Washington, D.C. – In a recent discussion, Federal Reserve Governor Christopher Waller highlighted the complexities and challenges the U.S. faces in developing and expanding its fast payment systems, in contrast to the more advanced systems seen in countries like India. While there is an interest in interlinking payment systems internationally, Waller emphasized that the U.S. still has significant work to do before it can fully integrate with global fast payment networks.
Waller pointed out that the U.S. payment infrastructure is still in its developmental stages, making it difficult to establish meaningful connections with more developed systems abroad. “Our system isn’t developed yet, so you’re going to connect it to a bridge to nowhere because nothing’s going to move until we get our system completely built up,” Waller explained, stressing that the U.S. is still several years away from reaching a level where international payment linkages would be beneficial.
The conversation touched upon India’s advanced fast payment technology and whether there might be opportunities for technology transfer or partnership to bolster the U.S. payment ecosystem. Waller acknowledged that while technology interlinking is relatively straightforward, the real challenges lie in the legal, governance, and rule-making processes. “The technology part of interlinking is actually the easiest part. The hard part is the legal, the governance, rule-making, and that requires people to sit down in a room and agree on the way things are going to get done,” Waller noted.
The governor also discussed the broader implications of fast payment systems and the potential impact on the U.S. financial landscape. He mentioned that while the U.S. banking system has stabilized since the crisis of March 2023, the expansion and integration of fast payment systems remain a complex issue that will require careful planning and international cooperation.
As the U.S. continues to develop its fast payment infrastructure, the experiences of countries like India offer valuable lessons. However, Waller’s comments make it clear that the road to a fully functional and globally integrated payment system in the U.S. is still a long one, with significant challenges ahead.
This cautious outlook underscores the need for a measured approach, focusing not only on technological advancements but also on the critical governance and legal frameworks that will support a robust and reliable payment system in the future.
