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Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.

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August 17, 2015


Pigskin and Payments

For those who know me well, they know that I find August to be the slowest-moving month of the year. It's not because of the oppressive southern heat and humidity, but rather it's my anticipation for football season. To help speed along the "dog days of summer," I generally read my fair share of prognostication publications. Alongside the predictions, improving player safety has become a key discussion topic as the season approaches.

Armed with data showing an increase in injuries as well as long-term negative effects from playing the sport, football's governing bodies on both the collegiate and professional levels are instituting rule changes to make the game safer. Equipment manufacturers are introducing new gear to improve safety and individual teams are adding new experts to their medical staffs all in the name of player safety.

Ironically, while there is a focus on improving player safety, football players continue to get stronger and faster aided by advancements in nutrition and workout regimes. As player strength and speed improves, this contact sport becomes more vicious and dangerous. And as a fan, I'll admit that I find watching a game featuring stronger and faster players more exciting. I do not want to see players injured, but at the same time I enjoy the excitement that comes with hard tackles and big hits.

Does this state of football sound at all like the current state of the U.S. payments industry? To make payments safer, public and private entities are leading literally hundreds of initiatives across various payments rails. Network rule changes are taking place and new technologies are being harnessed all in an effort to better secure payments. At the same time, start-ups, established payment companies, payment associations, and the Federal Reserve are collaborating to improve the speed of payments.

It's hard not to get excited about the possibilities of faster payments, from important just-in-time supplier payments to simple repayments for borrowing money from a friend or family member. However, can securing payments better derail the speed of payments? By way of example and personal experience, my more secure EMV (chip) credit card has clearly reduced the speed at the point-of-sale for my card payment transactions.

But just as player strength and speed has evolved alongside safety through rule-making and technology (think about leather football helmets here), I think we have seen the same progression within the payments industry. I think football remains as exciting as ever, and the payments expert in me is clearly excited about the future of payments.

Speed and safety are not to be viewed as mutually exclusive, and I am confident that the payments industry supports this view. In both football and payments, elements of risk will exist, regardless of safety measures in place. Finding the right balance between speed and safety should be the goal in order to maintain an exciting football game or efficient payments system. I can't wait to see what lies ahead on the gridiron and within the payments industry.

Photo of Douglas A. King By Douglas A. King, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed

August 17, 2015 in emerging payments , EMV , fraud , innovation , risk management | Permalink

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