The Federal Reserve’s call for a faster-payments system to be in place in the United States by 2020 has been termed everything from a vision to a goal, a soft goal, or a deadline. One thing it isn’t is a mandate. So can faster payments arrive in less than two and a half years?
That was the question Sean Rodriguez, a Federal Reserve executive vice president and strategy leader on the Fed’s faster-payments project, posed this week at the Federal Reserve Bank of Chicago’s annual Payments Symposium. “It’s a little bit of a zinger,” Rodriguez said to a panel of payments executives who are members of the central bank’s Faster Payments Task Force. “How realistic is that? Can we do it?”
The most notable answer came from Bradley Wilkes, founder and chief executive of digital-wallet developer WingCash LLC. “It’s incredibly unrealistic, but I think it can be done,” Wilkes said, generating peals of laughter from conference attendees.
Wilkes went on to explain that the faster-payments process, which culminated with Part II of the Task Force’s final report in July was led by the Fed and got many firms in the payments industry talking with each other. That was something “I don’t think we’ve seen in the U.S. market before,” he said.
Still, having faster payments in place by 2020 will be a tall order, according to Wilkes.“It’s a pretty significant undertaking … monumental in that regard.”
Another panelist, Richard W. Burke Jr., head of corporate products and services at TD Bank, said a goal of 2020 “is very doable if people collaborate.”
“There are market-ready solutions and near market-ready solutions [that will work] if they can figure out, technically, how to connect with one other,” said Burke. He added that “it may not be the perfect solution. I don’t know if there ever will be a perfect solution.”
Charles R. Ellert, payment strategy manager at phone giant Verizon Communications Inc.—which sends 50 million bills per month—agreed that faster-payment systems already exist. “I think the challenge will be interoperability,” he said.
Having something in place by 2020 “is realistic,” Ellert said, but he also noted that large corporations will want a full-service system to include messaging capabilities developed under the ISO 20020 standard, as well as other bells and whistles.
“It’s going to take a lot for corporates to realize that vision by 2020,” Ellert said.