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Nonbanks in the payments system

Author

Listed:
  • Terri Bradford
  • Matt Davies
  • Stuart E. Weiner

Abstract

Nonbanks have always been a key component of the nation's payments system. In recent years, however, nonbanks have become even more prominent. This heightened visibility raises several questions. In which payments activities are nonbanks engaged? What roles do nonbanks play in specific payments types? What types of risk are potentially associated with nonbank participation? This paper begins to address these questions. Preliminary findings include: (1) Nonbanks are involved in a myriad of activities and roles, both in traditional and emerging payments types; (2) Nonbank business relationships with banks and other participants in the payments systems are often highly complex and interrelated; (3) Nonbanks are rarely directly involved in settlement activities and, hence, appear to be associated with limited settlement and systemic risk; (4) Both nonbanks and banks appear to be increasingly susceptible to operational risk factors. ; Published as a book in 2003.

Suggested Citation

  • Terri Bradford & Matt Davies & Stuart E. Weiner, 2002. "Nonbanks in the payments system," Payments System Research Working Paper PSR WP 02-02, Federal Reserve Bank of Kansas City.
  • Handle: RePEc:fip:fedkpw:psrwp02-02
    as

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    File URL: http://www.kansascityfed.org/publicat/psr/BksJournArticles/NonBankPaper.pdf
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    References listed on IDEAS

    as
    1. De Bandt, Olivier & Hartmann, Philipp, 2000. "Systemic risk: A survey," Working Paper Series 0035, European Central Bank.
    2. Glaessner, Thomas & Kellermann, Tom & McNevin, Valerie, 2002. "Electronic security - risk mitigation in financial transactions : public policy issues," Policy Research Working Paper Series 2870, The World Bank.
    3. Geoffrey R. Gerdes & Jack K. Walton, 2002. "The use of checks and other noncash payment instruments in the United States," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Aug, pages 360-374.
    4. Fumiko Hayashi & Richard J. Sullivan & Stuart E. Weiner, 2006. "A guide to the ATM and debit card industry - 2006 update," Monograph, Federal Reserve Bank of Kansas City, number 2006agttaadci2, Jan 17.
    5. Gianni De Nicolo & Myron L. Kwast, 2002. "Systemic Risk and Financial Consolidation; Are they Related?," IMF Working Papers 02/55, International Monetary Fund.
    6. De Nicolo, Gianni & Kwast, Myron L., 2002. "Systemic risk and financial consolidation: Are they related?," Journal of Banking & Finance, Elsevier, vol. 26(5), pages 861-880, May.
    7. Dow, James, 2000. "What Is Systemic Risk? Moral Hazard, Initial Shocks, and Propagation," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 18(2), pages 1-24, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. repec:col:000174:016024 is not listed on IDEAS
    2. Nicholas Economides, 2007. "Nonbanks in the payments system: vertical integration issues," Proceedings – Payments System Research Conferences, Federal Reserve Bank of Kansas City.
    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. Catharine Lemieux, 2003. "Network vulnerabilities and risks in the retail payment system," Emerging Issues, Federal Reserve Bank of Chicago.
    5. Paul Kellogg, 2003. "Evolving operational risk management for retail payments," Emerging Issues, Federal Reserve Bank of Chicago.
    6. Mariotto, Carlotta & Verdier, Marianne, 2015. "Innovation and competition in Internet and mobile banking: an industrial organization perspective," Research Discussion Papers 23/2015, Bank of Finland.
    7. Tara Rice, 2003. "The importance of payments-driven revenues to franchise value and in estimating bank performance," Emerging Issues, Federal Reserve Bank of Chicago.
    8. Carlotta MARIOTTO & Marianne VERDIER, 2015. "Innovation and Competition in Internet and Mobile Banking: an Industrial Organization Perspective," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(99), pages 129-146, 3rd quart.
    9. Massimo Cirasino & Mario Guadamillas & José Antonio García & Fernando Montes-Negret, 2007. "Reforming Payments and Securities Settlement Systems in Latin America and the Caribbean," World Bank Publications, The World Bank, number 6630.
    10. Richard J. Sullivan, 2007. "Risk management and nonbank participation in the U.S. retail payments system," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 5-40.
    11. repec:lde:journl:y:2018:i:88:p:109-153 is not listed on IDEAS

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