Nonbanks are becoming increasingly prominent in payments systems around the world. What are the implications of this heightened presence for innovation, competition, and risk? This international conference brought together three principal audiences - industry participants, academics, and public authorities - for an exchange of views and thoughts. The following issues were addressed:

What activities do banks and nonbanks perform in payments?
How has rising nonbank participation affected product innovation and market competition in the payments industry?
Do banks and nonbanks compete on a level playing field?
Is the current supervisory framework over bank and nonbank payment service providers adequate to control risk?
What role should public authorities play in overseeing retail payments in light of changing technologies and changing industrial structures?

The conference was held at the La Fonda Hotel, May 2-4, 2007, in Santa Fe, New Mexico. Papers, remarks, handouts, and a listing of conference attendees are available below for viewing. Papers from the 2005 Payments Conference, "Interchange Fees in Debit and Credit Card Industries: What Role for Public Authorities?" are also available.

2007 Conference Program

Conference Summary	Richard J. Sullivan Senior Economist, Federal Reserve Bank of Kansas City
	Zhu Wang Senior Economist, Federal Reserve Bank of Kansas City
Welcome and Opening Remarks	Richard K. Rasdall, Jr. First Vice President, Federal Reserve Bank of Kansas City

Session 1: Nonbank Payment Activities: An Overview
\| Paper \| Handout \| General Discussion \|
Authors	Simonetta Rosati Senior Market Infrastructure Expert, European Central Bank
	Stuart E. Weiner Vice President and Director of Payments System Research, Federal Reserve Bank of Kansas City

Session 2: Innovation
\| Paper \| Handout \| General Discussion \|
Author	Bronwyn Hall Professor, University of California, Berkley
Moderator	Lee Manfred \| Remarks \| Handout Partner, First Annapolis
Panelists	Benjamin Ling \| Remarks \| Handout Head of Google Checkout, Google
	Rene Pelegero \| Remarks \| Handout Senior Director of Industry Relations, Strategy and Compliance, PayPal, Inc.
	Margaret Weichert \| Remarks \| Handout Senior Vice President, Strategy, Innovation, and Payments Executive, Bank of America

Luncheon Address: Modernizing Payments: No Pain, No Gain
\| Paper \| General Discussion \|
Gertrude Tumpel-Gugerell Member of the Executive Board, European Central Bank

Session 3: Competition: Vertical Integration
\| Introduction \| Paper \| Handout \| General Discussion \|
Author	Nicholas Economides Professor, New York University
Moderator	Kenneth Posner \| Handout Managing Director, Morgan Stanley
Panelists	Michael A. Cook \| Remarks \| Handout Vice President and Assistant Treasurer, Wal-Mart Stores, Inc.
	Trey Jinks \| Remarks \| Handout Senior Director, Corporate Strategy and Planning, TSYS
	Pamela A. Joseph \| Remarks \| Handout Vice Chair, U.S. Bancorp

Session 4: Competition: Horizontal Integration
\| Paper \| General Discussion \|
Author	Jean-Charles Rochet Professor, University of Toulouse
Moderator	Ken Howes \| Remarks \| Handout Director, Edgar, Dunn & Company
Panelists	B.J. Haasdijk \| Remarks \| Handout Chairman, Equens
	Gerard Hartsink \| Remarks \| Handout Chairman, European Payments Council
	David Yates \| Remarks President, Europe, Middle East, and Africa, First Data International

Session 5: Risk
\| Paper \| Handout \| General Discussion \|
Author	Ross Anderson Professor, Cambridge University
Moderator	Avivah Litan \| Remarks Vice President and Distinguished Analyst, Garnter, Inc.
Panelists	Jean Bruesewitz \| Remarks Senior Vice President, Visa U.S.A.
	Roy C. DeCicco \| Remarks \| Handout Senior Vice President, JPMorgan Chase
	Richard Oliver \| Remarks \| Handout Executive Vice President, Federal Reserve Bank of Atlanta
	James Van Dyke \| Remarks \| Handout President, Javelin Strategy and Research

Session 6: Central Bank Perspectives
\| General Discussion \|
Speakers	Philip Klopper \| Remarks \| Handout Executive Director, De Nederlandsche Bank
	Philip Lowe \| Remarks Assistant Governor, Reserve Bank of Australia
	Thomas M. Hoenig \| Remarks President and Chief Executive Officer, Federal Reserve Bank of Kansas City

Conference Attendees