U.S. Payment System Should Move to Real-Time Settlement, Finds EFTA

By a four-to-one margin, organizations in the electronic payments industry believe that the U.S. payment system should move to real-time settlement of transactions, according to a survey by the Electronic Funds Transfer Association (EFTA).
By Jake Safane(2147484770)
By a four-to-one margin, organizations in the electronic payments industry believe that the U.S. payment system should move to real-time settlement of transactions, according to a survey by the Electronic Funds Transfer Association (EFTA), trade group representing financial institutions, processors and others within the payments industry.

The Federal Reserve is currently working with the payments industry to determine if moving to real-time settlement is feasible, and 87% of those surveyed said that real-time is a realistic goal. And moving to real-time will not necessarily be a major technological overhaul, as 70% think the industry can modify existing systems to handle real-time payments, rather than creating new infrastructure.

Over half the respondents also said that the Fed should set deadlines for the industry to move to real-time, and 60% support the idea of developing a centralized directory of account and routing numbers to expedite settlement.

“Real-time payments will increase the efficiency of our payment systems,” says Kurt Helwig, president and CEO of the Electronic Funds Transfer Association. “It is important for us to work with the Fed Banks in order to adapt to changing technology in order to remain competitive within the global markets.”

However, moving to real-time is not without concern, as 60% said they worry about the ability to manage fraud within a real-time settlement framework.

“We support the Fed in its effort to determine the feasibility of this concept,” says Helwig. “However, there are a lot of details in the areas of fraud abatement, ROI and control to work out before you can get from concept to sub-second settlement.”

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