Payment Cards Center

The Payment Cards Center provides meaningful insights into developments in consumer credit and payments that are of interest not only to the Federal Reserve but also to the industry, other businesses, academia, policymakers, and the public at large. The center carries out its work through an agenda of research and analysis as well as forums and conferences that encourage dialogue incorporating industry, academic, and public-sector perspectives.

What's new

July 2008

The Laws, Regulations, Guidelines, and Industry Practices That Protect Consumers Who Use Gift Cards (291 KB, 32 pages)

In this paper, Industry Specialist Philip Keitel discusses consumer protections available to gift-card users. Specifically, he examines the ways in which value loaded at the time of purchase is protected for future card use or returned to consumers when the card is not used or has expired. The consumer protection information included in this paper is derived from a number of sources, including several types of state statutes, Federal Trade Commission decisions, financial industry regulatory agency guidelines, and previous interviews with payments industry experts regarding practices concerning network-branded gift cards. This paper expands research begun by the Payment Cards Center in 2004 into prepaid cards generally and the protections available to consumers who use gift cards specifically.

June 2008

Business Method Patents and U.S. Financial Services (308 KB, 46 pages)

A decade after the State Street decision, more than 1,000 business method patents are granted each year. Yet only one in 10 are obtained by a financial institution. Most business method patents are also software patents. Economist Robert M. Hunt addresses the question of whether these patents have increased innovation in financial services and reviews a number of important federal court decisions that will affect how business method patents are obtained and enforced. He also reviews a number of proposals under consideration in the U.S. Congress.

An Examination of Mobile Banking and Mobile Payments: Building Adoption as Experience Goods? (227 KB, 33 pages)

This paper examines consumer adoption of mobile banking and mobile payments using the experience goods and learning by doing constructs as a framework to better understand adoption patterns in the United States and how these may differ in other world markets. Consumer experience and familiarity with mobile devices is considered along with three relatively new communication technologies – SMS text messaging, wireless Internet access, and near field communication (NFC) – that are making important contributions to mobile financial services. Online banking and contactless payments — and consumers’ experience with them — are also studied as “building blocks” to mobile financial services. Furthermore, this analysis considers other factors that are affecting adoption patterns, including financial inclusion opportunities, data security problems, and coordination issues. Together, the building blocks and these other factors will influence how markets for mobile financial services develop.

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