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The Dialogue Driving the Faster Payments Interoperability Question

Dialogue is an integral part of our society. Real, meaningful dialogue can be the driver behind collaborative action that can bring out change, understanding, cooperation, confidence, and more. And in today’s environment with now-daily conversations about issues that are core to our humanity – systemic racism and oppression, health and safety concerns around COVID-19, and how we as a nation respond. Rather than retreating to various corners – the need for dialogue has never been more important.

The advancement of faster payments is in furtherance of another discussion. In terms of advancing financial inclusion and transparency, key issues in the lives of many, the ability to enhance the predictability and transparency of payments for the benefit of all stakeholders is increasingly important. Dialogue has and always will be an integral part of advancing the faster payments ecosystem. Dialogue is what jumpstarted our efforts here in the United States, with the Federal Reserve’s Strategies for Improving the U.S. Payment System and resulting Faster Payments Task Force, and it will be what allows us to overcome many of the challenges, such as interoperability, that will enable us to finally cross the finish line.

Dialogue is the driver behind sound decision-making. Dialogue allows for education, mutual insight, new understanding, and common purpose. It is the collaborative action from which something new and representative can emerge that wouldn’t have been possible by individuals acting in isolation. That’s why representative dialogue is a foundational component of the Faster Payments Council (FPC) and the base upon which we address faster payments challenges. The dialogue within our diverse membership base of financial institutions, business end users, consumer organizations, network operators, technology providers, and more is what is helping to drive the agenda around topics like interoperability.

According to research, the United States will transact $905 billion in faster payments this year, through a mix of faster payments solutions ranging from products such as Zelle to The Clearing House’s RTP® Network, with more planned to be available in the future, such as the Federal Reserve’s FedNow℠. While choice is a good thing, this assortment of options is what continues to fuel the interoperability questions and challenge.

The FPC and its members recognize this, and we’re putting a stake in the ground. Interoperability is a challenge, but one we are meeting head on through necessary dialogue. Recently, we released a first-of its-kind white paper on faster payments interoperability. The paper, which does not prescribe how we solve the interoperability challenge, instead helps to build a shared understanding of the topic. 

Interoperability is complex. There are various models that can be used to achieve it, but there are also settlement considerations, and overlay services that can impact interoperability as well. Generally speaking, payment system interoperability can occur in three different ways: at the point of origination, at the network level, or with an intermediary. The complexity of the U.S. payments infrastructure can be an advantage, as we are well-positioned to implement various approaches to interoperability to serve the needs of all participants. 

Defining the different ways to deliver payments interoperability and exploring business considerations and underlying technical complexity is a necessary first step in creating a thoughtful dialogue to move the issue forward. In a market like the United States when there are many diverse faster payments networks and overlay services, there will more than likely be a mix of approaches necessary to achieve interoperability. But determining the ultimate mix - the successful combination of approaches - that will be accomplished through dialogue.

To ensure that the industry is exploring the topic with a common baseline of understanding, the FPC believes it is critical to compare the different models and considerations that must be addressed. Interoperability might be solved with one particular model or it might end up being a mix of models that support interoperability in a faster payments environment. 

The importance of dialogue in our industry and at the FPC can’t be overstated. When dialogue is done well, with open, transparent, and representative discussion, the benefits can be extraordinary. Long-standing stereotypes can be dissolved, mistrust overcome, confidence built, and visions and outcomes shaped. At the FPC, we are initiating the dialogue around interoperability. While only time will tell how it is achieved, the discussions that will get us there are happening now, and within the FPC.  


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Reed Luhtanen

Reed Luhtanen

Executive Director

U.S. Faster Payments Council

Member since

10 Aug 2020



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