IDEAS home Printed from https://ideas.repec.org/a/fip/fedker/y2012iqiiinv.97no.3x2.html
   My bibliography  Save this article

The Federal Reserve’s reduced role in retail payments: implications for efficiency and risk

Author

Listed:
  • Richard J. Sullivan

Abstract

The Federal Reserve’s role in clearing and settling retail payments has declined in recent years. This stems not only from the expanding role of private-sector organizations, but also from the ongoing shift by consumers from paper checks to debit cards. ; Some suggest it would be most efficient for the Federal Reserve to offer settlement services mainly for payments among financial institutions, while others believe it should stay involved in retail payments as well. ; Sullivan argues that the Federal Reserve’s role in settling retail payments may actually promote efficiency, by providing a check against high industry concentration. Its involvement in retail payment settlement also bolsters the system’s integrity, providing a backup in case of operational failures in the industry, promoting efforts to manage operational risk and providing safe interbank settlement services.

Suggested Citation

  • Richard J. Sullivan, 2012. "The Federal Reserve’s reduced role in retail payments: implications for efficiency and risk," Economic Review, Federal Reserve Bank of Kansas City, issue Q III.
  • Handle: RePEc:fip:fedker:y:2012:i:qiii:n:v.97no.3:x:2
    as

    Download full text from publisher

    File URL: http://www.kansascityfed.org/publicat/econrev/pdf/12q3Sullivan.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Charles M. Kahn & William Roberds, 2002. "The economics of payment finality," Economic Review, Federal Reserve Bank of Atlanta, issue Q2, pages 1-12.
    2. Nicholas Economides, 2006. "Competition Policy in Network Industries: An Introduction," Chapters,in: The New Economy and Beyond, chapter 5 Edward Elgar Publishing.
    3. David B. Humphrey & Robert M. Hunt, 2012. "Getting rid of paper: savings from Check 21," Working Papers 12-12, Federal Reserve Bank of Philadelphia.
    4. Fumiko Hayashi, 2003. "Community bank access to payment card networks : has it become more expensive?," Payments System Research Working Paper PSR WP 03-02, Federal Reserve Bank of Kansas City.
    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. Sullivan, Richard J., 2013. "The impact of debit card regulation on checking account fees," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 59-93.
    2. repec:col:000174:016024 is not listed on IDEAS
    3. Fabio Ortega & Carlos León, 2017. "Las transferencias compensadas por ACH Colombia: Un análisis desde la perspectiva de topología de redes," Borradores de Economia 990, Banco de la Republica de Colombia.
    4. repec:lde:journl:y:2018:i:88:p:109-153 is not listed on IDEAS

    More about this item

    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:fedker:y:2012:i:qiii:n:v.97no.3:x:2. 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.

    If CitEc recognized a 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.

    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.