Faster Payments: Market Structure and Policy Considerations

Garth Baughman, Fumiko Hayashi, Mark D. Manuszak, Aaron Rosenbaum, Joanna Stavins and Kylie Stewart
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Mark D. Manuszak: https://www.federalreserve.gov/econres/mark-d-manuszak.htm

No 2017-100, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: The U.S. payments industry is in the process of developing ubiquitous, safe, faster electronic solutions for making a broad variety of business and personal payments. How this market for faster payments will evolve will be shaped by a range of economic forces, such as economies of scale and scope, network effects, switching costs, and product differentiation. Emerging technologies could alter these forces and lead to new organizational arrangements or market structures that are different from those in legacy payment markets to date. In light of this uncertainty, this paper examines three hypothetical market structures that may emerge: a dominant-operator environment, a multi-operator environment, and a decentralized environment. Each of these market structures has different implications for the public policy objectives of efficiency, safety, and ubiquity. The paper also considers tools to promote positive outcomes in each market structure.

Keywords: Faster payments; Market structure and competition; Payment system improvement; Public policy; Retail payments (search for similar items in EconPapers)
JEL-codes: D4 E42 G2 L1 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2017-09-25
New Economics Papers: this item is included in nep-com, nep-mac, nep-mkt, nep-mon and nep-pay
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https://www.federalreserve.gov/econres/feds/files/2017100pap.pdf (application/pdf)

Related works:
Working Paper: Faster payments: market structure and policy considerations (2017)
Working Paper: Faster Payments: Market Structure and Policy Considerations (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2017-100

DOI: 10.17016/FEDS.2017.100

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