Saying that payments and their security have reached a “critical juncture,” the U.S. Federal Reserve will be scaling up its focus on payment security and the new technologies that drive it, Federal Reserve board governor Jerome Powell said on Wednesday.
Powell told attendees at a New York conference that the central bank will be kicking off a study next year designed to root out payment security vulnerabilities. The Fed also plans to create new working groups focused on bringing down the cost of secure payments.
“Rapidly changing technology is providing an historic opportunity to transform our daily lives, including the way we pay. FinTech firms and banks are embracing this change as they strive to address consumer demands for more timely and convenient payments,” said Powell.
“It is essential, however, that this innovation not come at the cost of a safe and secure payment system that retains the confidence of its end users.”
The Fed already leads the 160-member Secure Payments Task Force as part of its ongoing drive to make the U.S. payment system faster and easier to use — while also making sure it remains secure.
Which, over the last several years, is an increasingly difficult feat — as cybercriminals worldwide are finding new and inventive ways to insert themselves unwanted into the payments system.
Powell noted in his remarks that the new FinTech payment companies create “significant challenges to traditional banking business models.”
That sentiment has been going around in mainstream financial services of late — Barclays Chief Executive Officer Jes Staley noted over the weekend that payments would be the next battleground for banks amid increasing competition from FinTech players and tech giants including Amazon and Facebook.