To support the development and roll out of new payment systems in the US, the US Federal Reserve last year launched the Faster Payments Task Force. The task force seeks to promote faster payment capabilities throughout the country, as well as assess proposals for improved payment systems. To support the assessment process, McKinsey & Company has been called in.
A safe and efficient payment system has the potential, among others, to reduce payment barriers for underserved US citizens and speed up domestic and international trade. New technologies have, in recent years, created considerable potential for disruptive new payment systems – as well as bringing new problems along with them, surrounding network and personal data security.
The US Federal Reserve, in a bid to stimulate the development of the payment systems landscape, set up a 331-member Faster Payments Task Force in 2015. The task force seeks to create a framework for the development of a new payment system, including a range of 36 criteria for systems, as well as assess options – proposed by stakeholders – that would achieve the desired outcomes. The Fed taskforce, in addition, examines policy issues surrounding a proposed new payment system, leverage stakeholder input and analysis, identify effective approaches for implementing faster payments, and support stakeholder efforts to implement new systems.
To support the assessment process, the task force has called in McKinsey & Company. The firm was selected following a competitive process, and is funded by the Fed – although the figures have not been disclosed.
The consultancy firm is tasked with assessing the different payment system proposals against the 36 criteria developed by the task force, the process itself will be overseen by a committee within the task force. Following the assessment of proposals, the full task force will be able to provide input, in the form of review and comments, later in 2016, with the results from the process to be published in 2017. The final published document will, in addition, consider environmental factors – including business conditions and public policy – that impact the development of new payment systems.
"The process established by the task force ensures a fair, consistent, and quality assessment of solution proposals, while bringing forward task force members' comments and diverse perspectives," says Sean Rodriguez, the Federal Reserve's faster Payments Strategy Leader and Chair of the task force. "Importantly, the proposal assessments and the broader task force input are designed to enhance solution designs and help ensure that effective faster payments capabilities are implemented in the United States in a reasonable time frame."
"The task force members wanted a firm with broad payments expertise to assess proposals against the comprehensive effectiveness criteria they published in February," says Gordon Werkema, the Federal Reserve's Payments Strategy Director. "McKinsey was chosen through a competitive bid process that considered expertise, ability to conduct an independent assessment, proposed assessment approach, and cost."