As the push for faster payments in the U.S. intensifies, and as a variety of businesses enter the payments space, banks continue to have a “key role” in facilitating payment innovations, Federal Reserve Governor Jerome Powell said in a New York speech yesterday. “Even where this reality is obscured by several layers of technology, there is almost always a bank involved in consumer transactions.”
The role banks play in holding and transferring funds makes them central to “the design and safety of more efficient retail payment systems,” he said. “Without bank participation, it would be difficult to change how funds are transferred in a way that brings pervasive benefits to consumers.” Powell highlighted the role of banks in the Fed’s Faster Payments Task Force and Secure Payments Task Force — which included numerous American Bankers Association members and staffers.
Powell added that the Fed is continuing its secure payments work with a study, to be launched next year, into payment security vulnerabilities and work groups to address those vulnerabilities.