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The Federal Reserve's role in retail payments: adapting to a new environment

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Author Info
Stuart E. Weiner
Abstract

The U.S. retail payments system is in the midst of a transformation. The shift from paper to electronics, the emergence of new instruments and payments channels, the rise in nonbank participation, the change in risk profiles—all are elements of this new landscape. The Federal Reserve takes as one of its mandates fostering a payments system that is safe, efficient, and accessible. How does the Federal Reserve fulfill this mandate in this new environment? ; Since its beginning, the Federal Reserve has played a crucial role in the U.S. retail payments system. From time to time, that role has been reevaluated The current environment suggests the time may be right for another examination. Other central banks are facing similar issues. ; Weiner reexamines the Federal Reserve’s role in retail payments in light of the evolving payments system. The Federal Reserve will likely continue to play an important role in retail payments. However, given the evolution of the payments system, the role the Federal Reserve plays and the rationale for this role may be different than they have been in the past.

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Article provided by Federal Reserve Bank of Kansas City in its journal Economic Review.

Volume (Year): (2008)
Issue (Month): Q IV ()
Pages: 35-63
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Handle: RePEc:fip:fedker:y:2008:i:qiv:p:35-63:n:v.93no.4

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  1. Gary H. Stern, 2005. "Economic research and the role of the Federal Reserve in payments," The Region, Federal Reserve Bank of Minneapolis, issue Dec, pages 2-6.
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