The US government and the financial industry are finally in agreement that it's time to transform our payment system. Now comes the hard part. Achieving ubiquity is no easy job in a financial system as large and diverse as the US.
Nonetheless, a fair number of efforts are underway:
- The Federal Reserve in January released its long-awaited plans for shepherding the financial industry toward ubiquitous real-time payments.
- A few months earlier, big-bank trade group and payments company, The Clearing House, announced a multi-year effort to build such a system.
- NACHA is taking a fresh crack at a proposal to speed up ACH payments after big banks voted it down in 2012.
- Meanwhile, proprietary systems including clearXChange, FIS's PayNet and Fiserv's Popmoney have been forging ahead with real-time payment networks of their own.
- Other players include Ripple Labs, an alternative payments company that uses a distributed ledger technology to settle transactions in real time, and Dwolla, an Iowa-based digital payments startup that is also advancing the availability of immediate payments.
Nations like the UK, Australia, Singapore, Brazil and Mexico have implemented state-of-the-art networks that allow transactions to clear in minutes or even seconds. But most nations that have constructed or shifted to a real-time system have had the government take the reins.
While the Fed is working to ensure that a wide range of voices have their say before the task forces settle on a plan, it's aware that complete consensus may not be possible. While the road to real-time payments in the US is looking lengthy and tortuous, businesses and consumers are pressing for speedier transactions sooner rather than later. For now, there is no clear roadmap. The good news is that there is a national dialog about the payment system and positive movement towards common goals.