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"The Faster Payments Task Force calls upon all
stakeholders to seize this historic opportunity to
realize the vision for a payment system in the United
States that is faster, ubiquitous, broadly inclusive, safe,
highly secure, and efficient by 2020," the Faster Payments
Task Force Final Report Part Two: A Call to Action, stated.
"Achieving the vision will be enabled by ubiquitous
receipt – where all payment service providers are
capable of receiving faster payments and making those
funds available to customers in real time."
Zelle is not an outlier. Banks and financial technology
companies are working on several initiatives to speed
consumer and business payments. The report references
and describes 16 proposals evaluated by the task force.
But multiple solutions are not the answer. "[S]ervice
providers and end users will see little or no value if
required to invest in or use multiple solutions to reach
a large number of end users," the report noted, adding
that while no one can say precisely how many solutions
are enough, "it is desirable to broaden the reach of all
solutions by enabling faster payment transactions to
cross between them."
Interoperability, Always-on Net Settlement

The report offers several recommendations for achieving
this goal. For example, the task force wants the Fed to
develop an always-on settlement service. That's a far cry
from current practice which more closely resembles old-
fashioned "banker's hours" than a 24/7/365 operation.

Historically, as a regulator and as gatekeeper to the
nation's payment system, the Fed has taken a poky
approach to change. A recent set of rule changes
addressing electronic checks and shortening check
return mandates (in response to near universal
electronic clearing) languished at the Fed for three
years. Those changes take effect in July 2018.

The Fed's national net settlement service – which
provides final settlement of ACH, wire transfer and
other bank-to-bank transactions – operates from 7:30
a.m. to 5:30 p.m. ET, Mondays through Fridays, except
holidays. The need for an always-on national service
that can accept electronic files to effect final settlement
on financial institutions' Fed accounts is not new. It has
been discussed for years, including among members of
the Fed's Faster Payments Task Force. How long will it
take for the Fed to change its hours? No one can say, but
I can't imagine it happening in three years, given the
required changes in technology, staffing and operating
rules.

Patti Murphy is Senior Editor of The Green Sheet and President of
ProScribes Inc. She is also the founder of InsideMicrofinance.com.
Email her at patti@greensheet.com.

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