Legal Seminar, Denver, CO

071018 Discussion Draft

E LECTRONIC P AYMENTS : R EGULATING I NNOVATION

C ONFERENCE OF S TATE B ANK S UPERVISORS L EGAL S EMINAR D ENVER , C OLORADO J ULY 19, 2018

E DWARD A. M ORSE P ROFESSOR OF L AW M C G RATH N ORTH M ULLIN & K RATZ E NDOWED C HAIR C REIGHTON U NIVERSITY S CHOOL OF L AW O MAHA , N EBRASKA MORSE @ CREIGHTON . EDU

Contents I.

Introduction............................................................................................................................. 3 II. Cash and Cashlessness: An Overview. .................................................................................. 3 A. Legal and Regulatory Features........................................................................................ 3 1. Legal Tender................................................................................................................. 4 2. Safety/Soundness.......................................................................................................... 4 3. BSA/AML Rules. ......................................................................................................... 6 4. Regulating Payment Networks: Money Services Businesses...................................... 6 5. Regulating Payment Networks: Informal Value Transfer Systems (IVTS). ............... 7 6. Peer to Peer Payments. ................................................................................................. 7 B. Common Concerns for Regulators. .................................................................................. 8 C. Common Concerns for Consumers and Merchants.......................................................... 8 1. Costs. ............................................................................................................................ 8 2. Security. ........................................................................................................................ 8 3. Trust.............................................................................................................................. 8 4. Speed and convenience................................................................................................. 9 III. Electronic Payments: An Overview.................................................................................... 9 A. Rails.................................................................................................................................. 9

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