'Universal security' remains goal of Fed faster payments in 2017
Recommendations for a framework to develop a "universal security baseline" to protect sensitive payment data at rest and in transit remains a key goal of the Federal Reserve faster payments initiative.
By the middle of this year, the Federal Reserve faster payments and security task forces will have recommendations in place and an outline of the next steps needed for secure, ubiquitous and faster payments in the U.S., according to a Jan. 26 update from the Federal Reserve.
After determining during the past year the identity management controls of eight key payment types — ACH, card not present, card PIN, card signature, checks, contactless, wallet and wire — the secure payments task force will develop an outline of high-level payment identity management recommendations as a tool for those developing security plans.
It is hoped that common security measures for all banks and payments providers could emerge from the process.
“The Fed’s priority is to advance improvements that are in the public interest so that consumers and businesses alike have access to efficient, real-time and highly secure payments in the United States,” said Esther George, president and chief executive officer of the Federal Reserve Bank of Kansas City, who is leading the payment system improvement initiatives on behalf of the Federal Reserve.
“Through a number of collaborative efforts, the industry is making real progress on all fronts and we’re expecting to achieve a number of significant milestones in 2017,” George stated in a release.
As part of the Fed's initiative to improve the country's payments system, the faster payments and secure payments task forces assessed 22 faster payments solution proposals in 2016 to determine how they match with previously established effectiveness criteria. Nineteen of those proposals will go through a review from the more than 500 participants of the two task forces.
The Federal Reserve report acknowledges a key factor moving forward will be the continued support of the next phases of the same-day ACH system that Nacha rolled out late in 2016.
Nacha, which manages the Automated Clearing House, reported that U.S. banks and credit unions processed more than 13 million same-day payments in the last three months of 2016.
The initiative also continues to focus on payment efficiency, citing adoption of Swift's ISO 20022 messaging standard for business payments as a key because of its ability to provide fund transfer recipients with remittance documents in language that all banks can translate.
The secure payments task force plans to conduct a series of in-person meetings and online webinars to educate customers and vendors about ISO 20022 implementation as it relates to the Fedwire Funds Service and various ACH tools in the marketplace.
After a final report is published in mid-2017, the Fed task forces will determine the next steps for industry collaboration for all aspects of faster payments in the U.S.