IDEAS home Printed from https://ideas.repec.org/a/fip/fedker/y2007iqiiip83-106nv.92no.3.html
   My bibliography  Save this article

Nonbanks in the payments system: innovation, competition, and risk - a conference summary

Author

Listed:
  • Richard J. Sullivan
  • Zhu Wang

Abstract

From the early days of automated card sorting to the more recent times of the Internet and check imaging, payments and payments processing have continually embraced new technology. At the same time, the industry has been shaped by its share of entry and exit, through startups, mergers, and the reorganization of businesses seeking the proper scope of horizontal and vertical integration. ; These changes have enabled nonbank organizations to play a larger role in the payments system. Nonbanks have followed a number of pathways to more prominence: purchasing bank payment processing subsidiaries, carving out niches in the payments market through innovation, and taking advantage of economies of scale made possible by shifting to electronic forms of payment. ; Nonbanks have introduced some of the most far-reaching innovations to the payments system in recent years, leading to greater efficiencies in payments processing. At the same time, nonbanks have changed the dynamics of competition in payments, leading to a significant change in the system’s risk profile. ; Sullivan and Wang summarize the proceedings of a conference on nonbanks in the payments system held by the Federal Reserve Bank of Kansas City in Santa Fe, New Mexico, on May 2-4, 2007. The conference addressed many of the key questions raised by the growing presence of nonbanks in payments, including: Have recent payment innovations been more likely to come from nonbanks? Have nonbanks improved or harmed competition in payments? Have nonbanks increased risk or helped to develop tools to manage it? How should public policy respond as increasingly more activity in payments lies outside of the banking system?

Suggested Citation

  • Richard J. Sullivan & Zhu Wang, 2007. "Nonbanks in the payments system: innovation, competition, and risk - a conference summary," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 83-106.
  • Handle: RePEc:fip:fedker:y:2007:i:qiii:p:83-106:n:v.92no.3
    as

    Download full text from publisher

    File URL: http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/3q07sullivan.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Garcia-Mila, Teresa & McGuire, Therese J., 1993. "Industrial mix as a factor in the growth and variability of states' economies," Regional Science and Urban Economics, Elsevier, vol. 23(6), pages 731-748, December.
    2. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, pages 174-183.
    3. Grinols,Earl L., 2004. "Gambling in America," Cambridge Books, Cambridge University Press, number 9780521830133, December.
    4. Nancy Novack & Jason Henderson, 2007. "Can ethanol power the rural economy?," Main Street Economist, Federal Reserve Bank of Kansas City, issue 1.
    5. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    6. Kelly D. Edmiston, 2006. "A new perspective on rising nonbusiness bankruptcy filing rates : analyzing the regional factors," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 55-83.
    7. Georgeanne M. Artz & Kenneth E. Stone, 2006. "Analyzing the Impact of Wal-Mart Supercenters on Local Food Store Sales," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(5), pages 1296-1303.
    8. Robert B. Penfold, 2006. "Covariance Risk and Employment Growth in Canadian Cities," Growth and Change, Wiley Blackwell, vol. 37(1), pages 60-81.
    9. Ranald Richardson & Andrew Gillespie, 2003. "The Call of the Wild: Call Centers and Economic Development in Rural Areas," Growth and Change, Wiley Blackwell, vol. 34(1), pages 87-108.
    10. Chad R. Wilkerson, 2005. "What do expected changes in U.S. job structure mean for states and workers in the Tenth District?," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 59-93.
    11. Chad R. Wilkerson & Megan D. Williams, 2006. "Minority workers in the Tenth District: rising presence, rising challenges," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 31-59.
    12. Mark Drabenstott & Mark Henry & Kristin Mitchell, 1999. "Where have all the packing plants gone? : the new meat geography in rural America," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 65-82.
    13. Mark D. Partridge & Dan S. Rickman, 1996. "The Role Of Industry Structure, Costs, And Economic Spillovers In Determining State Employment Growth Rates," The Review of Regional Studies, Southern Regional Science Association, vol. 26(3), pages 235-264, Winter.
    14. Robert W. Gilmer, 1996. "Industrial structure in oil cities: diversification revisited," Houston Business, Federal Reserve Bank of Dallas, issue May.
    Full references (including those not matched with items on IDEAS)

    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:fedker:y:2007:i:qiii:p:83-106:n:v.92no.3. See general information about how to correct material in RePEc.

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

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.