Federal Reserve Bank of Atlanta
My colleague Jessica Washington recently blogged about the four-corner payments model as a useful framework for understanding the responsible parties in the payments system. The model shows the minimum number of parties required to conduct clearing and settlement. (The answer is four: the payee, the payer, and their respective financial institutions.)
Jessica pointed out that various fintechs and third-party services providers can be interjected into this model. In remarks on July 17, 2024, Acting Comptroller of the Currency Michael Hsu amplified this point with this graphic that shows where various partners to a payment transaction may sit:
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