The Federal Reserve’s Payment Security Strategy
The U.S. payment system faces dynamic, persistent and rapidly escalating threats as technological developments cybercrime makes it easier than ever to commit payments fraud. Since 2013, the Federal Reserve has collaborated with a wide array of industry stakeholders to advance payments security, as well as speed, efficiency, cross-border access and industry collaboration. From 2015 through March 2018, the Federal Reserve established and led the Secure Payments Task Force (Off-site) as it identified and proposed actions to advance security. Upon conclusion of the task force, the Federal Reserve conducted an assessment to determine top priorities for its next phase of industry collaboration on payments security.
Based on feedback from the task force and industry, the Federal Reserve identified five areas of focus for consideration: endpoint security, identity authentication, data protection, fraud information sharing, and secure interconnectivity of emerging payments. The Federal Reserve’s payments security strategy leadership set parameters for the next steps to address issues of common concern. As a leader and catalyst for change, where can the Fed help the industry accelerate its progress? Where are the gaps in payments security knowledge or efforts? To help inform its next steps, the Federal Reserve commissioned the Boston Consulting Group to conduct secondary research and interviews (PDF) on U.S. payment system fraud, associated costs, causes and contributing factors.
Key findings of the study: Payments fraud is significant and has grown in absolute terms from 2012 to 2015, although it remains a small fraction of overall U.S. payments. (This finding was further confirmed by Federal Reserve Payments Study fraud data (Off-site) announced in October 2018.) The secondary research uncovered data gaps and inconsistencies that make it more difficult to assess – and address – payments fraud. In addition, the Boston Consulting Group identified six U.S. payment system vulnerabilities that helped us set new priorities for action to improve payments security.
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.
- Priorities to Advance Payments Security
- Executive Summary: A View of Payment Security Trends, Gaps and Vulnerabilities (PDF)
- Changes in U.S. Payments Fraud from 2012 to 2016: Evidence from the Federal Reserve Payments Study (Off-site, PDF)
- Press Release: Federal Reserve Payments Study finds U.S. payments fraud a small but growing fraction of overall payments (Off-site)
- Talk About Payments Webinar: Federal Reserve Payments Study – Payments Fraud (Off-site)
- Secure Payments Task Force overview and meeting materials
- SecurePaymentsTaskForce.org (Off-site)