Association for Financial Professionals Meets With Federal Reserve to Discuss Evolving Payments Systems

BETHESDA, MD - FEBRUARY 12, 2004 - The importance of ensuring that electronic payments are both effective and efficient was a key point at a recent meeting of the Association for Financial Professionals (AFP) and the Federal Reserve. The nation's payment system is moving toward greater use of electronic payments, and the challenge for the Federal Reserve, the financial services industry and AFP members is to advance this evolution in ways that work for all system participants.

Representing the nation's treasury professionals, AFP regularly provides the corporate viewpoint on payments policy issues to policy makers. The Federal Reserve-AFP meeting, held in Washington, D.C. on February 3, provided an opportunity to obtain the corporate end-user perspective on the evolution of the nation's payments system.

Members of AFP's Payments Advisory Group and Government Relations Committee described to the Federal Reserve why and how their companies use the various payment methods - checks, ACH, wires, cards - and the barriers to more efficient use of electronic payments. Those barriers include legacy systems that cost too much to change, non-standard remittance information that cannot be integrated with accounts payable and receivable systems, and low corporate priority for technology spending on payments. Banks' check services - for example, data entry at the lockbox, positive pay to control fraud - work well today. Moreover, many companies do not want to disrupt customer relations by asking for a change in payment method without a sound business reason to do so.

"The Federal Reserve welcomes the opportunity to learn about the key concerns of first-hand users of the payments system. This is especially important today, as these users must negotiate a migration from a largely paper-based system to a more electronic-based system of payments," said James M. Lyon, first vice president of the Federal Reserve Bank of Minneapolis. "The AFP's organizational membership, of both large and small companies, as well as financial intermediaries, provides a useful opportunity for Federal Reserve leadership to engage in an open exchange of ideas on these and other matters confronting our nation's payments system."

"AFP's members rely on a secure and efficient payment system as the essential foundation of every business transaction," said Douglas E. Downey, CTP, assistant vice president of HCA, Inc., and chairman of AFP's Payments Advisory Group. "We appreciate the opportunity to provide the corporate user perspective to the Federal Reserve. AFP and its Payments Advisory Group will continue working with the Federal Reserve to promote a more effective and efficient electronic payments system."

The Association for Financial Professionals in Bethesda, Maryland, supports more than 14,000 individual members from a wide range of industries throughout all stages of their careers in various aspects of treasury and financial management. AFP is the preferred resource for financial professionals for continuing education, financial tools and publications, career development, certifications, research, representation to legislators and regulators, and the development of industry standards.