How will payments electronification and convergence change the payments business model? How do you retain competitive advantage?

Abstract

The objective of this paper is to advance a compelling argument for US financial institutions to adopt cheque electronification and to integrate electronic payment information to retain competitive advantage. The target audience of this paper is senior technology, operations and business-line managers in US financial institutions. The paper begins with a brief overview of the pre-Check 21 environment. It then examines the expectations surrounding Check 21 and contrasts the current growth of cheque electronification with the industry's experience with credit and debit card payments. It discusses the impact of the convergence of a number of factors indicating that the industry is reaching a tipping point where a majority of cheques and payments are electronic. The changes in store for the payments business model as a result of payments electronification and convergence is examined, and a case for image exchange is made.