Reed Luhtanen, Executive Director, FPC
It’s been a productive year to date for the FPC. In the way of major reports, we’ve issued the Faster Payments Barometer, our annual survey gauging progress and perceptions around faster payments, use cases, trends, and challenges. The FPC also published its Solution Providers Catalogue, a detailed listing of faster payments solutions, products, and services currently offered by FPC members. And, we released the Faster Payments Fraud Survey and Report, developed by the FPC’s Fraud Information Sharing Work Group (FISWG), which reveals results from our first faster payments fraud survey.
And the production hasn’t stopped. We just released the first deliverable from our Real-Time Recurring Work Group, the Beneficial Characteristics of Real-Time Recurring Payments white paper, which offers insight into the necessary criteria for a real-time recurring payment program. While the properties discussed in the paper, such as authorization, authentication, irrevocability, and others, are applicable to real-time payments today, the paper details the unique benefits to each participant (consumer, biller, financial institutions, etc.) when applied in a real-time recurring environment.
This paper speaks directly to market trends. According to data, consumer spending on the top 100 subscription-based applications, which require recurring payments, rose 25 percent in the U.S. and 30 percent globally in 2021. In addition, globally, stakeholders are exploring real-time recurring payments For instance, according to a recent article in PaymentsJournal, the U.K. points to real-time recurring payments as a “real game-changer, as it allows long-lived consent to licensed third parties to initiate payments on the customer’s behalf with a specific instruction set.”
As we consider global use cases, the FPC’s Cross-Border Payments Work Group has created a Bulletin – the first in an ongoing series – as another timely resource. These Bulletins are designed to educate the payments industry on the developments of Central Bank Digital Currencies (CBDCs) and their impacts on cross-border faster payments, with the first issue providing an overview of CBDCs, how they can impact cross-border payments, potential models to facilitate cross-border payments, and more. Given the recent issuance of the President’s Executive Order on Ensuring Responsible Development of Digital Assets, which has the United States exploring a CBDC, the fact that currently nine countries, The Bahamas, Nigeria, and seven countries in Eastern Caribbean, have issued a CBDC, and another 78 countries are exploring one, this topic warrants our attention. The Cross-Border Payments Work Group Bulletins will serve as a key educational resource moving forward, and while the first Bulletin is a Members-only resource, subsequent Bulletins will be made available to the industry via the Faster Payments Knowledge Center.
Activities in the faster payments landscape continue to heat up, and the FPC and its Work Groups are responding through ongoing education, resources, and information. We encourage you to be on the lookout for even more resources from the FPC and our Work Groups. Because if you agree that the first half of the year was busy, just wait until you see what’s still to come in 2022!