If I had to summarize 2019, I’d call it a building year for the Faster Payments Council. We elected the first Board of Directors; held our very first Member Meeting; and hired the first official FPC staff members, to name a few activities, building on the strong organizational foundation laid by the Governance Framework Formation team in 2018.
Widening our scope to look across the broader faster payments ecosystem, we could still characterize the year as one of development. For example, the Clearing House’s RTP® Network experienced growth, adding new financial institutions so that the network now reaches 50% of all accounts in the U.S. And new and existing faster payments solutions increased in use. The Federal Reserve also announced its plans for a new real-time gross settlement system, enhancing the resiliency of and competitive options for the faster payments ecosystem.
But from development comes implementation, and my money is on 2020 becoming an action year as it relates to faster payments, with these three developments leading the charge:
- FedNow℠ will take shape. It doesn’t take a fortune-teller to predict that in 2020, we’ll be hearing from the Fed on its plans for FedNow. With industry input received in November 2019, the Fed will be able to share more detailed specifications of FedNow. As system characteristics are defined and developed, stakeholders will be able to better assess emerging payments opportunities and make informed decisions about how best to incorporate faster payments into their strategic plans.
- Ancillary technological developments, including artificial intelligence, biometrics and machine learning, will also play a more significant role in 2020. According to statistics, nearly 90% of organizations will be using biometrics by the end of 2020, and business adoption of AI-powered technologies is expected to triple by 2021. From fraud prevention to enhancing the customer experience, biometrics, machine learning, and artificial intelligence will play larger roles in safeguarding the integrity of faster payments and ensuring a tailored, simple, and frictionless end-user experience.
- The advent of 5G will increase customer expectations of speed. Building on 4G capabilities, 5G promises to deliver opportunities previously unimagined. And the industry is beginning to take note. So much so, that by 2021, two-thirds of large enterprises plan to deploy the technology. With faster connectivity, decreased latency, and increased opportunity for intelligence and data exchange, 5G can significantly enhance the transactional experience for end users, helping to drive further adoption and use of faster payments. It will serve as a means to reinforce our forward momentum as an industry.
So, for this year, while faster payments will continue to get, well, faster, it’s not exactly status quo. In 2020, the industry will enhance existing and new tools to enable a richer, safer, improved, and faster payments ecosystem. As an association, we too, will continue to capitalize on these opportunities to advance our faster payments agenda.
Over the past decade, the faster payments foundation has been set. And the Faster Payments Council’s mission is to build on that in 2020, ensuring we take actions that lead to a ubiquitous faster payments reality in the U.S.