Consumers will not store their funds in a system that is not secure and will not want to transfer funds out of an otherwise secure system if the process is cumbersome. The Role of Banks in Payments Innovation The examples I have highlighted so far illustrate payments innovations from fintech firms and banks alike.
I want to spend a moment highlighting the special role of banks in the payments process, and how banks are needed in order to create innovations that can be used broadly across the economy. The traditional role of banks in the payments process has been to hold deposits and enable their transfer from one individual or business to another.