Developing an Electronic Funds Transfer System: Incentives and Obstacles

The purpose of this paper is to set forth the principal issues which face those responsible for decisions affecting the timing and direction of movement toward an electronic funds transfer system (EFTS) in the public and private sectors. Lest the word issue be read as a pale or vague generality, let us understand that we will be talking about the areas of fact or of policy around which there are sharp disagreements or controversy, either because we do not or cannot yet know what the facts are, or because we have recognized that actions may be taken which serve some interests and harm others. In developing the dimensions of these areas of disagreement or controversy, we will necessarily be confronted with the array of incentives operating on each of the interested parties, and the obstacles facing them. To tell the full story, we will find it useful to recognize some dis-incentives and some non-obstacles, as well. The treatment of some issues in this paper will be brief, since the papers to follow will concentrate on a number of them and emphasize the perspective of each of the major payment system participants.