Emergence of Immediate Funds Transfer as a General-Purpose Means of Payment

16 Pages Posted: 15 Nov 2011

See all articles by Bruce J. Summers

Bruce J. Summers

Consultant on Money, Banking, and Payments

Kirstin E. Wells

Board of Governors of the Federal Reserve System

Date Written: July 28, 2011

Abstract

Immediate funds transfer (IFT) is a highly convenient, certain, secure, and economical means of payment using bank money. IFT is not available in the U.S. banking system, except for large-value business payments, interbank transfers, and specialized financial market transactions. This article examines the successful experience with IFT in Mexico, South Africa, Switzerland, and the UK and concludes that payment system governance is the principal barrier to IFT innovation in the U.S.

Keywords: financial economics, market structure, public goods

JEL Classification: G00, H41, D40

Suggested Citation

Summers, Bruce J. and Wells, Kirstin E., Emergence of Immediate Funds Transfer as a General-Purpose Means of Payment (July 28, 2011). Economic Perspectives, Vol. XXXV, No. 3, 2011, FRB of Chicago Working Paper No. 3Q/2011, Available at SSRN: https://ssrn.com/abstract=1959426

Bruce J. Summers

Consultant on Money, Banking, and Payments ( email )

VA
United States
540-464-1790 (Phone)

Kirstin E. Wells (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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