By Eric A. Love
The Federal Reserve Board (FRB) has released a paper entitled “Strategies for Improving the U.S. Payment System: Next Steps in the Payments Improvement Journey” (the Strategies Paper). The Strategies Paper builds upon the FRB’s “first steps” for enhancing the U.S. payment system (which were described in a 2015 FRB paper) and details the next phase of this work. It includes an assessment of ambitious proposals made by the Faster Payments Task Force and the Secure Payments Task Force.
The Strategies Paper outlines five overarching “refreshed strategies” and nine corresponding “new tactics,” all of which represent the next steps toward achieving the FRB’s goals. Notable elements of these strategies and tactics are summarized below.
- Support the payment industry’s efforts to implement “safe, ubiquitous, [and] faster payments” by seeking to achieve such outcomes as FRB settlement services that “address the future needs of a ubiquitous real-time payments environment.”
- Lower the risk of fraud while furthering payment system security and resilience by developing ways to reduce the “cost and prevalence of specific payment security vulnerabilities.”
- Accomplish more efficiency for end-to-end electronic processing of U.S. payments by supporting industry efforts to adopt standards in this area.
- Improve the “timeliness, cost effectiveness and convenience of cross-border payments” by heightening stakeholder engagement on the related opportunities and challenges.
- Engage with various stakeholders on proposals that would enhance the payment system by fostering awareness and promoting adoption of “identified improvements.”
Additionally, the Strategies Paper indicates that the FRB will continue to furnish updates on its progress, as well as solicit feedback and make adjustments to its approaches as needed. We will monitor and report on new developments as they occur.