Catalyst News

Two Perspectives, One End Goal: Faster Payments.

by Catalyst Corporate | Sep 03, 2019

It’s nothing new, faster payments has been a rapidly evolving, popular topic of discussion within the payments industry lately. In fact, both the Federal Reserve and the U.S. Faster Payments Council (FPC) have made recent announcements in support of the faster payments initiative, making it evident that the wheels of payment change are in motion.

To recap, the FPC was formed in response to the Federal Reserve Bank’s Faster Payments Task Force stated mission: to further define a plan and vision for ubiquitous faster payments by 2020. In June, the FPC hired Executive Director Kim Ford to lead the organization’s efforts.

However, the most recent development came from the Federal Reserve Board as it announced the Federal Reserve Banks’ plan to develop a new real-time payment and settlement service – called FedNow℠ – in support of the United States’ faster payments initiative. As the first new payments rail in 40 years, this announcement has sparked commentary across the payments industry.

So, what’s being said in response to the Federal Reserve Banks’ announcement of the FedNow℠ Service? Inherently, we turn to two payments industry leaders for insight: Nacha President and CEO, Jane Larimer and U.S. Faster Payments Council Executive Director, Kim Ford – both of which will be featured speakers at Catalyst Corporate’s upcoming Economic & Payments Forum. 

Nacha released the following statement regarding the Federal Reserve Board’s plan to develop a real-time payment and settlement service:

“As the administrator of the ACH Network, and as an industry association dedicated to bringing diverse stakeholders together, Nacha is committed to working cooperatively with the Federal Reserve and The Clearing House as payment systems evolve into the future. We will continue to support rules and standards that foster compatibility and integration across a range of payment systems, provide educational resources and tools to achieve faster payments and promote the adoption of Same Day ACH payments.

“Nacha encourages the Fed to rapidly address other current payment needs, in addition to bringing payment services to market. Settling ACH payments between 100 percent of all financial institutions in the U.S. four times each day can increase competition and innovation, while reducing counterparty risk. For years, the Fed has been evaluating how it can extend its own National Settlement Service and wire operations to later in the day and on weekends, and it should now move forward to extend its current operating hours, as this would be consistent with its overall goals of improving the U.S. payment system.”

The FPC released the following response to the FedNow announcement:

“At the U.S. Faster Payments Council (FPC), our goal is to advance faster payments. To achieve that, we are bringing all payments industry segments together to determine the best paths forward. We believe that the Federal Reserve’s announcement is a strong endorsement of faster payments and puts an even greater emphasis on the need for industry to work together. As the Federal Reserve puts more specifics in place around the features of its real time settlement service, we encourage them to collaborate with the FPC and the broader industry to enable new opportunities, increase access, create greater efficiencies and support choice across the industry. As the faster payments landscape continues to evolve, the FPC's mission remains steadfast. We will work to ensure Americans can safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability. We’re looking forward to continuing to work with all industry stakeholders to make that vision of faster payments a reality.”

Catalyst Corporate is committed to sharing the latest faster payments news and developments. To hear more from Larimer and Ford on this topic, be sure to attend the 2019 Economic & Payments Forum. Early Bird registration is open until September 10. For complete details, visit https://www.catalystcorp.org/forum.