A Federal Reserve task force Friday called on the U.S. financial system to make faster payment solutions available to every consumer and business by 2020.
The Federal Reserve Faster Payments Task Force issued a final report that recommended a framework for rules, standards and systems, and a streamlined, all-encompassing payment system that keeps pace with technological development.
The report recommends that the Fed work with regulators to evaluate how laws will apply to emerging payment technologies, implement a faster payment settlement service and play an operational role in supporting the process in its entirety.
Additionally, it recommends increased awareness and security for end users and service providers, as well as ongoing research on functionality and emerging technologies in order to establish faster payments framework, rules and standards throughout the U.S. financial system.
Following the final report, an interim working group will facilitate collaboration and implementation of the task force’s recommendations.
Steve Kenneally, a task force member and vice president of the American Banking Association, was enthusiastic that the task force’s recommendations will lead to a more robust and efficient payment system.
“Economic freedom can be messy sometimes but I think you’ll see that this sort of free-market system is going to produce the best product in the end for the consumer, as opposed to a top-down mandate,” Kenneally said.
The key next phase will be to guarantee compatibility across systems as they are developed and enhanced, Kenneally said, stressing the goal of making substantial progress before the 2020 goal.
“All end users will enjoy a safer, faster and more transparent payment system when these recommendations are implemented,” said Christina Tetreault, a task force member and a staff attorney at Consumers Union, during a panel discussion following the report’s release.
Connie Theien, senior vice president of industry relations at the Federal Reserve, said the Fed will now issue a plan of action after reviewing the task force’s recommendations.
“This is a once in a generation opportunity to build an entirely new payment system and do it deliberately,” said Steve Ledford, a task force member, senior vice president of product and strategic at The Clearing House, a banking institution and payment clearing company.
The report is the culmination of two years of work by more than 300 task force members, representing institutions across the financial system. Creation of the task force followed the Fed’s 2015 assessment that the U.S. payment system has not kept up with high tech advances.