FR3066a_FR3066b_FR3066c_FR3066d_20160328_omb

Supporting Statement for the
Federal Reserve Payments Study
(FR 3066a, FR 3066b, FR 3066c, and FR 3066d; OMB No. 7100-0351)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority from
the Office of Management and Budget (OMB), proposes to extend for three years, with revision,
the voluntary Federal Reserve Payments Study (OMB No. 7100-0351). This family of reports is
composed of the following four reports:
 Depository and Financial Institutions Payments Survey (FR 3066a),
 Networks, Processors, and Issuers Payments Surveys (FR 3066b),
 Check Sample Survey (FR 3066c), and
 Retail Payments Survey Supplement (FR 3066d).
The FR 3066a, FR 3066b, and FR 3066c are triennial surveys. The FR 3066d is
conducted up to one time per year. These surveys are designed to collect information needed to
support the Federal Reserve System’s (FRS) role in the retail payments system.1 These surveys
are the latest iteration in a series of surveys of depository institutions, payment networks,
processors, and issuers, collectively called the Federal Reserve Payments Study (FRPS) that
were conducted at 3-year intervals from 2001 to 2013.2
The FR 3066a and FR 3066b were designed to support a triennial data collection. The
Federal Reserve proposes to continue the triennial data collection for 2015 data and to add
shorter, annual surveys to update high-priority items from a relatively small set of participants
for 2016 data and for 2017 data.
The Federal Reserve proposes to revise the FR 3066a to collect data for the full calendar
year 2015 instead of a single month, as was the case in the 2013 survey. This will improve the
quality of aggregate estimates by removing the need to annualize monthly data, making the
1

The Federal Reserve plays a vital role in the U.S. payments system, fostering its safety and efficiency, and
providing a variety of financial services to depository institutions. The Federal Reserve is involved with both retail
and wholesale payments. Retail payments are generally for relatively small-dollar amounts and often involve a
depository institution’s retail clients—individuals, businesses, and governments. The Reserve Banks’ retail services
include distributing currency and coin, collecting checks, and electronically transferring funds through the
automated clearinghouse system. By contrast, wholesale payments are generally for large dollar amounts, and often
involve a depository institution’s large corporate customers or counterparties, including other financial institutions.
2
In the previous information collection these surveys were titled “Retail Payment Study.” The study would be
designed to be compatible with and a continuation of past triennial surveys on the payments system conducted in
2001, 2004, 2007, 2010, and 2013. The timing of the surveys would follow the same pattern as in past surveys; the
reference period for the FR 3066a and the reference period for the FR 3066b would be January through December
2015. Data from both surveys would be used to create aggregate estimates for 2015. Reports on past surveys are
available at http://frbservices.org/communications/payment_system_research.htm. The Board has published three
Federal Reserve Bulletin articles on the studies as well: in August 2002
(http://www.federalreserve.gov/pubs/bulletin/2002/0802_2nd.pdf), Spring 2005
(http://www.federalreserve.gov/pubs/bulletin/2005/spring05_payment.pdf), and October 2008
(http://www.federalreserve.gov/pubs/bulletin/2008/pdf/payments08.pdf).

estimates less sensitive to annual seasonality, and providing closer comparability with
data collected in FR 3066b. The change from a month to a year does not affect the
number of reported items. Because of greater availability and automation of data
reporting systems at many depository institutions, this revision is not expected to
significantly affect the reporting burden.3
The Federal Reserve proposes to revise the data collection processes for the
FR 3066a and FR 3066b to more effectively employ adaptive survey methods,
supplemented by the use and collection of survey paradata.4 For example, to adapt to
relatively low past response probabilities and incomplete responses, particularly in some
smaller-institution survey strata, some participants may receive shorter survey forms with
selected questions or entire sections removed. The survey paradata would provide
information to assess the influence of differential treatment and to possibly adjust for any
bias that might otherwise be introduced into the estimation process.
In 2013, the FRPS began collecting information on payments fraud from
depository institutions responding to FR 3066a, and established baseline aggregate
estimates for unauthorized third-party fraud payments by payment type. The Federal
Reserve would use new information collected on payments fraud to update totals for
2015 and to estimate trends in unauthorized third-party payments fraud.
The Federal Reserve proposes revisions to the survey questions based on the need
to further expand the collection of payments-related fraud and security information,
respond to new developments in technology and choices in the payments marketplace,
and adjust for lessons learned from the 2013 data collection. Most of the proposed
expanded fraud questions would be in the FR 3066b surveys sent to payment networks,
issuers, and processors. The expanded questions on fraud and payments security are
based on an attempt to align the questions with the way that various participating
organizations have said they already track and compile such information.
In addition, more detailed fraud baseline information would be collected through followon studies, including the FR 3066d, or possibly in questions included in another triennial study
approved in a future clearance process.
The Federal Reserve proposes revising the FR 3066c data collection process to
include check images processed via the Reserve Banks’ check service. The additional
data are expected to improve the variety and quality of data used to estimate the
proportion of checks by categories such as payers, payees, and purposes.

