Forward

In my 35 plus years at the Federal Reserve, I participated in several key US payment system enhancements that were aimed at improving the speed of funds exchange between payers and payees.

These efforts included: the maturation of the Automated Clearing House that now includes same-day clearing capabilities; implementation of the Expedited Funds Availability Act (EFFA), which sped up the banking system’s exception processing for check payments; and the implementation of the Check 21 Act, which enabled the exchange of digitized check images eliminating reliance on physical transportation of checks.

The capstone of my career was carrying out the industry-developed desired outcome for, once again, improving the speed of the US payment system. I had the honor and privilege to lead the Faster Payments Task Force, which was a broad and inclusive group of over 300 payment industry stakeholders with representatives from organizations across the US payment ecosystem, including financial institutions, non-bank payment providers, regulators, standards bodies, consultants, businesses (merchants and corporates), and consumer groups.

The Federal Reserve assembled the task force in May 2015 to collaboratively identify and evaluate alternative approaches to implementing safe, ubiquitous, faster payments capabilities in the United States.

Faster, or real-time payments was a relatively new concept in the US in the 2015 timeframe, but one which we had observed and learned from other instant payment platforms that had already emerged in other parts of the world. Some US-based non-bank payment platforms had already started to emerge where funds could be immediately used by the payees, but for those transacting through bank accounts, they took up to 2-3 business days.

The pressure was on to develop a more holistic approach for the country that would serve needs well into the future. The Faster Payments Task Force focused its efforts on identifying goals and attributes of effective faster payment systems; proposing solutions and assessing their capability to achieve those goals; and championing the US payment industry to take steps toward implementation and adoption of faster payments capabilities.

Prior to my retiring from the Fed in early 2019, we had set the stage for a new realm of payments; instant payments that would immediately provide available funds and simultaneously settle between the financial institutions of payor and payee of transactions.

I was proud to be a part of our nation’s collective efforts to design and implement faster payment capabilities for our country.

Now, I am thrilled to endorse the collaborative effort put forth to develop this book that documents the faster/instant payments history and that explains what payments practitioners should know about:

• The history of faster/instant/real-time payments in the US

• What instant payments are

• How they work and differ from other payments

• Who are the stakeholders that enable it and for who will this be used by

• Why are they important and what they can be used for (.i.e. the use cases)