Could Municipal IDs Facilitate Access to Financial Services?
Of the approximately 5.6 million U.S. households that did not have a bank or credit union account in 2023, about 13 percent cited not having the identification (ID) required to open an account as a reason for being unbanked. Municipal ID programs provide a form of local identification and can be designed to facilitate access to banking and financial services, though challenges to achieving this potential remain.
Payments
Payments System Research Briefing
Banking and Finance
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Terri Bradford
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December 4, 2024
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Combating Authorized Push Payment Scams in Fast Payment Systems
Fast payments can help consumers improve their cash flow, but the speed and irrevocability of these payments also make them a target for fraudsters seeking to commit authorized push payment (APP) scams. Combating APP scams is critical to ensuring the safety of fast payments and building and maintaining consumer confidence in fast payment systems.
Payments
Payments System Research Briefing
Banking and Finance
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Ying Lei Toh
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November 15, 2024
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Cash Bill Pay Services and Payment Inclusion in the United States
Cash bill pay, a service that allows consumers to pay bills with cash at participating retailers, may be one way to promote payment inclusion in the increasingly digitized U.S. economy. With this service, consumers who prefer to use cash, or those without a transaction account, can have in-person, tangible experiences paying bills.
Payments
Payments System Research Briefing
Banking and Finance
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Franklin Noll
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October 18, 2024
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The Role of Nonbanks and Fintechs in Boosting India’s UPI Person-to-Merchant Transactions
Unified Payments Interface (UPI), a mobile-based instant payment system in India, has grown substantially in the last few years. Indians initially used UPI for person-to-person (P2P) payments, but today use UPI more for person-to-merchant (P2M) payments. Nonbanks and fintechs have contributed to the rapid growth of UPI P2M payments by providing third-party apps, merchant services, and consumer credit, as well as enabling UPI P2M payments to expand beyond India’s borders.
Payments
Payments System Research Briefing
International
Banking and Finance
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Aditi Routh
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August 30, 2024
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As Earned Wage Access Grows, Oversight Tries to Catch Up
Earned wage access (EWA) services have grown in popularity as more providers offer them and more businesses and consumers use them. However, the complex fee structures and high costs of EWA, as well as some users’ heavy reliance on these services, have raised concerns. Regulatory and legislative bodies have begun to respond to these concerns, with states taking the lead in proposing or passing EWA legislation.
Labor and Demographics
Payments
Payments System Research Briefing
Banking and Finance
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Terri Bradford
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May 15, 2024
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The Role of Core Banking Services Providers in Facilitating Instant Payments
Core banking services providers play key roles helping depository institutions (DIs) offer instant payments. Specifically, core providers process transactions in real time and connect DIs to instant payments system operators, upgrade customer-facing solutions, and facilitate open banking and embedded finance. As the United States implements instant payments systems, the market structure surrounding core providers may evolve, and competition between fintechs and DIs for end users may intensify.
Payments
Payments System Research Briefing
Banking and Finance
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Julian Alcazar
Sam Baird
Emma Cronenweth
Fumiko Hayashi
Ken Isaacson
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May 8, 2024
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Observations from the Retail CBDCs of the Caribbean
Three retail central bank digital currencies (rCBDCs) have been issued in the Caribbean, but thus far all have struggled to achieve expected adoption from both consumers and merchants. The efforts to launch these rCDBCs offer three takeaways: 1) the underlying technologies of rCBDCs may have little effect on adoption; 2) an rCBDC may need to demonstrate value added to entice consumers to use it; and 3) an rCBDC platform may need to be integrated into the larger financial ecosystem to be widely adopted.
Payments
Payments System Research Briefing
International
Banking and Finance
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Franklin Noll
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April 10, 2024
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Market Structure of Core Banking Services Providers
Three core providers dominate the market for core banking systems for depository institutions (DIs). These providers also have a large presence in vertically related markets, such as card network services; payment processing services for DIs, merchants, or governments; and banking-as-a-service. This market structure may make it difficult for DIs to switch their core providers, affecting their ability to offer new services and stay competitive.
Payments
Payments System Research Briefing
Banking and Finance
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Julian Alcazar
Sam Baird
Emma Cronenweth
Fumiko Hayashi
Ken Isaacson
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March 27, 2024
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Core Banking Systems and Options for Modernization
Each U.S. depository institution (DI)—including banks and credit unions—uses a back-end information technology system to process daily transactions and manage financial accounts. Many of these “core banking systems” are outdated and unable to fully accommodate modern services, such as open banking and instant payments. Modernizing these systems is a complex process, and DIs may consider a full replacement, a component-based replacement, or augmenting their existing system.
Payments
Payments System Research Briefing
Banking and Finance
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Julian Alcazar
Sam Baird
Emma Cronenweth
Fumiko Hayashi
Ken Isaacson
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February 28, 2024
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How Much Do Nonbank Transaction Accounts Improve Access to Digital Payments for Unbanked Households?
Nonbank transaction accounts—such as prepaid card accounts or accounts with online payment service providers—can help unbanked households make safe and affordable digital payments. But data suggest that they may not be sufficient to achieve digital payments inclusion. Less than half of unbanked households had these accounts in 2021; the rest either used paper-based transaction products or relied solely on cash.
Payments
Payments System Research Briefing
Banking and Finance
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Ying Lei Toh
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November 29, 2023
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