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Fed Seeking Feedback on Payment Use Cases

  • By Andrew Deichler
  • Published: 5/10/2017

NASHVILLE, Tenn.--Tuesday morning during the latest meeting of AFP’s Treasury Advisory Group, Guy Berg, Vice President of Standards and Outreach Group for the Federal Reserve Bank of Minneapolis, provided an update on the Secure Payments Task Force. To improve the payments security of the United States payments system, the Fed is attempting to get all stakeholders on the same page.

Berg noted that the one thing that has proven incredibly difficult is getting all the stakeholders to look at fraud the same way. “You have all these stats, and they’re all pulled together slightly differently, and it is highly challenging to consolidate the data and maintain integrity,” he said. “That’s one of the areas that the Secure Payments Task Force is trying to tackle.”

For example, it is currently unclear how much ACH fraud is actually out there. “A lot of people say there’s almost no fraud in the ACH system, and some would say there’s a lot,” Berg said. “One of the things that’s come out is that there is not a clear enough, systematic reporting mechanism for ACH fraud.”

He added that in an ACH transaction, from the originator to the recipient, there typically isn’t anyone interfering. “But what’s happening is, it’s on the fringes,” he said. “If you think about it, the credit card systems could say the same thing. Once the transaction enters the processing network rails, there isn’t a lot of fraud. No one is getting into that pipeline and manipulating or stealing data. What is happening is attacks and manipulations are happening around the edges.”   

Payment use cases

As part of the Task Force’s effort to get stakeholders on the same page , it has documented a set of payment use cases that map out the lifecycle of a payment for eight select payment types—ACH, card not present, card PIN, card signature, check, contactless, wallet and wire. Each use case includes the unique payment flow overview, the payment type operation, an overview of security methods and associated risks, the inventory of sensitive payment data and associated risks, and an overview of standards.

“The Task Force has documented these use cases in extraordinary detail, and is planning to make that information available for the industry to access,” Berg said. “And keep in mind, this is industry driven; it’s not the Fed. The Fed really is not putting a statement out there saying, ‘This is where we should be,’ other than the broad statement that we want to foster the speed, security and integrity of payments systems.”

The Task Force is seeking industry feedback on these use cases, to gauge how different stakeholders will use this information. Treasury and finance professionals are encouraged to participate in the Task Force. “Gathering feedback from stakeholders is very important, as it provides insights you many not otherwise get,” noted Magnus Carlsson, AFP’s manager of treasury and payments. “It is also an opportunity for stakeholders make an impact on the final outcome of the research.”

Practitioners who would like to contribute feedback must complete the online survey by Friday, May 19.

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