• The Federal Reserve Banks (Fed Banks) have recently issued their “Payment System Improvement – Public Consultation Paper” and seek input from payments
stakeholders, including credit unions and financial institutions. Sandra Pianalto, President of the Cleveland Fed stated the purpose for the paper is “to
share Federal Reserve perspectives on the key gaps and opportunities in the U.S. payment system and identify the desired outcomes that close these gaps and
capture these opportunities.”
• These potential gaps and opportunities with payments include: faster payments, closed payment communities, and international, mobile, and traditional
payment channels. The Fed Banks seek input on these issues and the role the Fed Banks should play in payments.
• CUNA is interested in your feedback on payment system gaps and opportunities. We will review this paper with the CUNA Payments Subcommittee, CUNA Councils, and others.
• Comments for the public consultation paper are due to the Fed Banks by December 13, 2013; please submit your comments to CUNA by November 18, 2013.
If you have any comments or questions, please contact CUNA Assistant General Counsel for Regulatory Research Dennis Tsang at email@example.com. For a PDF copy of this survey, please visit this link.
• For further details, please visit the Fed Banks’ Public Consultation Paper.
The Federal Reserve Banks’ (Fed Banks’) strategic direction in payments includes improving the speed and efficiency of the U.S. payment system from “end-to-end” over the next decade while maintaining a high level of safety and accessibility. “End-to-end” means from the point of origination to receipt, including with payment notification and reconciliation. To implement this vision, the Fed Banks are interested in working with payments stakeholders, including financial institutions, and end users such as consumers and businesses.
The paper acknowledges that today’s payment system accommodates the changing payment preferences of end users, as we see many new payment offerings such as person-to-person (P2P) and mobile payments.
However, the Fed Banks noted that many of these new payment offerings do not have a broad base of members, which makes it inconvenient or impossible for end users in the network to make or receive payments from users outside of the network.
Generally, legacy payment systems are more ubiquitous and allow end users to send payments to almost any receiver, without requiring the receiver to enroll in the system. This is because many legacy payments require a transaction account at a depository institution; a transaction account enables payments such as checks, funds transfers, ACH payments, and debit cards.
The goal of the Fed Banks is to foster an environment for payments innovation to meet the changing payment needs of end users and also to offer the advantages of near–ubiquity.