3

Evidence of this is based on data collected in other surveys conducted by the Board, and a recent survey
conducted by the 3066a contractor. Support for this view was also expressed by various depository institution
participants and other survey researchers.
4
Adaptive methods include Survey paradata is administrative information generated during the conduct of the
survey describing the survey process, including differential treatments and records of any communication such as
telephone conversations and website interactions.

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The total annual paperwork burden for the FR 3066a, FR 3066b, FR 3066c, and
FR 3066d is estimated to be 48,300 hours, a decrease of 800 hours from the previous burden
estimate of 49,100 hours, as explained under Estimate of Respondent Burden section. The draft
survey instruments are attached.
Background and Justification
The FR 3066a, FR 3066b, FR 3066c, and FR 3066d are the latest iteration of the FRPS,
which has been conducted by FRB Atlanta and the Board since 2000. The FRPS originated from
a system-wide effort to improve the measurement and public availability of information on
volumes and trends in checks and other noncash payments. Despite the retail payments system’s
critical importance in supporting everyday commerce, there was a significant gap in quantitative
information on U.S. retail payments before 2000. The FRPS filled this gap by providing a
reliable and transparent non-mandatory survey-based approach to collecting payments industry
data on retail payment volumes and trends.
A U.S. payments system that is safe, efficient, and broadly accessible is vital to the U.S.
economy, and the Federal Reserve plays an important role in promoting these qualities as a
leader, catalyst for change, and provider of payment services to financial institutions and the U.S.
Treasury. In 2012, Federal Reserve Financial Services (FRFS), managed by the Reserve Banks,
refreshed its strategic direction to focus on meeting the evolving needs of payment system users
for end-to-end payment speed, efficiency and security, while remaining true to its longstanding
financial services mission to foster the integrity, efficiency and accessibility of the U.S. payment
system.5 FRFS identified gaps in available data on payments fraud and payment security threats.
In support of these efforts, the Federal Reserve proposes to leverage the FR 3066 surveys, where
appropriate, to collect and improve the availability of aggregate payments fraud and security
information.
The FRPS helps to support FRFS goals by producing information on aggregate volumes
and trends in the payments system and sharing that information with the financial services and
payments industry and the public. The aggregate survey results are widely cited in academic
working papers and journal articles, industry publications, reported in the media, and used by the
public, industry, and FRS staff as the quantitative aggregate benchmark on payments activity in
the United States. Questions in the surveys consist primarily of quantitative payment transaction
volume data in the form of number-value pairs, and require knowledgeable personnel at
participating organizations to reference their confidential commercial and financial records. The
surveys also contain a smaller amount of categorical questions (e.g., Yes/No/Don’t Know) to
help clarify the meaning and content of the responses to volume questions. Because of the
confidential nature of the information, individual response data are only used to produce
aggregate estimates and are not disclosed.
The Retail Payments Risk Forum (RPRF) and the Retail Payments Office (RPO), both at
FRB Atlanta, play key roles within the Reserve Bank’s strategic framework. The mission of the
RPRF is to identify, detect, and encourage mitigation of risk in retail payments through research,
and through collaboration with industry stakeholders. RPRF will provide leadership and
5

See the FedPayments Improvement website for more information (https://fedpaymentsimprovement.org/).

