Person-to-Person Electronic Funds Transfers: Recent Developments and Policy Issues
42 Pages Posted: 27 Feb 2010 Last revised: 3 Mar 2010
Date Written: March 2, 2010
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 interfaces to manage person-to-person electronic funds transfers via automated clearing house (ACH). On the theoretical side, the paper characterizes the critical mass levels needed for payment instruments to become widely adopted. Given the Fed's long-term heavy involvement in check clearing, the paper concludes with policy discussions of whether intervention is needed.
Keywords: Automated Clearing Houses (ACH), Person-To-Person Electronic Funds Transfers, Account-To-Account Transfers, Online Banking, Mobile Banking
JEL Classification: E42, G29, D14
Suggested Citation: Suggested Citation