The U.S. payments system is undergoing a significant period
of change, driven by the adoption of new technologies and evolving end-user
expectations. Research is confirming that consumers and businesses are becoming
increasingly interested in a faster payments system. This system is modeled
after a system similar to the Faster
Payment Service already running in the U.K. This is also similar to the
industry focus on mobile payments to make the entire
payments process easier and efficient for all parties involved.
Its clear that mobile payments have made transactions
possible and easier for businesses on the go. However, there is a lot of work
that goes into getting them set up and secure for users. Although the gateway
is secure, the transaction still has to bounce off wifi and radio towers, which
makes it vulnerable.
Consumers and businesses recognize that faster payments
would be beneficial in a lot of cases. There is a high need for instant
payments in the U.S. and there is an opportunity to improve speed and
efficiency of payments while also maintaining security.
As of now, the Federal Reserve wont mandate that banks and
credit unions move to a new fast payment mechanism. They are working on
suggestions and recommendations for how this can be done given our payment
ecostructure. In doing so, fraud prevention
solutions have to be taken into consideration. There is fear that with
instant payments comes a heightened risk for fraud. This is where stronger
authentication is a must.
Moving toward faster payments requires security
enhancements. So while a fast payment system would require banks and credit
unions to do some retooling and will be quite costly, the Federal Reserve
believes that the investment would pay off in the long run.
What are you thoughts on a faster payments system?