Many news organizations including this article in MarketWatch have been highlighting the announcement on Friday regarding a milestone reached by the Federal Reserves’ Faster Payments Task Force. The task force of over 300 individuals with varied backgrounds has been working for years to shape the direction for the creation of a real time payments platform for the U.S.:
The Federal Reserve Faster Payments Task Force issued a final report that recommended a framework for rules, standards and systems, and a streamlined, all-encompassing payment system that keeps pace with technological development.
Developing a brand new payment infrastructure starting from scratch is difficult to say the least, especially in consideration of the complexity of the U.S. market and the (mostly) market driven approach that is being taken. This is in contrast to most other countries which have mandated real time payments through government developed, owned and operated solutions. Those looking for a definitive outline in this report of how a real time solution should be developed were probably disappointed. The message of Friday’s announcement was that the ground work has been created, but there is a lot of work yet to be done. Even as real time transaction products are being rolled out, it will take several more years for the full infrastructure, governance, security and all the desired features to become available:
The report recommends that the Fed work with regulators to evaluate how laws will apply to emerging payment technologies, implement a faster payment settlement service and play an operational role in supporting the process in its entirety.
Additionally, it recommends increased awareness and security for end users and service providers, as well as ongoing research on functionality and emerging technologies in order to establish faster payments framework, rules and standards throughout the U.S. financial system.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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