Payments System Research Briefings Archive

Payments System Research Briefings cover range of payments topics, including types of payment methods, developments in payments networks, and various participants' roles in the payments system.

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69 result(s) found
Article Title Author(s) Date Type

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.

Terri Bradford Expandable Row
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.

Julian Alcazar
Sam Baird
Emma Cronenweth
Fumiko Hayashi
Ken Isaacson Expandable Row
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.

Franklin Noll Expandable Row
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.

Julian Alcazar
Sam Baird
Emma Cronenweth
Fumiko Hayashi
Ken Isaacson Expandable Row
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.

Julian Alcazar
Sam Baird
Emma Cronenweth
Fumiko Hayashi
Ken Isaacson Expandable Row
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.

Ying Lei Toh Expandable Row
November 29, 2023
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Social Media for Personal Finances: A New Trend for Millennials and Gen Z

Younger generations—specifically, millennials and Gen Z—increasingly turn to social media for personal finance purposes, such as making and receiving payments, crowdfunding, shopping, and financial education. While the financial tools provided by social media offer benefits, such as convenience and community, they also come with risks, such as increased fraud and misinformation.

Sam Baird Expandable Row
October 11, 2023
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The Controversial Business of Cash-to-Crypto Bitcoin ATMs

Bitcoin ATMs, standalone machines that convert cash to cryptocurrency, are a relatively new and less examined part of the cryptocurrency world. This controversial industry has garnered criticism in the press as well as the U.S. government for its association with illegal or financially predatory practices. However, despite the recent downturn in cryptocurrency prices, some U.S. consumers are still using Bitcoin ATMs, suggesting the industry meets a demand from consumers who want an alternative to crypto exchanges.

Franklin Noll Expandable Row
August 30, 2023
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“Give Me Some Credit!”: Using Alternative Data to Expand Credit Access

Fintechs, credit bureaus, and financial institutions are collecting alternative data to develop new scoring models that supplement traditional credit reports. Studies, providers, and pilot programs suggest that these alternative data can improve credit reporting and thereby expand access to fair credit. However, use of alternative data is still low due to both uncertainty about the benefits relative to the cost and consumer concerns about use and privacy.

Terri Bradford Expandable Row
June 28, 2023
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What Consumer Surveys Say about the Design of a U.S. CBDC for Retail Payments

Although researchers continue to discuss the possibility of a central bank digital currency (CBDC) for retail payments in the United States, the success of a CBDC will depend on consumer adoption. To understand how a CBDC could provide a good user experience, recent surveys in the United States and in other countries have asked consumers about their wants and needs for a potential CBDC. In the United States, a majority of respondents to these surveys seek dependability, convenience, and security.

Franklin Noll Expandable Row
March 29, 2023
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