Payments Security Overview


The U.S. payment system faces dynamic, persistent and rapidly escalating threats as technological developments in cybercrime make it easier than ever to commit payments fraud. The growth of e-commerce and smartphones has changed how we authenticate users and increased the points of vulnerability, raising expectations of security and reliability among consumers and businesses alike. The Federal Reserve is taking an active role to help the industry understand and address these challenges as a leader and catalyst in the U.S. payment system.

The Journey to Secure Payments

Payments Security Overview

Since 2013, the Federal Reserve has collaborated with a wide array of industry stakeholders to advance payments security. From June 2015 through March 2018, the Fed established and led the Secure Payments Task Force (Off-site) as it identified and proposed actions to advance security. Based on feedback from the task force and industry, the Fed considered five areas to reduce fraud risk and advance the safety, security and resiliency of the payment system:

  • Endpoint security
  • Identity authentication
  • Data protection
  • Fraud information sharing
  • Secure interconnectivity of emerging payments.

In 2018, the Fed published fraud data (Off-site) from its triennial Payments Study and key findings from Boston Consulting Group’s secondary research and interviews (PDF) on U.S. payment system fraud, associated costs, causes and contributing factors. These research findings and ongoing dialogue with payments industry stakeholders led the Fed to identify four areas for near-term action:

Fraud Definitions

Improve understanding of fraud by creating and publishing recommended definitions for ACH, wire and check fraud.

Develop a roadmap to encourage broad industry acceptance and use of these definitions in fraud reporting.

Synthetic Identity Payments Fraud

Improve understanding and awareness of the scope and impact of synthetic identity payments fraud.

Collaborate with industry partners, government agencies and other stakeholders to identify mitigation options.

Payments Identity and Authentication Fraud

Collaborate with the industry to identify ways to strengthen payment identity verification, management and authentication practices for current and emerging payment systems.

Industry Outreach and Dialogue

Engage senior leaders across the industry in exploring opportunities to reduce fraud and maintain the integrity and resiliency of the U.S. payment system.

The Fed continues to seek industry input on these areas, as well as other ideas to advance payments security. We welcome the opportunity to encourage and assist existing industry initiatives to identify and promote best practices, frameworks and information-sharing forums for payment security and risk management. As always, we will continue to be transparent, collaborative and inclusive as we work to keep improving the U.S. payment system.