In a recent paper and presentation, a former Federal Reserve official from Kansas City, Bruce Summers, laments on the lack of government oversight in building a modern, digital payments-ready infrastructure. Subtext meaning the fact that the ACH system is still a batch processing clearing and settlement network and that the U.S. should look closely at how Faster Payments are structured in the United Kingdom and the Payment Services Directive was designed by the European Union Commission. From Finextra:
In conclusion, Summers recommends a four-stage action plan, including the clarification of the Fed’s role in payments system development; the creation of a new national commission on payment system innovation; the undertaking of a benchmark assessment of implementing national clearing and settlement processes and infrastructure to support immediate completion of digital payments; and the development of a special-purpose bank charter for non-bank providers of specialised payment services.
Is the U.S. ready for nationalized payments? Based on the bitter battle waged over the Durbin Amendment, one can only imagine the fireworks connected to these ideas. No doubt, actions like this would contribute to the competitive market in the U.S. and help to spur innovation, but unfortunately, they probably remain aspirational at best.
