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Update Newsletter: Winter 2007

From the Director

Welcome to this edition of Update, a periodic publication of the Payment Cards Center highlighting recent activities. Update complements the information available elsewhere on this website, including a complete list of the PCC's papers.

As I considered this issue's opening note, I found myself reflecting on how the PCC's agenda has evolved in the seven years since its inception in late 2000. The initial impetus for establishing a Payment Cards Center at the Philadelphia Fed was based on the Bank's proximity to and early familiarity with the concentration of credit card businesses based in Delaware. Over time, it has become increasingly apparent that the credit card is only a piece, albeit a significant piece, of the larger structure of consumer credit and payments. As a result, the PCC's research interests have expanded to include the broader array of evolving forms of electronic payments and their use by consumers. We note several examples of this expanding scope in this issue.

Another important dimension of the PCC's evolution over the past seven years has been the commitment to partnerships with Bank and other Federal Reserve colleagues, as well as with external organizations and firms in the industry. In very real ways, these partnerships have allowed us to leverage our relatively limited resources and benefit from other areas of expertise and business knowledge.

Earlier issues of Update have focused on the PCC's relationships with organizations and firms in the payment card industry. This issue highlights several recent examples of how collaborations within the Philadelphia Fed have served to further the PCC's mission. In support of the Bank's goal to expand its expertise in the broad area of consumer credit and payments, the Payment Cards Center has taken the lead in coordinating and leveraging relevant expertise found in other areas of the Bank.

A good example of this cross-functional collaboration, highlighted in this issue, is a recent conference cosponsored by the Payment Cards Center and the Bank's Community Development Studies and Education Department. This event involved discussion of developments and innovations in how low- and moderate-income families use financial services. The conference greatly benefited from the PCC's ability to build on Community Development Studies and Education' knowledge of the general challenges faced by this segment of society and our own experiences and contacts with banks and other financial services providers.

This issue describes another example of our efforts to expand cross-functional collaboration, in this case with the Bank's Research Department. From the PCC's start, we have had a strong commitment to supporting academic research and have worked closely with the Bank's Research economists who have interests in consumer credit and payments. A September conference, Recent Developments in Consumer Credit and Payments, was the fourth in a series of collaborative efforts between the PCC and the Research Department to bring together leading scholars for a discussion of new research.

Importantly, our internal collaborations also lead to the development of new external relationships. A good example is the PCC's visiting scholar program through which, with the help of colleagues in Research, we have established working relationships with academics who have relevant research interests. Later in this issue, we summarize a recent paper by one of the PCC's visiting scholars, Jonathan Zinman from Dartmouth College. “Where Is the Missing Credit Card Debt? Clues and Implications” adds to the PCC's efforts to better document the construction of commonly cited data sources and to recommend their appropriate use in research.

Last, this issue highlights a recent discussion paper written by the PCC's Julia Cheney. “An Update on Trends in the Debit Card Market” is based on an earlier workshop at which industry practitioners reviewed data from customer surveys on developments in debit card activities.

I hope that you find this Update of interest. As always, I welcome your thoughts and suggestions as to how we might make the Payment Cards Center a more effective contributor to building relevant knowledge and insights in consumer credit and payments.