The US Federal Reserve Board is pushing ahead with plans to further the introduction of faster retail payments as part of a broad effort to modernise the country's payments infrastructure.
One must hope that this includes support for downstream automation - ie electronic invoicing as
1. automated payment initatior,
2. real time payments,
3. data extraction from e-invoices feeding automated sales tax reporting and payments,
4. e-invoice data feeding account statements to create automated accounting for SMEs (and automated cash flow estimates).
Not sure how this tallies with the Nov. 2013 veto of such a faster payments system by American banks:
In any case, isn't "pushes ahead" an over optimistic assessment, considering the Fed seemingly has a 10 year horizon?
Pushing ahead - seems like just a bit of an overstatement. Granted it's 'planning'. Perhaps the Fed will be able to get this done faster than the EPC implemented SEPA
See the big picture! Now is the time for automating - especially downstream for SMEs.
@MarkM: Interesting that you've raised the comparison with EPC / SEPA. The way EPC can mandate SEPA for all banks in EU, does FED have similar power over the American banking industry? From what I know, a move like this requires a GO verdict by a supermajority
of NACHA members. Given that they just took a NO GO decision a couple of months ago, what really are the options available to the FED?
It's a healthy debate and modernisation is definitely overdue. Compared to countries like the UK that have successfully implemented Faster Payments, the business case will be further muddied by the impact on the high number of connected financial institutions
(1000s). Whether a revamped ACH or a brand new network, I can't see the industry voluntarily implementing Faster Payments soon. Like Check21, I believe (regrettably) that this will only come from regulation.
@ColinK: Mint, Geezeo and other PFM players have managed to provide exemplary account aggregation across 7K+ banks in USA. You've hit the nail on the head by pointing to the need for regulation. However, I don't find this regrettable: Regulatory intervention
has proven to be the most powerful driver of action by banks worldwide when it comes to measures that undermine their revenues and profits. OFT mandated FPS in UK. A subsidiary of the central bank even runs the FPS-equivalent scheme in India.
Payment automation cannot really be achieved without structured e-invoices. Not to talk about automated accounting, VAT and Sales Tax reporting. All standards are ready in ISO20022..
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