While a number of other large payment markets have made significant progress towards payment modernisation, the Federal Reserve is still at nascent stage of developing the real-time payments in the US market.
Currently in the consultation process, its focus is on end-to-end enhancements in the speed, efficiency and security of the country’s payment environment.
At the end of January 2017, The Federal Reserve System issued The US path to faster payments. Final Report Part One: The Faster Payments Task Force Approach, a 62-page report that aims to address key challenges of the existing system and proposes solutions for implementing faster payments capabilities while ensuring future development of the US payment market. In order to achieve these objectives, the Faster Payments Task Force establishes a decision making framework based on 36 effectiveness criteria across six categories that would be used to analyse proposals: ubiquity, efficiency, safety and security, speed, legal, and governance.
While current payment practices have evolved in a complex economic and financial environment, the faster payments effectiveness criteria are designed to satisfy a wider range of end-user needs, responding better to ever-changing expectations of consumers and businesses for speed and efficiency through real-time payments.
As the second part of the final report (expected to be launched mid-2017) will provide details of the solutions that have been evaluated against the effectiveness criteria, the task force will analyse the challenges and opportunities of implementing these solutions in the market. Based on this analysis, the task force will offer recommendations and future directions for the industry stakeholders.
While the faster payments report is a justifiable answer to the evolving consumer requirements in the US payments environment, its success will mainly depend on the manner in which the task force identifies and mitigates risks that may impede its implementation, whether customer-related or from within the industry, as well as its ability to harmonise different needs of payment users in the largest and one of the most complex financial services environment in the world.