Strategies for Improving the U.S. Payment system

The Federal Reserve believes that the U.S. payment system is at a critical juncture in its evolution. Technology is rapidly changing many elements that support the payment process. High-speed data networks are becoming ubiquitous, computing devices are becoming more sophisticated and mobile, and information is increasingly processed in real time. These capabilities are changing the nature of commerce and end-user expectations for payment services. Meanwhile, payment security and the protection of sensitive data, which are foundational to public confidence in any payment system, are challenged by dynamic, persistent and rapidly escalating threats. Finally, an increasing number of U.S. citizens and businesses routinely transfer value across borders and demand better payment options to swiftly and efficiently do so. Responses to the Federal Reserve’s 2013 Payment System Improvement - Public Consultation Paper (Consultation Paper) indicate broad agreement with the gaps, opportunities and desired outcomes discussed in that paper. Recent stakeholder dialogue has advanced significantly, and momentum toward common goals has increased. Many payment stakeholders are now independently initiating actions to discuss payment system improvements with one another—especially the prospect of increasing end-to-end payment speed and security. We believe these developments illustrate a rare confluence of factors that create favorable conditions for change. Through this Strategies for Improving the U.S. Payment System paper, the Federal Reserve is calling on all stakeholders to seize this opportunity and join together to improve the payment system.