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Interoperability and Why it is Dominating the Faster Payments Conversation


Reed Luhtanen, Executive Director, FPC.

June marks the midpoint of the year. While it seemed like 2020 would never come to an end, 2021 is moving along at lightning speed. And the FPC seems to be keeping pace with it, having accomplished so much already this year: the launch of two new Work Groups, the release of three new member resources, the introduction of the “Off the Rails” podcast, and a successful Spring Conference, with more in the pipeline for the coming weeks and months.

But through all of these work efforts, there has been a recurring theme: interoperability. And one of our most recent podcasts, which recaps the 2021 FPC Spring Conference where interoperability was a focus, illuminates two key reasons interoperability continues to trend.  

First and foremost, studies show the importance of interoperability to faster payments stakeholders. The FPC’s 2019 and 2020 Faster Payments Barometer research revealed more than 70 percent of stakeholders think achieving interoperability is important. The topic continues to rise up in dialogue, so we focused our most recent research effort with Glenbrook Partners on the “why” behind interoperability and “how” it can be achieved in the United States, the results of which will be released in the coming weeks. While the research identifies potential models for achieving interoperability, based on lessons learned from other geographies, Elizabeth McQuerry, Partner at Glenbrook, reinforced the fact that “there is no single model of interoperability that works everywhere. Context matters a lot. And what you are trying to achieve matters a lot.” 

Take, for example, directories. We can’t have a conversation about them without a mention of interoperability. Interoperable directories are like the holy grail of faster payments. Fran Duggan, CEO of Payrailz agrees, “If we had a way to control to make sure that payments could be routed correctly, that ability to know what you could send, where, and having confidence it would go to the right place, is just huge for the industry.”

Or consider cross-border faster payments. Dave Scola, Chief Executive, Americas and UK of SWIFT, identifies interoperability as a key strategy to facilitate international faster payments. And to that end, he shares SWIFT has been “working with international organizations to ensure there is some level of consistency on standards so that when we look to hook up the domestic RTP schemes to communicate internationally, we are all speaking the same language.”

While interoperability has been a hot topic since the inception of faster payments, this latest round of dialogue at our Spring Conference emphasized a growing urgency for solutions. With faster payments volume climbing, the topic will continue to dominate conversations, as users look for a more seamless and fluid faster payments experience. 

That’s why interoperability will remain a key focus area for the FPC for some time to come. We’ll continue to provide the venues and resources to facilitate dialogue around this topic, and we encourage you to provide honest and diverse feedback to support the right next steps on this challenging topic. Together, we will identify the best path forward. 

For more information or to become a member, visit fasterpaymentscouncil.org/Why-Join-the-FPC
 
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