Discussion Paper
The laws, regulations, and industry practices that protect consumers who use electronic payment systems: policy considerations
Abstract: This is the third in a series of three papers that examines the laws, regulations, and voluntary industry practices that may aid consumers who contest an electronic transaction because of error, fraud, or merchant dispute. The first two papers describe the complex web of protections available to users of four popular electronic payment mechanisms: credit cards, debit cards, prepaid cards, and ACH e-checks. This third paper considers how protections related to fraud, error, and disputes affect market participants. The paper concludes that (i) the current protection mechanisms make it more difficult to encourage the adoption of fraud-reduction schemes, (ii) the current protections represent a significant cost to banks, merchants, processors, and consumers, and (iii) the present federal system of protection, while encouraging innovation and thoughtful regulation, leads to consumer confusion.
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File(s): File format is application/pdf https://www.philadelphiafed.org/-/media/frbp/assets/consumer-finance/discussion-papers/cppolicy-102005.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of Philadelphia
Part of Series: Consumer Finance Institute discussion papers
Publication Date: 2005
Number: 05-16