Federal Reserve inches towards faster payments

America's Federal Reserve Banks are moving ahead with plans to improve the country's payment infrastructure, promising to publish a roadmap in the coming months that could eventually lead to a faster payments system.

The Reserve Banks released a consultation paper in September 2013 soliciting comments on gaps and opportunities in the payment system. By the close of the exercise in December, the Fed had received over 200 responses, with more than half coming from non-banks.

Meanwhile, the central bank has also been carrying out research into three specific areas: faster retail payments and the different approaches that could be taken to this, gaps and opportunities related to security, and the business case for adopting the ISO 20022 international payment standard.

Without giving away details, the Fed say that it will now gather all the research and stakeholder feedback and put together a roadmap for payment system improvements over the next few months.

Narayana Kocherlakota, president, Federal Reserve Bank of Minneapolis, says: "The Federal Reserve remains committed to its mission of payment system integrity, efficiency and accessibility, and we look forward to ongoing collaboration with stakeholders this year and beyond to improve the ability of the US payment system to meet evolving end-user needs for speed, efficiency and security."

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Comments: (5)

A Finextra member 05 September, 2014, 14:09

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0 likes The United States is ready for a change in the payment system. We have a big change that is expected because of the delivery tools versus The way banks process and update the files for this activity. Bankers have to be ready to move information faster, process information faster and be sure to reconcile all of this activity on a faster accurate basis. If you need ay help with this project please call me. This can be accomplished to move into the newer faster world. Roger G Leblond

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Peter Palms - Palms&Company Inc - Kirkland 06 September, 2014, 01:59

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The accepted version of history is that the Federal Reserve was created to stabilize our economy. One of the most widely-used textbooks on this subject says: "It sprang from the panic of 1907, with its alarming epidemic of bank failures: the country was fed up once and for all with the anarchy of unstable private banking." Even the most naive student must sense a grave contradiction between this cherished view and the System's actual performance. Since its inception, it has presided over the crashes of 1921 and 1929; the Great Depression of '29 to '39; recessions in '53, '57, '69, '75, and '81; a stock market "Black Monday" in '87; and a 1000% inflation which has destroyed 90% of the dollar's purchasing power.

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A Finextra member 07 September, 2014, 03:05

1 like Achieving a faster payment system does not mean jeopardizing the banking system. The banking industry will have to create a faster payment system or else other alternatives will be developed and the banking industry will not have to worry about the payment mechanism. The banking industry is having a difficult time admitting they have to change.

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A Finextra member 10 September, 2014, 17:03

0 likes I led part of the UK programme. It was very clear that some banks were brought along kicking and screaming and could only see Faster Payments as an expensive distraction while others recognised the business opportunity. That opportunity in time has lead to PayM (the P2P mobile payments platform in the UK). Now that I work in the P2P international money sector, I see the banks being disenfranchised by more entrepreneurial operations, who are being supported by regulatory regimes that seek to bring in competition to confront the banks

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A Finextra member 10 September, 2014, 17:19

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I would agree that if the Noth American Banking Industry continues to drag their feet that other industries will step in to solve the clearing process. You can only feel sorry for yourself for so long. That time is here. You have to invest the money to stay current not keep adding duct tape.