific to payment speed and finality. If proper controls are in place, such as those defined in the Effectiveness Criteria, faster payments solutions can improve payment safety and security and reduce the risk for various parties involved in a transaction.
In addition to meeting these immediate end-user needs, safe, ubiquitous, faster payments solutions can promote greater innovation in the future. Recent advances in computing power and telecommunications have led to many changes in the financial industry, and faster payments will provide greater flexibility to keep pace with these innovations.