Dwolla has forwarded its proposal for faster payments to a Federal Reserve Board task force studying submissions as part of a national initiative, and its voice is one of several seeking to make a difference in the country's move to faster payments.
Dwolla's submission to the Faster Payments Task Force follows a proposal from The Clearing House, an operator of the Automated Clearing House network, and financial services provider FIS, which submitted at the end of April. Overall, 20 organizations have submitted proposals to the Fed.
Dwolla, which has had its FiSync protocol for faster payments in place since 2012 and within the last year offered it as a white-label application interface program as an alternative to ACH payments, sees tremendous potential in the Fed's approach.
"Our submission to the task force is a strategy for thinking about a way to distribute our knowledge around real-time payments," Dwolla CEO Ben Milne said of his company's 164-page proposal. "Dwolla is unique in that we have a faster payments system up that is running and serving clients today."
Though Dwolla earlier focused on selling FiSync directly to banks, it recently shifted its direct sales efforts to enterprises. Today, its strategy for banks involved working through third parties while also helping with interoperability in future faster payment schemes, Milne said.
The Fed task force, with more than 500 members, is targeting the first part of 2017 to publish reviews and comments about the proposals and assessments.
The process "leaves room for a lot of innovative thinking," Milne said. "New companies and existing companies are going to find unique solutions to the problems."
Most importantly, the task force is not seeking a consensus or solutions to satisfy the Federal Reserve Board, Milne said.
"They are running this process to get consensus on the rules of engagement, about how the systems will talk to one another and how companies see interoperability and security working together," he said. "We can't just drop FiSync in there for everybody to see and understand what it can do in the future. For the Federal Reserve task force, this is a huge submission and more manual process in talking about what we do today and what the technology can do tomorrow."
Jordan Lampe, Dwolla's head of communications and policy affairs, said the Fed task force presented itself as a perfect way for Dwolla to be part of something historic in the U.S.
"Everyone is submitting and being a part of this because they want a faster payments system and that's a powerful motivator for collaboration," Lampe said. "In an industry that is more often the opposite of being open and collaborative, this has provided a platform for us to improve our product for the stakeholders at the table and also hear them out."
Other recent developments include the Federal Reserve Board's own move last fall in approving same-day transaction processes to its ACH payments, emulating those of Nacha's Same Day ACH standards.
This year, Early Warning and clearXchange began addressing the security of faster payments just after Early Warning acquired the bank-led initiative to provide a P-to-P real-time payment scheme.