The US Federal Reserve praised responses to a recent consultation paper on the US payments system and is taking steps towards updating the infrastructure as a whole.
The Payment System Improvement – Public Consultation Paper, released in September 2013, solicited comments on gaps and opportunities in the payments system, potential desired outcomes, strategies, tactics to shape the future of payments, and the Fed’s role in implementing those strategies and tactics. Industry feedback is being used to shape the Fed’s future improvement initiatives, to be communicated in another paper due to be published in the second half of 2014.
The paper calls for a ubiquitous electronic solution for faster retail payments. The Fed noted that consumers are not able to make near-real-time payments “in a convenient and cost-effective way” from one bank account to another. The central bank also believes that “more aggressive actions” may be necessary to wean the US off of paper cheques.
The central bank received nearly 200 responses between September and December, more than half from non-banks. Corporates, payment networks and processors, software vendors, consultants, consumers and trade groups all weighed in.
Sandra Pianalto, president and chief executive officer (CEO) of the Federal Reserve Bank of Cleveland, praised the “thoughtful and insightful responses” received from the diverse participants. “It’s critical that all ideas and perspectives are considered as we collectively identify the most promising opportunities to advance the US payment system,” she said.
Pianalto added that the Fed is carefully reviewing feedback to identify common themes and issues, along with possible solutions.
The Fed has two other information-gathering efforts in play to inform its plans for achieving faster retail payments. The central bank is researching end-user demand for specific payment attributes and assessing alternatives for speeding US payments. It is also identifying gaps and opportunities related to payment system security.
“The Reserve Banks remain committed to the continual improvement of the US payment system and will work collaboratively with stakeholders this year and beyond to implement innovations that meet evolving end-user needs for speed, efficiency and security,” said Pianalto.
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