Payments are increasingly being made with payment cards rather than currency-this despite the fact that the operational cost of clearing a card payment usually exceeds the cost of transferring cash. In this paper, the authors examine this puzzle through the lens of monetary theory. They consider...

This is the third in a series of three papers that examines the laws, regulations, and voluntary industry practices that may aid consumers who contest an electronic transaction because of error, fraud, or merchant dispute. The first two papers describe the complex web of protections available to...

This paper discusses consumer protections available to gift-card users. Specifically, it examines the ways in which value loaded at the time of purchase is protected for future card use or returned to consumers when the card is not used or has expired. The consumer protection information...

This paper describes the characteristics of closed-system and open-system prepaid cards. Of particular interest is a class of open-system programs that offer a set of features similar to conventional deposit accounts using card-based payment applications. The benefits that open-system prepaid...

On April 23 and 24, 2008, the Payment Cards Center of the Federal Reserve Bank of Philadelphia and the Electronic Funds Transfer Association jointly hosted "Maintaining a Safe Environment for Payment Cards: Examining Evolving Threats Posed by Fraud." The conference included panels representing...

While consumers' use of payment cards has grown rapidly in many other areas, their use in making health-care payments has been far more limited. This paper attempts to explain several reasons for the slow adoption rates and identifies four related trends and developments that can be expected to...

Open payment card networks typically coordinate the activities of thousands of financial institutions that issue cards, millions of retail locations that accept them, and several hundred million consumers that use them. This coordination can include the collective setting of certain prices and...

The authors study the design of efficient intertemporal payment arrangements when the ability of agents to perform certain welfare-improving transactions is subject to random and unobservable shocks. Efficiency is achieved via a payment system that assigns balances to participants, adjusts them...

The goal of this paper is to provide a framework to analyze the effectiveness of bank coalition formation in response to an external aggregate shock that may cause disruption to the payment mechanism and real economic activity. I show that the kind of insurance mechanism provided by a specific...