Payments in the US are undergoing a remarkable period of change that may have been unimaginable 20 years ago. The payment system is becoming more complex and payment preferences are evolving rapidly. The Federal Reserve Banks believe that ubiquitous, open payment networks and/or broadly interoperable networks best serve the public interest because the more members of society who can be reached with a payment instrument, the more valuable the payment instrument is to each of the other members of society. The breadth and complexity of the US landscape make it especially hard to do this.
The Fed sees one of its roles as bringing the industry together to foster coordination and, where appropriate, to drive payment system improvement. To this end, the Fed just issued "Payment System Improvement – Public Consultation Paper" seeking your opinion. The purpose of this paper is to articulate the Fed's perspective and to solicit broad industry input.
The paper identifies these gaps and opportunities in the current payment environment:
- Checks persist because they have important attributes
- Other countries are moving (faster) to ubiquitous near-time payments
- Recent payment innovations are still limited-participation systems
- Legacy systems lack features that end users desire
- Mobile devices have the potential to transform payments
- Business accounting systems are complex and costly to change
- Consumer fears about security inhibit electronic payment adoption
The Fed outlines desired outcomes to be achieved within 10 years. They include:
- Key improvements have been collectively identified and embraced
- A ubiquitous electronic solution for making retail payments exists
- End-to-end (societal) costs of payment transactions have decreased and value to consumers and businesses has increased
- System security has been maintained and public confidence remains high