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assistance with the surveys, in recognition of the importance of payments security to the
FRS and the increasing focus on payments fraud and security of the FRPS. The RPO
provides leadership in payments services, operates check and Automated Clearing House
(ACH) clearance services, and will continue to support study planning, contractor
procurement, contracting, and survey execution.
The Federal Reserve oversees the provision of financial services to depository
institutions; develops policies and regulations to foster the efficiency and integrity of the
U.S. payments system; works with other federal agencies on payments issues of joint
responsibility; works with other central banks and international organizations, such as the
Committee on Payments and Market Infrastructures (CPMI) at the Bank for International
Settlements, to collect information on and improve the payments system more broadly;
and conducts research on payments issues.
As the noncash payments system has continued to grow larger and more complex
and as policymakers, the industry, and the public face more choices related to the
payments system, the Federal Reserve believes that the data collected under the FR 3066
surveys play a crucial role in objectively maintaining and updating quantitative
information on the U.S. retail payments system and should be continued in 2016 through
2018. The FRS’s role as a trusted leader in payments processing, its essential role in
policymaking, and the successful record of the data collected under the FRPS uniquely
positions the Federal Reserve to collect these data.
Description of Information Collection
The FR 3066a currently collects information on the national volume (number and value)
of major categories and subcategories of established and emerging methods of payment from a
nationally representative stratified random sample of depository institutions.6 Most questions in
the surveys consist of payment and related transactions organized as number-value pairs. The
FR 3066b currently comprises 15 different surveys, each specific to a particular payment
instrument and/or respondent type (respondents only answer surveys that apply to their
organizations). It collects information from a census of payment networks, processors, and
issuers. The FR 3066c currently collects data from samples of individual checks obtained from a
set of depository institutions. The FR 3066d is an ad-hoc supplement to the other FR 3066
surveys.
The Federal Reserve currently use data collected from the FR 3066a and FR 3066b to
estimate aggregate totals and trends in (1) the number and value of various types of payment and
withdrawal transactions processed by financial institutions that hold transaction deposit, prepaid
card program, or credit card accounts domiciled in the United States; (2) the number and value of
various types of payments that are facilitated by payment networks, payment processors, and
payment instrument issuers within the United States; (3) inter- and intra-bank volumes; (4) the
usage of different types of prepaid cards; (5) transaction volumes of emerging payment methods;
and (6) relevant non-transactional volumes, such as the number of accounts, number of payment
6

To obtain comprehensive coverage of total national volumes the survey may also include non-depository financial
institutions.

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cards outstanding, volumes of returned checks, and volumes of third-party payment fraud. Data
from these two surveys is also used to estimate volumes and trends in cash usage, which are
connected to noncash payment trends, the cash issuance responsibilities of the Board, and the
cash distribution responsibilities of the Reserve Banks. The information about checks collected
from the FR 3066c is currently used to estimate the distribution of checks among broad
categories of payers, payees, and purposes. These data help identify what types of check
payments are declining as well as remaining opportunities for the replacement of checks with
other payment instruments.
Proposed Revisions
FR 3066a. The Federal Reserve proposes changing the survey reference period. Flows
such as payment volumes would be reported for the entire year. Stocks, such as the number or
value of accounts would be reported as the average of end-of-month totals for the calendar year.
The current survey collects the flows for the month of March and stocks for March 31. In
general, proposed questions have been added requesting the total payment transactions of each
major payment type to be allocated to consumer and business categories. The current survey
includes such questions for cards only. Most proposed changes are specific to the section or type
of payment as described below.
1. Institution Profile:
In the current version, respondents verify which affiliates are associated with their survey
responses and provide corrections. The Federal Reserve proposes to remove the
verification step, reducing the amount of up-front analysis required of the respondent.
Some relatively simple qualitative questions would be included that are expected to help
tailor the survey to the institution, reducing overall response time.
The Federal Reserve proposes to change the language describing customer deposit
accounts to better reflect the types of accounts from which payments are made. The
Federal Reserve also proposes adding questions on sweep balances that would be
reported separately to aid in understanding related payment volumes.
The proposed revision would reduce the number of verifications required which is
proportional to the complexity of the participating institution.
2. Checks:
a. Check Payments: The proposed check payments section would include 8
questions compared with 5 questions in the current survey, for a net increase of 3
questions.
b. Check Deposits: The Federal Reserve proposes adding questions regarding
ATM imaging of paper check deposits both at the institution’s own ATMs and at
“foreign” institution ATMs through deposit-sharing agreements. Respondents
would report remotely created checks they collect, including those created by the
bank of first deposit and by client customers. The proposed check deposits

