Cooperation Key to Future of Payments

The U.S. payments system is facing a defining moment. New technologies and industry participants are changing users' perceptions of payments while regulatory initiatives designed to improve safety and to address expectations around speed and convenience have been introduced. Evolution is essential but the absence of appropriate dialog—between merchants, banks, payment processors and technology providers—in the development of new payments models means that meaningful advances in U.S. payments have been limited.

Incongruous efforts to improve payments have mostly thus far produced only niche benefits or, worse, caused new problems. If the U.S. is to create the payment system it needs for the 21st century, a new approach based on a simultaneous dialogue involving all parties is critical. To produce a smart system that meets the needs of all, stakeholders must accept that the challenges of the U.S. payment system cannot be solved by disparate efforts driven by the interests of any one group: a broader perspective is needed if true innovation is to prosper.

Payment Fundamentals Remain Unchanged

To lay the foundations for meaningful improvements in U.S. payments, stakeholders first need to recognize two incontrovertible truths. Firstly, there remain only five main ways in the U.S.—cash, check, card (debit or credit), ACH and wires—to settle any consumer or business transaction. Each of these has a unique set of infrastructure, rules, protocols, participants, and economics.