Two years ago, the Federal Reserve was looking to take a decade to review how to make payments a faster process, commissioning study after study on how best to do it. Yet the industry doesn’t go at the Fed’s speed, and they now realize that with an announcement that the central bank will be more aggressive in its pursuit of faster payments, which may include an operational oversight role if the private sector doesn’t move at the speed the Federal Reserve hopes for, according to Bank Info Security.
The new speed will hopefully produce outlines by 2016, while still revolving around the five desired outcomes the bank mentioned in its Jan. 26 report, which are faster electronic processing standards, tighter anti-fraud protections, greater efficiency of end-to-end payment delivery, easier cross-border payment access and increased collaboration by payment processors. Part of the collaboration push will include an implementation of ISO 2022 financial messaging, a common language financial institutions can follow for easier communication. These goals aren’t being changed or altered in any significant way, but the sense of urgency has increased according to Dave Sapenaro, first vice president of the Federal Reserve Bank of St. Louis.
U.S. payment companies are already well-versed on the ISO process, according to Sapenaro, but there will still need to be some form of education necessary to make sure it’s integrated appropriately to allow America to stay competitive globally. Two payments task forces will be launched soon that deal with real-time payment verification and user authentication. Titled the Faster Payments Task Force and the Payments Security Task Force, Sean Rodriguez, senior vice president at the Federal Reserve Bank in Chicago, will enable the Federal Reserve to “better understand what impact … the Fed can have in some of these areas, and determine what the next steps should be.”
The industry may get a greater idea of what the Federal Reserve may do at the Eastpay Conference later this month.