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section would include 23 questions compared with 11 in the current survey, for a
net increase of 12 questions.
c. Outgoing and On-Us Check Returns: The Federal Reserve proposes adding
questions to obtain detail about the reasons for returned checks, particularly
unauthorized fraud-related returns. The proposed section would include 12
questions compared with 5 questions in the current survey, for a net increase of 7
questions.
3. ACH Credits and ACH Debits: The Federal Reserve proposes adding questions that
sum network and in-house on-us volume of payments.7 Credits and debits would
continue to be reported separately. Directly exchanged ACH entries are reported
separately in the current survey and the Federal Reserve proposes they be consolidated
with network ACH entries. The Federal Reserve proposes to add questions on ACH
payments settled same-day and otherwise. The proposed section includes 28 questions
compared with 14 questions in the current survey, for a net increase of 14 questions.
4. ACH returns: The Federal Reserve proposes adding this section. Respondents would
report the number and value of returned ACH transactions drawn on customer accounts,
which are outgoing for ACH debit transactions and incoming for returned ACH credit
transactions. Respondents would report reasons for returned ACH transactions,
particularly unauthorized fraud-related reasons. The proposed new section includes 10
new questions.
5. Wire transfer originations: The Federal Reserve proposes adding questions regarding
wire originations allocated to interbank (over a network or directly exchanged) and book
transfers. The proposed section includes 13 questions compared with 10 questions in the
current survey, a net increase of 3 questions.
6. Wire transfer receipts: The Federal Reserve proposes adding this new section with
questions on wire transfers received by beneficiaries allocated to categories as with
originations. Respondents would also report wire receipts allocated to interbank (over a
network or directly exchanged) and book transfers. The proposed new section includes
13 new questions.
7. General-Purpose Debit and Prepaid Cards: The Federal Reserve proposes
restructuring this section to better match developments in technology and established
categories by which depository institutions track transactions. Proposed revisions include
adding questions on the number of debit and prepaid cards provisioned to mobile devices
and digital wallets, and questions to allocate volumes into person-present/merchant pointof-sale volumes and remote volumes. Person-present volumes would be further allocated
into signature, PIN, or other/no signature required. Questions in the current survey
allocating prepaid accounts and cards to those managed by the responding institution and
7

In-house on-us is a term of art meant to cover only those on-us payments (where the account transfer takes place
between two accounts at the same depository institution) that are processed in-house (meaning not sent over an ACH
network). This distinction is unique to ACH because some depository institutions send on-us ACH payments to
network operators, and the distinction is necessary to properly measure the activity.

