Regina Williams Hendrick, Product Manager, TCS Financial Solutions
It is said that we all want to be accepted and a payment is no different. Real-time payments are fast becoming a reality worldwide with initiatives including Faster Payments in the U.K., the New Payments Platform (NPP) in Australia, SPEI in Mexico, FAST in Singapore, and the forthcoming SEPA Instant Credit Transfer in Europe.
With the support of the Federal Reserve as a catalyst, the U.S. is gaining momentum. In September 2017, the Federal Reserve outlined its next steps toward payments improvement: exploring the need for enhanced settlement services, analyzing potential security vulnerabilities, supporting industry standards for interoperability, assessing the challenges and opportunities for cross-border payments, and facilitating stakeholder engagement.
Unlike other regions, the U.S. will not have a hard deadline or regulatory mandate for faster payments. Although the goal is to have ubiquitous receipt of faster payments by 2020, U.S. financial institutions will not be compelled to participate in any specific initiative. Instead, the industry will support adoption and overcome barriers in a cooperative and consensus-driven manner to encourage multiple approaches.
The strategy for improving U.S. payment systems was developed through the Fed-backed Faster Payments Task Force (FPTF). Convened in 2015, the FPTF was formed with over 300 people representing financial institutions, end users, solution providers, and others. The FPTF came up with 36 “effectiveness criteria” for evaluating faster payments proposals based on ubiquity, efficiency, safety and security, speed, legal, and governance.
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