Useful information re retail payments. This ppt comes from http://frbatlanta.org/filelegacydocs/econ_rd/ac/ac_mckee_060107.pps

1. Retail Payments Systems in the U.S. International Workshop Retail Payments Câmara Interbancária de Pagamentos São Paulo, Brazil June 1, 2007 James McKee Federal Reserve Retail Payments Office

4. Distribution of Non-Cash Payments

5. Payments Markets Trends 0.00 2.00 4.00 6.00 8.00 10.00 12.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 Cash Check Money Order Credit Card PIN-Less Debit Debit Card (Sig) ACH Source: Celent and BearingPoint Analysis Total Number of Consumer to Business Recurring Payments by Instrument (Billions) ACH Check WHILE USE OF CHECKS IS ON THE DECLINE, USE OF ACH IS ON THE RISE

10. Check Processing/Clearing Flow Payee’s DFI Payor’s DFI FLOW : Payor (Maker), Payee (Party due payment), Payee’s DFI (Collecting bank), Clearing House, Payor’s DFI Federal Reserve Bank OR Correspondent Bank OR Local Clearing House Payee Company/Individual (Receives Check) Payor (Writes Check) Deposited Cancelled Forwarded Presented for Payment Payment through a debit to payment account Payment through a debit Payment through a credit Payment through a credit to payee’s account account

12. Check 21 Statistics

13. Check 21 Statistics

17. ACH Network Volume Growth (Items Processed: Millions)

18. Present Day Who Is Using ACH? Consumers 143 Million Corporations 4.8 Million Federal Government Employees 99.8 Percent Private Sector Employees 71.0 Percent

19. 2006: 4 th Quarter Statistics Commercial Debits vs. Commercial Credits Commercial Debits 1,925,318,112 (64.1%) Commercial Credits 1,078,026,550 (35.9%)

20. 2006: 4th Quarter Statistics Commercial Volume vs. Government Volume Commercial Volume 3,003,344,662 (92.5%) Government Volume 242,766,839 (7.5%)

21. Total ACH Network Volume - 1992 to 2012 (Actual volume through 2006, projections 2007 – 2012) Item volume (in millions). Network volume excludes on-us items

22. Network Volume: eCheck 2001 to 2012 Item volume (in millions). Network volume excludes on-us items

23. Traditional ACH vs. eCheck 2001 to 2012 Item volume (in millions). Network volume excludes on-us items

24. ACH Processing Flow

27. New Entrants Growing Fast PayPal account growth continues (100 million+ accounts in 1Q06 & 40% annual transaction volume growth) along with service offerings (PayPal Mobile – Text to Buy) & international reach (55 countries)

30. EBPP Forecast: 2006 to 2011 Forrester Research, 01/27/2007

35. Trends in Cards Sources: Pelorus Group, Mercator, Financial Insights, Tower; BBD Projections

36. Card Processing Flow Consumer (Card-Holder) National Credit Card Network Merchant Acquirer/Processor (Merchant Bank) Card-Issuing Bank Card Issuer Consumer’s Acct On-Line Purchases Item Sales Draft Info Sales Draft Info Sales Draft Info Authorization Authorization Authorization