In 2010, the Department of Justice (DOJ) filed a lawsuit against the credit card networks American Express, MasterCard, and Visa for alleged antitrust violations. We evaluate the extent to which the recently proposed settlement between the DOJ and Visa and MasterCard (henceforth, "Proposed...

Merchant fees and reward programs generate an implicit monetary transfer to credit card users from non-card (or "cash") users because merchants generally do not set differential prices for card users to recoup the costs of fees and rewards. On average, each cash-using household pays $149 to...

This paper reviews recent developments in online and mobile banking in the United States that provide bank account holders with low-cost interfaces to manage account-to-account electronic money transfers. The paper analyzes the emerging decentralized market in which A2A money transfers are...

In October 2011, new rules governing debit card interchange fees became effective in the United States. These rules limit the maximum permissible interchange fee that an issuer can charge merchants for a debit card transaction. This paper provides simple calculations that identify the...

The paper investigates the reasons why person-to-person electronic funds transfers are still not very common in the United States compared with practices in many other countries. The paper also describes recent enhancements to online and mobile banking that provide account holders with low-cost...

Recent legislation and court settlements in the United States allow merchants to use price discounts to steer customers to pay with means of payment that are less costly to merchants. This paper suggests one method of calculating merchants' change in profit associated with giving price discounts...

The recent decline in the Federal Reserve’s check volumes has received a lot of attention. Although switching to electronic payments methods and electronic checkprocessing has been credited for much of that decline, some of it could be caused by changes following bank mergers involving Federal...

The Federal Reserve Financial Services Strategic Plan for 2012 - 2016 specifies five main policy goals for the next few years. The second of its goals is to "Maintain public confidence in the end-to-end safety and security of clearing and settlement systems." Indeed, in each annual Survey of...

This paper investigates the effects of credit scores on consumer payment behavior, especially on debit and credit card use. Anecdotally, a negative relationship between debit card use and credit score has been reported; however, it is not clear whether that relationship is related to other...

The Emerging Payments Research Group (EPRG) at the Federal Reserve Bank of Boston sponsored a new conference, "Consumer Behavior and Payment Choice: How and Why Do Consumers Choose Their Payment Methods?" on October 27-28, 2005, at the Boston Fed. The conference brought together a diverse set of...