On February 2, 2016, the Federal Reserve Board (FRB) issued a progress report on its current initiative to improve the US payments system. While the FRB has been studying this issue for several years, last year it issued specific strategies on ways to improve the system’s speed, efficiency and security.
Progress on the strategies thus far and plans for 2016 include the following:
Strategy 1: Stakeholder Engagement: Strong industry collaboration has resulted in identifying specific ways to improve the US payment system, including establishment of task forces focusing on faster and more secure payments. In 2016, the FRB will continue to offer opportunities for stakeholders to become more involved in the project.
Strategy 2: Faster Payments: The Faster Payments Task Force has developed criteria to assess proposed faster payment solutions, a decision-making methodology for obtaining task force approval of those proposals and a common set of terms for task force work products. This year, it plans to assess various solutions proposed by members of the task force and measure them against the effectiveness criteria and then publish a report on the assessment early next year.
Strategy 3: Payment Security: The Secure Payments Task Force identified its top priorities on which to focus, including payment identity management and data protection, and contributed to the security aspects of the criteria for faster payments. This year, its focus will include ways to address the lack of standard methods for verifying the identity of participants in the payment system.
Strategy 4: Payment Efficiency: The Remittance Coalition is working to develop remittance standards, to lower costs for accessing the payment system and to encourage more use of electronic payments. This year it is working on implementation in the United States of a global standard in cross-border wire transfers.
Strategy 5: Enhanced Federal Reserve Services: Federal Reserve Financial Services have been enhanced in order to encourage use of its settlement services by the private sector. This year the FRB expects to roll out enhancements to its products to enable faster clearing and settlement of payments.
Further information on the project and opportunities for involvement may be found at FedPaymentsImprovements.org.