Working Toward a Better Payments System
Collaborate. Engage. Transform.
This website is an important resource for anyone interested in payments improvement. By sharing news, insights and industry trends – produced in partnership with stakeholders from across the payments ecosystem – we support a robust FedPayments Improvement Community, where members are empowered to collaborate, engage and transform the U.S. payment system.
Our Role in Payments
A payment system that is safe, efficient and broadly accessible is vital to the U.S. economy. As the central bank, the Federal Reserve has a vested interest in maintaining a strong, resilient and well-functioning payment system, and it performs various roles to serve that interest, including payment system service provider, leader/catalyst, regulator and supervisor. FedPayments Improvement efforts focus on the Fed’s roles of service provider and leader/catalyst. Learn more about our payments history here.
Providing Financial Services
As a provider of financial services, the Reserve Banks store currency and coin, and process both checks and electronic payments through Fedwire® Funds Service wire transfers and Automated Clearing House (ACH) electronic credit and debit transfers. As part of payment processing, the Federal Reserve provides mechanisms for the settlement of payment transfers between financial institutions – the actual movement of funds from one account to another.
Galvanizing the Industry
In 2013, we launched a payments modernization effort in collaboration with industry stakeholders. During this time, we conducted extensive research on end-user preferences and needs for payments capabilities, such as end-to-end speed, safety and efficiency. That work produced three foundational papers that outline where the needs are and the strategies and tactics that are necessary to address those needs.
- Payment System Improvement – Consultation Paper (PDF)
(September 2013) Shares the Fed’s perspectives on key gaps and opportunities in the current U.S. payment system and solicited broad industry input on the perspectives the Fed shared within the paper. - Strategies for Improving the U.S. Payment System (PDF)
(January 2015) Response to the industry input collected following the publication of the Consultation Paper, outlining desired outcomes for the payment system and multi-year strategies that the Fed will work with industry stakeholders to pursue. - Strategies for Improving the U.S. Payment System: Federal Reserve Next Steps in the Payments Improvement Journey (PDF)
(September 2017) Reflects the Fed’s plans for near-term collaboration with the industry. This paper shares refreshed strategies and nine new tactics the Fed will employ, in collaboration with industry stakeholders.
Specifically, the needs, or desired outcomes, are:
- Speed: A ubiquitous, safe, faster electronic solution(s) for making a variety of business and personal payments, supported by a flexible and cost-effective means for payment clearing and settlement so that groups can quickly settle their positions
- Security: Strong U.S. payment system security, high public confidence, and protections and incident response that keeps pace with the rapidly evolving and expanding threat environment
- Efficiency: A greater proportion of payments originated and received electronically to reduce the average end-to-end (societal) costs of payment transactions and enable innovative payment services that deliver improved value to consumers and businesses
- International/Cross Border: Better choices for U.S. consumers and businesses to send and receive convenient, cost-effective and timely cross-border payments
- Collaboration: Necessary payment system improvements are collectively identified and embraced by an array of payment participants, with material progress in implementing them
These desired outcomes subsequently resulted in five payment improvement strategies: faster payments, payments security, payments efficiency, international payments and collaboration. Read more about them on the What We Do page.