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those managed by a third-party are proposed to be replaced with allocations between
reloadable and non-reloadable/gift accounts and cards. The proposed section includes 33
questions compared with 20 questions in the current survey, a net increase of 13
questions.
8. General-Purpose Credit Cards: The Federal Reserve proposes a restructuring of
questions so that network transactions would be separated from non-network
transactions. The Federal Reserve proposes adding questions to collect information on
consumer accounts allocated by revolving balances and current balances. As with debit
and prepaid cards, the Federal Reserve proposes restructuring this section to better match
developments in technology and established categories by which depository institutions
track transactions, and to add questions on the number of credit cards provisioned to
mobile devices and digital wallets. The proposed section includes 29 questions compared
with 16 in the current survey, for a net increase of 13 questions.
9. Cash Withdrawals and Deposits: The Federal Reserve proposes adding questions on
ATM cards in force, and additional clarifying questions on ATM terminals at branch
locations. The proposed section includes 34 questions compared with 23 questions in the
current survey, for a net increase of 11 questions.
10. Alternative Payment Initiation Methods: The Federal Reserve proposes adding
questions on business-to-person and business-to-business payments, in parallel with
questions on person-to-person payments in the current survey. The proposed section
includes 12 questions compared with 7 questions in the current survey, for a net increase
of 5 questions.
11. Unauthorized Third-Party Payment Fraud: The Federal Reserve proposes
restructuring the section for debit, prepaid, and credit cards as described above. The
Federal Reserve also proposes to add questions on fraudulent wire transfers originated.
The proposed section includes 23 questions compared with 12 questions in the current
survey, for a net increase of 11 questions.
FR 3066b. Proposed changes include the introduction of four new surveys and broad
changes to the existing surveys to account for the greater need for payments fraud-prevention,
and security information, new developments in payment technology, and adjustments that reflect
lessons learned from the previous information collection.
The Federal Reserve proposes to add new surveys to cover ATM networks and ATM
processors, in response to demand for richer information about developments in the ATM
industry. In addition, the Federal Reserve added a new transit system operator survey that would
be sent to such participants in place of the private-label prepaid card processor and issuer survey.
This survey is designed to be easier to understand and more consistent with standard reports of
organizations that operate transit systems. Similarly, the Federal Reserve added an electronic
benefits transfer (EBT) processor survey which would be sent to organizations that contract with
the government to administer such programs in place of the private-label prepaid card issuer and
processor survey.

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The Federal Reserve proposes including new questions in each of the new and existing
surveys on the number and value of fraudulent transactions. The new questions would request
fraud transactions by type of fraud using established issuer-reported categories, such as lost card,
stolen card, counterfeit card, and stolen card data. Fraud transactions would also be allocated by
card entry mode and card verification methods in parallel to the allocations requested for
transactions. Where appropriate, the Federal Reserve proposes to request information on issued
cards and payment device acceptance terminals associated with reported payment volumes.
Transaction value distributions in the current surveys contained only one value category
above $50, overlooking a significant portion of transactions in some cases. The Federal Reserve
proposes to revise distributions in the surveys to include breakouts above $50 to better reflect
higher-value transactions. For the credit card surveys, the new higher-value transaction
categories would include two new categories to obtain $50-$99.99, $100-$499.99, and $500 and
above. Transaction value distributions in other surveys would be tailored to what is known from
previously collected value-distribution information. For example, the bill payment surveys,
which have much smaller proportions of lower-value transactions, would involve the
introduction of a richer set of higher-value categories and the removal of lower-value categories.
The Federal Reserve also proposes that various stock variables, such as the number of
cards, be reported as the average of monthly totals over the calendar year, replacing the reporting
of stocks as of December 31 as requested in the current surveys.
Additional proposed revisions to the surveys contained in the FR 3066b are as follows:
1. General-Purpose Card Network Surveys, (credit card, debit card, and prepaid
card): The Federal Reserve proposes restructuring all the card network surveys to better
match established categories by which card networks track transactions. In particular,
person-present card transactions will be tracked by entry mode (e.g. whether a contact or
contactless chip card, card with no chip, or a mobile device was used) and card
verification method categories (e.g. signature, PIN, or remote authentication method).
Remote transactions would be allocated into several categories, including mailorder/telephone-order purchase (MOTO), internet purchase, recurring, installment, and
other categories. Internet purchase transactions would be further allocated into
“authenticated (two-factor authentication via 3-D Secure)” and “other” categories. Card
transactions by payee location would include an additional category of transactions made
to U.S. payees with foreign cards. Respondents would also be asked to report the number
of cards provisioned to a mobile wallet or token vault. The proposed credit card survey
would include 118 questions compared with 54 in the current survey for a net increase of
64 questions. The proposed debit card survey would include 117 questions compared
with 43 in the current survey for a net increase of 74 questions. The proposed prepaid
card survey would include 117 questions compared with 40 in the current survey for a net
increase of 77 questions.
2. Private-Label Credit Card Merchant Issuer Survey, Private-Label Credit Card
Processor Survey, General-Purpose Prepaid Card Processor Survey, and PrivateLabel Prepaid Card Issuer and Processor Survey: Similar to card network surveys,
the Federal Reserve proposes restructuring the transaction entry mode and card
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verification method categories to better reflect standard industry reports, but in less detail
compared with the general purpose card networks. Proposed questions on fraud
allocations would be similar, but simpler, as well. The proposed private-label credit card
merchant issuer survey includes 69 questions compared with 36 in the current survey for
a net increase of 33 questions. The proposed private-label credit card processor survey
includes 69 questions compared with 35 in the current survey for a net increase of 34
questions. The proposed general-purpose prepaid card processor survey includes 94
questions compared with 59 in the current survey for a net increase of 35 questions. The
proposed private-label prepaid card issuer and processor survey includes 76 questions
compared with 48 in the current survey for a net increase of 28 questions.
3. Electronic Benefits Transfer (EBT) Card Processor Survey: EBT processors reported
their volumes in the current private-label prepaid card issuer and processor survey.
Transaction types in the proposed EBT survey would be broken down into the main types
of EBT card programs and questions about types of credits and loads would not be
included, making the reporting form more relevant for this group of processors. The
proposed EBT card processor survey includes 74 questions compared with 48 in the
current private-label prepaid card issuer and processor survey for a net increase of 26
questions.
4. Automated Teller Machine (ATM) Network and ATM Processor Surveys: The
Federal Reserve proposes adding surveys regarding ATM transaction volumes, including
cash withdrawals by debit, prepaid, and credit cards, deposits of cash or checks, and other
general types of ATM transactions. Respondents would report the number of active and
total ATMs and allocate them between those that accept chip cards and those that do not.
Chip card acceptance terminals would be allocated between those that use contact and
contactless chip-acceptance technology.
a. Automated Teller Machine Card Network Survey: Respondents would consist
of the domestic ATM networks in the United States. Most respondents also
operate general-purpose debit card networks. The proposed number of questions
would be 24.
b. Automated Teller Machine Card Processor: Respondents would consist of
independent service operators and ATM transaction processors. The proposed
number of questions would be 24.
5. Alternative Payment Initiation Method Processor Surveys: The Federal Reserve
proposes adding questions regarding fraudulent transactions and, where relevant, doing
so by transaction type.
a. Person-to-Person (P2P) and Money Transfer Payment Survey: The Federal
Reserve proposes adding new questions on fraud broken down by origination
channel. The proposed number of questions would be 33 compared with 22 in the
current survey, for a net increase of 11 questions.
b. Online Bill Payment Processor Survey: The Federal Reserve proposes adding

