A process analysis study of the deployment of electronic funds transfer peripherals



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This dissertation examines questions about the evolution of the United States payments system that are important for public policy and for individual firm decisions. Technological and regulatory changes are making such significant inroads into the payments system that the very survival of small financial institutions is in question. The existence of decreasing costs to scale which may be enjoyed by large financial institutions is examined. A process analysis model is used, so as to avoid the shortcomings of statistical extrapolation techniques. This is especially important since electronic funds transfer in general and automatic teller machines in particular are being implemented at geometrically increasing rates. This model is created using current cost data from Automatic Teller Machine (ATM) network suppliers including, but not limited to hardware and software manufacturers, servicing agencies, builders, communication companies, and real estate brokers. Simulation studies are carried out on the model which reveal trends in costs which may be useful in planning ATM networks. Decreasing costs to scale exist, but they are small. A decrease in future hardware or software costs in ATM networks will render these decreasing costs to scale smaller yet. This suggests that small financial institutions will not be disadvantaged with respect to decreasing costs to scale. Also the electronic funds transfer configuration which a small financial institution implements should come from a relatively small range of choices. This configuration is well defined by the expected size of the proposed network. [...]



Electric funds transfers--Equipment and supplies, Automated tellers