They have the potential to weaken the incentives for banks to clean up their balance sheet of troubled assets and monitor their credit risk carefully. This in turn may reinforce the very problems that currently impair the functioning of the financial system. Too low interest rates tend to foster lending to unprofitable business.
20-13 (Boston: FRB Boston, 2020), https://www.bostonfed.org/publications/research-department-working-paper/2020/distributional-effects-paymentcard-pricing-merchant-cost-pass-through-united-states-canada.aspx. 7  -6types has the potential to increase the choices available to businesses and consumers, reduce transactions costs, and foster innovation in end-user services, although it could also contribute to fragmentation of the current payments system.