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new questions on the bill payment funding method broken down by type.
Fraudulent transactions would be broken down by origination channel. The
proposed number of questions would be 27 compared with 20 in the current
survey, for a net increase of 7 questions.
c. Walk-In Bill Payment Processor Survey: The proposed number of questions
would be 20 compared with 20 in the current survey, for a net increase of 0
questions.
d. Deferred Payment Processor Survey: The proposed number of questions would
be 20 compared with 19 in the current survey, for a net increase of 1 question.
e. Private-Label ACH Debit Card Processor Survey: The Federal Reserve
proposes adding a new question regarding the number of active cards. The
proposed number of questions would be 18 compared with 21 in the current
survey, for a net decrease of 3 questions.
f. Far-field RFID Payment Processor Survey: The proposed number of questions
would be 15 compared with 16 in the current survey, for a net decrease of 1
question.
g. Secure Online Payment Processor Survey: Processors would report secure
online payment transactions in 2015, broken down into types. The proposed
number of questions would be 16 compared with 13 in the current survey, for a
net increase of 3 questions.
h. Mobile Wallet Processor Survey: The Federal Reserve proposes adding new
questions regarding the number of active and total cards provisioned to the mobile
wallet. The proposed number of questions would be 17 compared with 8 in the
current survey, for a net increase of 9 questions.
Unlike the FR 3066a, the FR 3066b is designed as a census. The Federal Reserve would
work with a contractor to identify the final list of networks, processors, and issuers from which
to collect data. Estimation of national aggregate payment volumes from the survey is based on
developing a complete population frame of all relevant organizations and requesting data from
each. The survey would be broken up into parts and respondents would only provide
information in the sections of the survey applicable to their organizations. In cases where a
response is not returned, the missing items would need to be imputed using publically available
information and analysis of data from similar organizations that did provide data.
FR 3066c. The FR 3066c would conduct a survey that in past FRPS surveys was
referred to as the Check Sample Study (CSS). Versions of the CSS were conducted in
four out of five FRPS, including the first and last. The survey instrument design could be
modified slightly, but is expected to be very similar to the instrument used in 2013. More
importantly, the data collection method may be revised based on proposals received
through a competitive bidding process. As noted above, check samples from Reserve
Bank processing may be included. The Federal Reserve has developed a low-cost

