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The design and adoption of fast payments
Journal of Payments Strategy & Systems,
18
(4),
366-380
(2024)
Abstract
The payments landscape is evolving rapidly, and fast payment systems (FPS) have emerged globally as a key innovation. Jurisdictions differ in their approach to designing FPS and in user adoption. In this paper we lay out the main design features of FPS that may foster adoption based on a novel qualitative and quantitative dataset of FPS in 13 jurisdictions. Cross-country regressions suggest that adoption of fast payments is greater when there are more use cases, more cross-border connections, when non-banks can participate in the FPS and when the public sector plays an active role in the FPS. In addition, we find that implementing an FPS improves financial inclusion, beyond payments.
Keywords: fast payments; instant payments; fast payment systems; cross-border payments; digital innovation; financial inclusion
The full article is available to subscribers to the journal.
Author's Biography
José Aurazo is a Visiting Economist at the Bank for International Settlements Americas Office, where he has worked since June 2023. He has worked at the Central Reserve Bank of Peru since 2015 and has researched digital payments and financial inclusion, analysed the competition conditions in the market for payment cards, and participated in the research stage of the CBDC project. He holds an MSc in Economics of Markets and Organizations from the Toulouse School of Economics and an MSc in Economics from the Universidad del Pacífico.
Cecilia Franco is a Senior Macroeconomic Analyst at the Bank for International Settlements Americas Office, where she has worked since 2017. Previously, she worked in the National Centre for Control of Natural Gas (CENAGAS) and the Bank of Mexico. She holds a BSc in Applied Mathematics and a Masters in Economics from the Center for Research and Teaching in Economics (CIDE).
Jon Frost is Head of Economics for the Americas at the Bank for International Settlements Americas Office. Previously, Jon worked at the Financial Stability Board, the Dutch central bank, VU University and in the private sector. He holds a PhD in Economics from the University of Groningen, an MA from the University of Munich and a BA/BS from the University of Washington. He is a research affiliate with the Cambridge Centre for Alternative Finance.
Priscilla Koo Wilkens is a Senior Economist at the Bank for International Settlements. Prior to this, she served in various roles at the Central Bank of Brazil, including heading the Pix Management Division and co-leading the development of the Brazilian Credit Information System. Priscilla holds a degree in industrial engineering from Escola Politécnica da Universidade de São Paulo and a Masters in Public Administration with a concentration on Economics and Finance from Cornell University.
Anneke Kosse is a Senior Economist at the Secretariat of the Bank for International Settlements’ Committee on Payments and Market Infrastructures. Her policy work and research focus on digital innovations in payments. Previously, Anneke worked at the Bank of Canada, most recently as Research Advisor Payments Modernization. Anneke started her payments career as a Policy Advisor and Researcher at the Dutch central bank and holds a PhD in Business and Economics from Tilburg University.
Vatsala Shreeti is an Economist working with the Innovation and Digital Economy team at the Bank for International Settlements. Her main areas of interest are digital economics, industrial organisation and financial technologies. She is a research affiliate at CESifo and at the Financial Inclusion through Interoperability Initiative (FIT-IN). She holds a PhD in Economics from the Toulouse School of Economics and a Masters in Economics from the London School of Economics and Political Science.
Carolina Velásquez is a Senior Economist in the Department of Financial Market Infrastructure Oversight at the Central Bank of Colombia. She has served as a visiting economist at the Bank for International Settlements Americas Office and held roles in international affairs and financial institutions analysis in the Central Bank of Colombia and the Colombian deposit insurance authority. She holds an MS in Economics from Tilburg University and a degree in finance and international relations from Universidad Externado de Colombia.
