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Why government should encourage and defer to, rather than compete with, private sector payment systems
Journal of Payments Strategy & Systems,
18
(3),
282-290
(2024)
Abstract
The paper discusses the huge and rarely acknowledged, much less addressed, issue of government payment systems competing with private sector payment systems that serve consumers, businesses and banks. This paper’s discussion of government payment systems, however, does not include central banks’ real-time gross settlement systems. It discusses a range of public and private sector payment systems, payment-network innovation, accountability and value, why governments develop and run payment systems, and why they should not.
Keywords: payment networks; payments innovation; central bank conflicts of interest; public versus private sector; payment-system competition; cash; real-time payments.
The full article is available to subscribers to the journal.
Author's Biography
Eric Grover is the Principal of Intrepid Ventures, providing corporate development and strategy consulting to financial services, payment network and processing businesses, and to firms serving and investing in the payments space. He is one of the world’s foremost independent paymentsystem authorities and thought leaders and has a comprehensive understanding of the global payment network and processing space, including each stage in the payments value chain. Grover is an expert on network competitive dynamics and the unprecedented wave of innovation stressing and enhancing the payments industry, was the first to publicly make the case for banks to demutualise Mastercard and Visa, and is the world’s leading independent authority on interchange and interchange regulation. His experience includes Visa International, GE Consumer Finance, Bank of America, NationsBank, Transamerica; he has also served as a director on Nordstrom’s credit card A/R subsidiary’s board. His commentaries have been published in American Banker, Banking Strategies Magazine, Barron’s, Citi Journal, Digital Transactions, Euractiv.com, The Hill, Las Vegas Review-Journal, National Review, PaymentsSource, The Paypers, POSitivity, RealClear Markets and the Washington Times. Grover has a BA in economics from Amherst College and an MBA in finance from NYU Stern’s Graduate School of Business.
