Private Markets, Public Options, and the Payment System

58 Pages Posted: 6 May 2020 Last revised: 24 Dec 2020

See all articles by Peter Conti-Brown

Peter Conti-Brown

University of Pennsylvania - The Wharton School; Brookings Institution

David A. Wishnick

Georgetown University Law Center; University of Pennsylvania - Center for Technology, Innovation & Competition

Date Written: April 17, 2020


The speed at which money moves between people and businesses in the United States lags well behind international standards. Slow payment speeds lead to inefficiency across the economy, drive demand for high-cost credit products, and have hampered the federal response to 2020’s pandemic-driven economic crisis. To speed up the payment system, the Federal Reserve (“Fed”) has announced its intention to build “FedNow,” a publicly operated, real-time payment platform, which would compete with a privately run platform in the interbank payment market. Critics claim that the Fed’s plan represents a historically unprecedented—and possibly illegal—encroachment on turf that properly belongs to the private sector. Against the Fed’s critics, we argue that the FedNow plan holds the capacity to achieve three objectives at the heart of payment policy in the United States: to catalyze innovation, enhance access to developing payment networks, and shore up financial stability.

(A revised version of this paper is available on the Yale Journal of Regulation's website:

Keywords: payment system, central banking, financial regulation, Federal Reserve, real-time payments, banking, public options, administrative law, regulation

JEL Classification: k00, k10, k2, k22, k23, g20, g21, g23, g28, n12

Suggested Citation

Conti-Brown, Peter and Wishnick, David and Wishnick, David, Private Markets, Public Options, and the Payment System (April 17, 2020). 37 Yale Journal on Regulation (2020), Available at SSRN:

Peter Conti-Brown (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

David Wishnick

University of Pennsylvania - Center for Technology, Innovation & Competition ( email )

Philadelphia, PA
United States

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

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