Dec 16 - The American Bankers Association strongly supports the need to provide market-driven, product choice within the payments system, the association said in a letter to the Federal Reserve today. The letter is in response to the Federal Reserve’s Payment System Improvement Public Consultation Paper issued in September.
“Technology is moving faster and faster and banks need to move just as fast to meet our customers’ needs with the same level of reliability, security and protection that they have come to expect,” said Jeff Plagge, president and CEO of Northwest Financial Corp. in Arnolds Park, Iowa.
In the letter, ABA said that the industry should focus on meeting customer needs when considering whether to upgrade legacy payment systems or create a totally new payment channel. In addition, the association placed great importance on system integrity, emphasizing the need for security and continued compliance with current regulations.
ABA also said that consumer protection and regulatory enforcement should be applied consistently to banks and non-banks alike.
“Payments are a serious business and any disruptions can have significant consequences,” said Plagge who is also chairman of ABA. “To protect the system, all payment providers should be held to the same high standards that banks meet.”
The association also identified the need for a system that allows competitive access to banks of all sizes.
Earlier this year, ABA’s Emerging Payments Advisory Group developed a guide for policymakers titled, The Changing Face of the Payments System. Similar to the letter sent to the Federal Reserve today, the guide identifies three key areas for consideration: consumer protections, payment system integrity and competitive equity.
To see the letter, click here.