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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

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    Cited by:

    1. repec:zbw:bofrdp:2015_023 is not listed on IDEAS
    2. Ortega, Fabio & León, Carlos, 2018. "Las transferencias procesadas por ACH Colombia: un análisis desde la perspectiva de topología de redes," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue 88, pages 109-153, January.
    3. Nicholas Economides, 2007. "Nonbanks in the payments system: vertical integration issues," Proceedings – Payments System Research Conferences, Federal Reserve Bank of Kansas City.
    4. 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.
    5. Catharine Lemieux, 2003. "Network vulnerabilities and risks in the retail payment system," Emerging Issues, Federal Reserve Bank of Chicago.
    6. Paul E. Kellogg, 2003. "Evolving operational risk management for retail payments," Emerging Issues, Federal Reserve Bank of Chicago.
    7. 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.
    8. Tara N. Rice, 2003. "The importance of payments-driven revenues to franchise value and in estimating bank performance," Emerging Issues, Federal Reserve Bank of Chicago.
    9. 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.
    10. 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 - Books, The World Bank Group, number 6630.
    11. 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.
    12. Fabio Ortega & Carlos León, 2018. "Transfers processed by ACH Colombia: a network topology analysis," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 88, pages 109-153, Enero - J.

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