Source: Faster Payments Council
The U.S. Faster Payments Council (FPC), in partnership with Glenbrook Partners, today released the research report, Why Interoperability is Important to Faster Payments.
The report is the latest part of a three-year, multifaceted industry study consisting of quantitative and qualitative research, launched by the FPC and Glenbrook in 2019.
Published the last two years, the Faster Payments Barometer, an online survey of industry professionals, offered insights from businesses, financial institutions (FIs), consumer organizations, and payment providers. Results from both annual surveys indicated that industry stakeholders from across the value chain overwhelmingly believe interoperability is important for broader adoption of faster payments.
“Interoperability has been a recurring theme across the FPC’s work efforts and a hot topic within the industry at large in recent years," said FPC Executive Director Reed Luhtanen. “Both the 2019 and 2020 Faster Payments Barometer studies showed more than 70 percent of stakeholders agree that faster payments system interoperability is important. As a result, we decided to focus our latest qualitative research with Glenbrook on ‘why’ interoperability is important to end users and providers alike, in order to identity the best path forward to ubiquitous faster payments.”
Available in the FPC’s Faster Payments Knowledge Center, the new research report addresses three key questions posed to interviewees:
How does the industry define interoperability?
What are some of the attributes associated with interoperability?
What benefits might be realized if interoperability is achieved?
Those interviewed for the report generally agreed on the definition of interoperability—1) the ability to pay anyone at any time to any account, and 2) the ability to seamlessly identify and pay another person regardless of the payment system used. Many of the interviewees also cited common attributes as integral to achieving interoperability including message formats (specification/data), operating rules and guidelines, settlement, and business processes. In response to tangible benefits of interoperability, interviewees highlighted an enhanced customer experience, more competitive market, improved operational efficiency, and reduced risk exposure.
"This research report provides a nuanced view into stakeholder expectations for interoperability in the United States,” said Elizabeth McQuerry, partner at Glenbrook Partners. “Expanding on the findings from the Faster Payments Barometer, stakeholders expressed not only consistent reasons for why interoperability is important but also had a pragmatic openness to how it is achieved. This flexibility may prove to be a critical component for faster payments to become ubiquitous in the United States."
The FPC prioritizes industry collaboration in tackling complex topics such as interoperability among faster payments solutions, identifying real-world solutions that can ease adoption of faster payments, managing security risks and fraud threats, addressing barriers to financial inclusion and cross-border payments, and more, as the organization paves the way toward a future of faster payments for all.