There has been a lot of commentary and also actual deployed solutions to make payment transactions faster. NACHA has begun to roll out same day ACH, compressing the time it takes to send an ACH transaction to a matter of hours. Mastercard has been touting its MasterCard Send product and similarly Visa has launched Visa Direct, both platforms allowing a variety of transaction to occur in near real-time using the infrastructure of the card networks. Early Warning continues to add more financial institutions to its clearXchange platform that delivers a near instant P2P transactions.
All the while, the FedPayments Improvement initiative has been working on defining a broad set of requirements that lays the foundation for a faster payments platform to encompass the needs of all use cases and can exchange payments with other faster payments platforms globally. The Fed, in its role of project sponsor and project manager has announced that its faster payments task forces will begin to analyze proposals it has received from industry payments providers to develop the solution that fulfills their established requirements:
One task force is focused on faster payment capabilities, while the other is working to enhance payment system security. The review by the two task forces follows an independent analysis of the proposals by the global consulting firm McKinsey & Company, which assessed the proposals against criteria created by members of both task forces.
There will be two points of output from this process that the industry can look forward to:
A final two-part report will result from the Faster Payments Task Force work effort. The first section, slated for release in January 2017, will describe the task force history and background, including the process undertaken to identify and assess faster payments solutions. In addition, the report will detail gaps in the current payments landscape and identify opportunities for improvements. It will also outline the benefits to the public of a faster payment system and the needs it would serve.
The second section of the final report, targeted for release in mid-year 2017, will include a discussion and assessment of the specific proposals. The proposals will offer models of what an end-to-end faster payment system in the United States could look like and will show how each proposal measured up against the various effectiveness criteria. In addition to the proposals and the assessments, this section will identify strategic issues deemed important to the successful development of faster payments in the United States and recommend industry actions required to advance their implementation and adoption.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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