“Views are being sought on two potential actions that may support the further development of faster payments in the United States while increasing the resiliency and security of services offered to the public: 1) the development of a service for real-time interbank settlement of faster payments 24 hours a day, seven days a week, 365 days a year (24x7x365); and 2) the creation of a liquidity management tool that would enable transfers between Federal Reserve accounts on a 24x7x365 basis to support services for real-time interbank settlement of faster payments, regardless of whether those services are provided by the private sector or the Federal Reserve Banks.”
This being the Fed, the announcement came with a caveat:
“The Board is not committing to any specific action and is seeking input on which, if any, actions the Federal Reserve should take.” Comments are due by December 14, 2018.
Whisler, who attended the Chicago meeting, said “It will be interesting to see how the industry responds to this RFC (Request For Comment), knowing that the TCH (The Clearing House) has already launched their RTP (Real-Time Payments) network, not just from responding to the RFC itself but the next steps in executing a faster payments strategy.”
The U.S. is in a quandary, she said before the Chicago meeting. Bankers and regulators knows the country needs to get to real-time payments, and banks know it will move toward that, but just how quickly, how ubiquitous — those are still questions.
In communications the world has moved to real-time, Whisler added. You can do things with text messages, such as paying and donating, that people didn’t even think of 10 years ago. Other parts of the world are seeing innovation in payments. In APAC, and China in particular, retailers and taxi cabs are using QR codes for real time payments with customers using their mobiles to scan the QR code — no chip cards or terminals needed.
“In Europe we are starting to see trends around disintermediating POS terminals. The use of credit cards isn’t as prevalent in Europe where retailers are using the SEPA instant payment scheme. I think we could see some of those use cases being brought into the U.S., especially in niche markets that don’t need all consumers to check out in the same way. It would be interesting to see a large retailer like Walmart use QR codes.”
FIS defines real-time payments as “inter-bank fully electronic payment systems in which irrevocable funds are transferred from one bank account to another, and where confirmation back to the originator and receiver of the payment is available in one minute or less.”