Search Results
Journal Article
Small business lending by commercial banks in Colorado : 1994 to 1996
The structure of Colorado's banking industry has recently undergone significant change and, therefore, provides a good case study with which to gauge the impact of consolidation on sources of loans and access to credit for small business. We find that between 1994 and 1996, lending to small businesses in Colorado by small to medium size banking organizations grew much faster than lending by large organizations. This lending pattern was similar across in-state and out-of-state banking organizations. Thus, the difference is largely driven by size rather than by the location of the ...
Briefing
Payment services and the evolution of Internet banking
A review of bank web sites conducted by Payments System Research staff shows how essential online banking has become to the payments system.
Journal Article
The impact of debit card regulation on checking account fees
Starting in 2011, when new regulations capped the interchange fees paid to banks for debit card transactions, some news reports predicted banks might increase checking account fees. The cap reduced many banks' revenue and the concern was that they might offset their losses by charging more for checking accounts. Sullivan examines data from broad samples of banks and finds that many large banks raised fees?but among the thousands of smaller banks that had been exempted from the regulations, some raised fees while others lowered them. On net, consumer access to free checking actually increased. ...
Journal Article
Understanding risk management in emerging retail payments
New technologies used in payment methods can reduce risk, but they can also lead to new risks. Emerging retail payments are prone to operational and fraud risks, especially security breaches and potential use in illicit transactions. This article describes an economic framework for understanding risk control in retail payments. Risk control is a special type of good because it can protect one payment participant without diminishing the protection of other participants. As a result, the authors' economic framework emphasizes risk containment, primarily through the establishment and enforcement ...
Working Paper
Internet banking: an exploration in technology diffusion and impact
This paper studies endogenous diffusion and impact of a cost-saving technological innovation -- Internet Banking. When the innovation is initially introduced, large banks have an advantage to adopt it first and enjoy further growth of size. Over time, as the innovation diffuses into smaller banks, the aggregate bank size distribution increases stochastically towards a new steady state. Applying the theory to a panel study of Internet Banking diffusion across 50 US states, we examine the technological, economic and institutional factors governing the process. The empirical findings allow us to ...
Journal Article
Risk management and nonbank participation in the U.S. retail payments system
The retail payments system in the United States has changed significantly in recent years. Advances in technology have caused a greater reliance on electronic payment networks. And the industrial structure of the payment services industry has evolved, as more and more nonbanks deliver payment products to end users and supply back-end processing. In general, these changes have made the payments system more efficient and given more choices to consumers and more payment options to merchants and businesses. ; At the same time, however, the rapid pace of change has introduced new risks to the ...
Briefing
The Benefits of Collecting and Reporting Payment Fraud Statistics for the United States
This article argues that publication of fraud statistics helps the payment industry to coordinate security efforts, provides useful information for policymakers, and helps to promote consumer confidence in payments. However, while other countries regularly publish such statistics, it is an open question whether they will become available in the United States.
Journal Article
The changing nature of U.S. card payment fraud: industry and public policy options
As credit and debit card payments have become the primary payment instrument in retail transactions, awareness of identity theft and concerns over the safety of payments has increased. Traditional forms of card payment fraud are still an important threat, but fraud resulting from unauthorized access to payment data appears to be rising, and we are only beginning to get a sense of the dimensions of the problem. ; Thus far, the role of public policy has been to encourage the card payment industry to limit fraud by developing its own standards and procedures. Whether this policy stance is ...
Journal Article
The Federal Reserve’s reduced role in retail payments: implications for efficiency and risk
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 ...
Journal Article
How has the adoption of Internet banking affected performance and risk in banks?
Analysis of banks in Tenth District states that have adopted Internet banking shows an adoption rate that is similar to the rate for the United States. Community banks, especially in rural areas, are lagging behind other banks in introducing Internet banking. ; Banks that have adopted Internet banking have introduced it in markets with demographic and economic characteristics that help to ensure customer acceptance. They have also used the Internet in a way that complements their business strategy. Banks who offer Internet banking rely more on non-core funding, and are developing the Internet ...