IDEAS home Printed from https://ideas.repec.org/p/fip/fedkpw/psrwp04-03.html
   My bibliography  Save this paper

The supervisory framework surrounding nonbank participation in the U.S. retail payments system : an overview

Author

Listed:
  • Richard J. Sullivan

Abstract

Nonbank providers of payment services are important in the United States and appear to have become more prominent in recent years. This development, by itself, poses unique risks to the payments system. Associated with this change is a significant transformation in the mix of payment types away from checks and towards electronic payments, which introduces new risks to the payments system and potentially compounds the risks posed by increased reliance on nonbank providers of payment services. This paper reviews these recent developments in the retail payments system, discusses the associated risks, and presents an overview of the supervision of nonbank providers of payment services. Policies aimed at controlling risk in the retail payments system need to better address an increasing level of information asymmetries, externalities, and coordination problems. Policy tools such as standards setting, disclosure, clarifying legal responsibilities, and supervision can each play a role in improving control of payments system risk. To guide policy reforms, it would be useful to collect more information on the sources, extent and cost of disruptions to payment systems associated with nonbank payment providers.

Suggested Citation

  • Richard J. Sullivan, 2006. "The supervisory framework surrounding nonbank participation in the U.S. retail payments system : an overview," Payments System Research Working Paper PSR WP 04-03, Federal Reserve Bank of Kansas City.
    • Handle: RePEc:fip:fedkpw:psrwp04-03
    as

    Download full text from publisher

    File URL: http://www.kansascityfed.org/publicat/psr/rwp/Sullivan_Supervision_nonbank_pmt_providers_WP0403.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kim McPhail, 2003. "Managing Operational Risk in Payment, Clearing, and Settlement Systems," Staff Working Papers 03-2, Bank of Canada.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jean-Charles Rochet, 2007. "Some economics of horizontal integration in the payments industry," Proceedings – Payments System Research Conferences, Federal Reserve Bank of Kansas City.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ripatti, Kirsi, 2004. "Central counterparty clearing : constructing a framework for evaluation of risks and benefits," Research Discussion Papers 30/2004, Bank of Finland.
    2. anonymous, 2007. "Nonbanks and risk in retail payments," Payments System Research Working Paper PSR WP 07-02, Federal Reserve Bank of Kansas City.
    3. Ripatti, Kirsi, 2004. "Central counterparty clearing: constructing a framework for evaluation of risks and benefits," Bank of Finland Research Discussion Papers 30/2004, Bank of Finland.
    4. Heinrich, Gregor, 2006. "Operational risk, payments, payment systems, and implementation of Basel II in Latin America : recent developments," MPRA Paper 47420, University Library of Munich, Germany.
    5. Aleksandra Bradic Martinovic, 2011. "Systemic Risks Control Aa a Determinant of Payment Systens Development in WB Countries," Book Chapters, in: Stefan Bogdan Salej & Dejan Eric & Srdjan Redzepagic & Ivan Stosic (ed.), Contemporary Issues in the Integration Processes of Western Balkan Countries in the European Union, chapter 26, pages 424-442, Institute of Economic Sciences.
    6. repec:zbw:bofrdp:2004_030 is not listed on IDEAS
    7. Abdullah Aloqab & Farouk Alobaidi & Bassam Raweh, 2018. "Operational Risk Management in Financial Institutions: An Overview," Business and Economic Research, Macrothink Institute, vol. 8(2), pages 11-32, June.
    8. Kirsi Ripatti, 2005. "Central counterparty clearing: constructing a framework for evaluation of risks and benefits," Finance 0508021, University Library of Munich, Germany.
    9. Richard J. Sullivan, 2007. "Risk management and nonbank participation in the U.S. retail payments system," Economic Review, Federal Reserve Bank of Kansas City, vol. 92(Q II), pages 5-40.
    10. Paolo Casini, 2010. "The industrial organization of financial services in developing and developed countries," ULB Institutional Repository 2013/210176, ULB -- Universite Libre de Bruxelles.
    11. Gregor Heinrich, 2006. "Riesgo operacional, pagos, sistemas de pago y aplicación de Basilea II en América Latina: evolución más reciente," Boletín, CEMLA, vol. 0(4), pages 191-204, Octubre-d.

    More about this item

    Keywords

    Nonbank financial institutions;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedkpw:psrwp04-03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Zach Kastens (email available below). General contact details of provider: https://edirc.repec.org/data/frbkcus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.