The Federal Reserve has reached out to the business community, particularly those involved in facilitating and using payment systems, to improve such systems, especially in the area of electronic processing. However, United TranzActions' Rudet Fountain said easy, across-the-board fixes will be hard to create by the agency.
In the report, Payment System Improvement–Public Consultation Paper, the Fed highlighted the rapidly evolving changes in payment systems, especially due to demographic shifts, application of new technology, increased cross-border business and other factors. The Fed wants to bring industry stakeholders together to create a framework to address obstacles to payment systems safety, efficiency and innovation. Therein, a survey linked from the report landing page lists questions to help determine existing and potential gaps in efficiency of the U.S. payment system, outcomes that should be pursued, the potential for increased fraud risk and what role the Fed should take. The deadline for responses is December 13.
Fountain told NACM that coming up with a workable solution will be “a very broad and massive undertaking.” In addition, he said there are many obstacles in the way of a ubiquitous solution that helps business-to-business as well as business-to-consumer transactions. Still, he said involvement of merchants is paramount.
“I think there is room to get involved and have our voices heard as end-users,” Fountain said. “The Fed said they wanted to have end-users involved because they are going to be the ones who have to use the solution. I think it is important for businesses to say what they think the solutions are.”
It’s worth noting that the Fed has a reputation for skewing more toward consumer-based fixes, rather than B2B ones. After all, the B2B sector represents a smaller number of parties. However, absent of businesses coming forward to talk about what they need and the critical nature of knowing the deep differences between consumer-based and B2B transactions, solutions could be even more mismatched to a B2B world. That is a headache small and medium-sized businesses do not need, going forward.
For more information on the Fed electronic payments effort or to fill out its online survey on the topic, click here.
- Brian Shappell, CBA, CICP, NACM staff writer
Check out this week’s eNews, available late Thursday afternoon at www.nacm.org for much more on this story.