The Board of Governors of the Federal Reserve System ("FRB") published a paper outlining strategies that the FRB intends to implement in order to "improve the speed, safety, and efficiency of the U.S. payment system."
After evaluating the level of progress that resulted from marketplace activities and the report of the Faster Payments Task Force (see previous coverage), the FRB determined that more work must be done to "implement safe, ubiquitous retail payments and enhance the safety, efficiency, and resiliency of the U.S. payment system." The FRB identified the following "refreshed" strategies and tactics for achieving these goals.
- Speed: (i) support collaborative efforts to create a "faster payments ecosystem" in line with FRB and industry goals, as well as with Faster Payments Task Force objectives, and (ii) evaluate whether, in addition to providing settlement services, the FRB should explore "engagement as a service provider" to support a faster payments system;
- Security: (i) work to develop approaches that mitigate payment security "vulnerabilities" and implement better-aligned incentives to encourage strong security practices, and (ii) institute industry work groups focused on reducing the cost and commonness of payment security vulnerabilities;
- Efficiency: support efforts to establish standards that enable the "end-to-end electronic processing of business invoices, payments, and remittance information";
- International: work with market participants to evaluate both the difficulties of and opportunities for improving the current system of cross-border payments; and
- Collaboration: (i) foster a "highly interactive and flexible" community that allows market participants to engage actively in improvement initiatives, and (ii) advance further outreach and education in order to promote the adoption and acceptance of improvement efforts.
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