The Federal Reserve issued a progress report last week on its initiative to enhance the speed, efficiency and security of the U.S. payment system.
The Strategies for Improving the U.S. Payment System initiative, launched in January 2015, outlines five strategies the Federal Reserve is working on in conjunction financial services providers, financial institutions, consumer groups, and government agencies.
“The Fed’s priority is to advance improvements that are in the public interest so that consumers and businesses alike have access to efficient, real-time and highly secure payments in the United States,” Esther George, president and chief executive officer of the Federal Reserve Bank of Kansas City and initiative leader, said. “Through a number of collaborative efforts, the industry is making real progress on all fronts and we’re expecting to achieve a number of significant milestones in 2017.”
The progress report highlights the accomplishments thus far of two of the initiatives task forces – the Faster Payments Task Force and the Secure Payments Task Force.
The Faster Payments Task Force commissioned an independent assessment of 22 faster payments solution proposals against the established criteria and analyzed the potential challenges. The task force will complete its assessment of solution proposals and publish its recommendations for faster payments in mid-2017.
The Secure Payments Task Force is addressing the most pressing payment system security issues. It has mapped existing identity management practices to identify opportunities for improvements and defined guiding principles for protecting sensitive data. It has also done an inventory of industry efforts on fraud and risk prevention and mitigation with the idea of sharing best practices.
Later this year, the task force will publish its recommendations to make payment systems more secure.
“Protecting payment systems and transactions has become a critical function for central banks, financial institutions and technology providers as sophisticated cyber threats have increased in size and scale throughout the world,” Federal Reserve Board Governor Jerome H. Powell, co-chair of the initiative’s oversight committee, said.