Payments ==> {a network of networks}

Payments rail: an individual payment network or platform that moves money from a payer to a payee.

Overall industry trends moving towards faster payments. Interoperability across systems becoming more important.

Retail vs. Wholesale payment systems

  • Retail Payments: generally refer to B2C and P2P type transactions.
    • Largest percentage of all payments by count, smallest by dollar value
    • Non-cash payments are processed across a variety of systems: check clearing systems, ACH, credit and debit card networks, payment networks (Paypal, Square, etc.)
    • Almost all non-cash payment instruments settle electronically
  • Wholesale Payments: generally refer to settlement activity between interbank transactions on very large payments => typically initiated by government agencies, institutional banks, very large corporations, etc.
    • Smallest percentage of all payments by count, largest by dollar value.
    • Main arteries of the country’s economy
    • Two large-value electronic funds transfer systems settle the bulk of all payments by dollar value, in the US => CHIPS & Fedwire.

Open-loop - Open-loop” - payments are connected directly to a personal account, rather than relying on a prepaid balance Closed-loop -

Federal Reserve Data

Federal Reserve Payments Study (FRPS)

Quantifies aggregate payment volumes in the US. (about FRPS)

FedNotes - Consumer Payment Choice

Report on US consumer payment preferences

Other Reports