Modelling payments systems: Literature review

Central Banking staff
13 Apr 2007

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In this Bank of Canada Working Paper the authors organize the literature on payments systems according to three general classes of modelling approaches, and compare those approaches in terms of their strengths and weaknesses.

Payments systems play a fundamental role in an economy by providing the mechanisms through which payments arising from transactions can be settled. The existing literature on the economics of payments systems is large but loosely organized, in that each model uses a

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