Diversity of transactions, institutions and equipment creates risk

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Analyses of systemic vulnerabilities and potential disruption scenarios can identify mitigation strategies.

The Retail Payment System (RPS) moves money among almost all actors in the economy and comprises the equipment and institutions that enable diverse financial transactions involving consumers and businesses. The reliable functioning of the RPS is necessary for all economic activity; disruptions to or changes within the RPS can have significant, widespread consequences.

Diagram of processes modeled for retail payment systemsOur goal: to enable definition and analysis of disruption scenarios and possible mitigations; to enable decision-makers to estimate consequences of disruptions to the current RPS; and to and evaluate potential disruptions/vulnerabilities caused if the composition of the system itself changes significantly (adapting to competition, new technologies, and regulation).

A Payment Flow Model (PFM), addressing potential disruptions to the current RPS, representing various elements of the RPS (banks, households, businesses, etc.) has been designed, implemented and tested.

An initial causal Platform Competition Model (PCM) has been developed to address potential disruptions caused by a transformation of the RPS.