April 24, 2018
With innovation rapidly changing the nation’s payments landscape, a group of diverse industry stakeholders today released for broad stakeholder review and comment its draft faster payments governance framework (PDF) for the U.S. Faster Payments Council (FPC). The goal of the proposed organization is to facilitate a ubiquitous, world-class payment system where Americans can safely and securely pay anyone, anywhere, at any time and with immediate funds availability.
The FPC proposal is a work in progress, the result of eight months of deliberations by the 27-member Governance Framework Formation Team (PDF) (GFFT), a short-term work group established by the Faster Payments Task Force and facilitated by the Federal Reserve. The recommendation to develop and establish the framework was the leading directive of the task force, as noted in its final report (Off-site) published last July. The FPC will be open for all to join as the long-term successor to the GFFT, which will be disbanded at year-end.
“The GFFT has worked hard to produce a draft governance framework that’s focused on broad participation and pragmatic, private-sector approaches to solving problems and removing barriers to ubiquity and adoption,” said Sean Rodriguez, Federal Reserve executive vice president and GFFT chair. “I’m proud of their commitment to the task force vision and to working aggressively to advance this draft framework for stakeholder feedback. This work helps maintain momentum in achieving a vision of a safe, ubiquitous, broadly inclusive and faster payments system for our country.”
Why a new governance body?
A number of new and innovative payment solutions have come to market and others may be emerging soon. With these developments as the starting place, the task force and GFFT assert that an appropriately open and inclusive organization can help get the industry to ubiquity faster than through bilateral cooperation alone.
“A goal of the FPC is to allow all stakeholders to have a voice in shaping the future of our nation’s faster payments system,” said Adam Rust, director of research, Reinvestment Partners. “I am particularly excited about the many ways faster payments can improve consumers’ lives – whether getting access to wages immediately after a day’s work, avoiding late fees on bills due, ensuring loved ones get emergency funds in real-time and more. Ubiquitous faster payments can improve peoples’ lives in ways that save time and money and offer greater convenience.”
The proposed FPC will help:
- Drive the emerging faster payments infrastructure toward interoperability where needed;
- Foster a high-quality user experience for all; and
- Get the industry to ubiquity faster than otherwise possible.
“In approaching the governance framework, the GFFT agreed that giving users peace of mind via a safe, consistent and positive experience with faster payments is key to achieving end-user trust and confidence – and ultimately, ubiquity,” said Steve Ledford, senior vice president, The Clearing House. “Helping consumers and businesses understand faster payments is another essential step to ensure confidence and make faster payments safe and ubiquitous. As one example of its functions, the FPC will coordinate education and awareness campaigns to inform consumers about how to use this new payment option, and how it is different.”
Success depends on guiding principles, broad participation
The FPC will be governed by several guiding principles, which the GFFT believes are imperative to attracting a large, diverse group of stakeholders and gaining consensus on the issues and barriers that need to be resolved to achieve ubiquity. The guiding principles include:
- Openness and inclusiveness
- Flexibility and responsiveness
- Fairness and transparency
“In the FPC’s membership, Board structure and decision-making processes, it is important to the GFFT that the FPC be inclusive and represent the diversity of payments industry stakeholders while balancing infrastructure investments and risk exposure. Input on this point from all stakeholders is essential to help the GFFT achieve these goals,” said Tom Rea, executive vice president, U.S. Bank. “We want to ensure that all members’ proposals and concerns are considered, whether they support a majority or minority view.”
Comment period open for stakeholder feedback, next steps
The operating vision for the FPC is available for review and broad stakeholder feedback via an online survey (Off-site) now through June 22 at FedPaymentsImprovement.org. The GFFT notes that the operating vision is a work in progress. Stakeholder feedback received during the comment period will help determine where there is broad agreement on the proposed organization, inform areas that require further refinement, and gauge support for moving it forward.
Upon completion of the comment period, the survey responses will be summarized into a report and published on FedPaymentsImprovement.org.
For more information on the Governance Framework Formation Team or its predecessor, the Faster Payments Task Force, go to FedPaymentsImprovement.org or FasterPaymentsTaskForce.org (Off-site).