Governance of Payment Systems : A Theoretical Framework and Cross-Country Comparison

We develop and test the effectiveness of a theoretical governance model for general purpose payment systems (GPPS), systems that are used by individuals, businesses and merchants, and state, local and federal government entities to make and receive payments. We test for effective governance across six reference countries using measures that are based on evolving regulatory norms, finding that governance in Australia, the European Union, and the United Kingdom aligns with the theoretical model, and that their governance is effective. Payment system governance in Japan, Canada, and the United States does not align with the theoretical model, and is shown not to be effective according to the measures. Our findings indicate that national government is being called on increasingly to set and oversee the accomplishment of public policy objectives, and that their involvement is consistent with effective governance