In conjunction with the first anniversary of the launch of its faster payments system initiative, the Federal Reserve Board (Board) released its progress report on improvements to the payments system in the United States (Progress Report). The Progress Report outlines accomplishments and milestones reached under the Board’s 2015 “Strategies for Improving the US Payment System.”
In the Progress Report, the Board emphasizes achievements in five strategic areas:
- Stakeholder Engagement
- Faster Payments
- Payment Security
- Payment Efficiency
- Enhanced Federal Reserve Services
The Progress Report discusses the various task force groups formed as part of the faster payments system initiative. Most significantly, the Faster Payments Task Force developed its Effectiveness Criteria, Decision-Making Framework, and Glossary of Terms. These key documents will serve as the foundation for the Faster Payments Task Force’s evaluation of various proposed faster payment solutions.
The Progress Report also highlights the Board’s work on developing increased availability of faster payments, including expanded hours for the National Settlement Service and the Board’s support for the National Automated Clearing House’s (NACHA’s) Same-Day ACH Initiative, which NACHA plans to roll out this year.
Developments to Look For in 2016
As the Board continues its work developing faster payments systems, interested parties should keep an eye out for the following this year:
- The Faster Payments Task Force will begin assessing proposed solutions for faster payments, with the goal of publishing the assessments and companion analyses in early 2017.
- The Board and NACHA will continue their work to implement the NACHA Same-Day ACH Initiative. This will be a significant change to the ACH system, which routinely can require up to three days for settlement.
- There will be a focus on electronic payments system “barriers to entry” that are faced by small businesses and community banks, and an effort to develop tools and proposals to help overcome such barriers in order to promote more widespread adoption of electronic payments.
- There will be a continued emphasis on issues related to the security of the payments system, including the lack of universally accepted ways to verify identities of payment systems participants.
- Adoption of uniform and global standards, including the ISO 20022 universal format for wire transfers and ACH that is being increasingly adopted across the globe.
More information, including the Effectiveness Criteria, details on the work of the various task forces, and FAQs on the Board’s initiative, is available at the Federal Reserve’s dedicated FedPayments Improvement website.