The Federal Reserve has served as a catalyst for change in the improvement and advancement of payments security in the United States and continues to engage with industry stakeholders. To help the Fed set priorities for collaboration with the industry to enhance end-to-end payments security, the Fed commissioned Boston Consulting Group to assess fraud and associated costs, causes and contributing factors and published an executive summary called A View of Payments Security: Trends, Gaps and Vulnerabilities. In addition, Federal Reserve Payments Study data (Off-site) announced this October fostered a better understanding of fraud in the payments system. Together, these two data sources provide a comprehensive overview of payments fraud in the United States, will help educate the industry on the payments fraud landscape, and point to areas where additional work is needed.
Based on this Fed and third-party research, ongoing payments industry discussions, and recommendations of the Secure Payments Task Force, the Federal Reserve determined three common themes affecting payment security.
- U.S. payments fraud has continued to grow, although it remains a small fraction of overall U.S. payments
- Data gaps and inconsistencies across payment methods and stakeholder groups make it more difficult to assess – and address – payments fraud
- We are gaining insights on where fraudsters are exploiting vulnerabilities in the U.S. payment system
As announced at the inaugural FedPayments Community Forum October 3, the Federal Reserve has identified four payments security priorities for near-term action to address these themes:
- ACH and Wire Fraud Definitions
- Synthetic Identity Payments Fraud Mitigation
- Remote Payments Authentication Fraud Mitigation
- Facilitate Strategic Dialogue on Evolving Payments Security and Fraud Issues