A Goal of Faster Payments by 2020 Highlights Fed-Sponsored Report Expected Friday

The Federal Reserve on Friday is releasing a report that calls for all American consumers and businesses to have, by 2020, the ability to receive faster payments.

The ambitious goal is included in the final report of the Faster Payments Task Force, a Fed-sponsored group of more than 300 industry executives and other interested parties who have met for the past two years to solicit and review proposals to speed up clearing and settlement time for electronic payments. The Friday announcement includes a Web broadcast featuring discussion of the 16 proposals included in the final report, most if not all of which envision near-real-time processing.

The Task Force’s final report looks at faster-payments technologies, hurdles in the way of implementing them, and factors that will have to be addressed if the 2020 goal is to be met. But it avoids proposing a single faster-payments system for the United States, instead adopting a laissez-faire approach that would allow multiple systems to emerge and let consumers, businesses, and payments players determine ultimate winners.

“Our goal is to ensure that anyone anywhere is able to pay and be paid quickly and securely,” said Sean Rodriguez, the Fed’s strategy leader for faster payments and chair of the Faster Payments Task Force, in a statement. “In real terms, that means people will not have to wait hours or days to deliver and access their money. Businesses will have enhanced cash management and better information associated with their payments.”

Proposals evaluated in the final report come from a wide spectrum of payments companies and organizations, including: Dwolla Inc.; Hub Culture, ECCHO, and Xalgorithms; InterComputer Corp.; Kalypton Group Ltd. and ECCHO; Mobile Money Corp.; nanoPay Corp.; North American Banking Co. and Independent Community Bankers of America; Ripple Labs; Shazam Inc.; SwapsTech, The Clearing House and Fidelity National Information Services Inc.; Thought Matrix Consulting LLC; Token Inc.; University Bank; WingCash; and World Currency USA Inc.

The finalists emerged from an evaluation of proposals by consultants at McKinsey & Co., who applied some 36 so-called effectiveness criteria developed by the Task Force.

Look for a full report on Friday’s event at Digitaltransactions.net later in the day and in Monday’s issue of Digital Transactions News.