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random sampling process. The Federal Reserve proposes that the decision on what approach to
use for this survey would be based on an evaluation of the proposals received.
FR 3066d. The Federal Reserve may conduct the ad-hoc Retail Payments Survey
Supplement up to one time per year to collect information on specific issues that affect its
decision making. The survey topics discussed with the respondents are often time sensitive and
the questions of interest may vary with the focus of the survey. Because the relevant questions
change with each survey, there is no fixed reporting form. For each survey, the Federal Reserve
prepares questions of specific topical interest and then determines the relevant target group to
contact. The principal value of the FR 3066d is the flexibility it provides the Federal Reserve to
respond quickly to the need for data as new developments occur in the retail payment area. One
area of interest pertains to new methods of collecting and aggregating fraud data that help to
identify important trends as they emerge. Other topics covered by the FR 3066d may include
payments security, speed, efficiency, and other topics that help to explain payment trends and
support the Federal Reserve’s role in the payments system.
Frequency
The Federal Reserve proposes to collect the FR 3066a, FR 3066b, and FR 3066c data
triennially. FR 3066a and FR 3066b would be repeated annually for a subset of items reported
by a relatively small number of key participants. To provide the Federal Reserve flexibility to
collect supplemental data, the FR 3066d may collect data on a triennial basis (to coincide with
the FR 3066a and FR 3066b) and, if needed, can be collected up to one time per year depending
upon data needs, timeliness, cost, and burden on respondents.
Time Schedule for Information Collection and Publication
The FR 3066a, FR 3066b, and FR 3066c surveys would be distributed by the end of the
first quarter of each year, due by the end of the second quarter, and follow-up for nonresponse,
missing items, and validation completed by the end of the third quarter. The summary report
would be released to the public in the fourth quarter of the same year and a detailed data
supplement would be released in the second quarter of the following year. Aggregate estimates
may be cited in published material such as Federal Reserve Financial Services press releases or
reports posted on the frbservices.org website, industry conference presentations, staff studies or
working papers, professional journals, the Federal Reserve Bulletin, testimony and reports to the
Congress, or other vehicles.
Legal Status
The Board’s Legal Division has determined that the FR 3066 series is broadly authorized
under sections 2A and 12A of the Federal Reserve Act. Section 2A requires that the Board of
Governors of the Federal Reserve System and the Federal Open Market Committee (FOMC)
maintain long run growth of the monetary and credit aggregates commensurate with the
economy’s long run potential to increase production, so as to promote effectively the goals of
maximum employment, stable prices, and moderate long-term interest rates (12 U.S.C. § 225a).
In addition, under section 12A of the Federal Reserve Act, the FOMC is required to implement

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regulations relating to the open market operations conducted by Federal Reserve Banks with a
view to accommodating commerce and business and with regard to the regulations’ bearing upon
the general credit situation of the country (12 U.S.C. § 263). The authority of the Federal
Reserve to collect economic data to carry out the requirements of these provisions is implicit.
Accordingly, the Federal Reserve is generally authorized to collect the information called for by
the FR 3066 series by sections 2A and 12A of the Federal Reserve Act.
In addition, the Board is responsible for implementing and drafting regulations,
interpretations, and other guidance for various payments, consumer protection, and other laws
(including provisions of the Federal Reserve Act other than those cited above). The information
obtained from the Federal Reserve Payments Study may be used in support of the Board’s
development and implementation of regulations, interpretations, and supervisory guidance for
these laws. Therefore, the survey questions in the FR 3066 are authorized pursuant to the
Board’s authority under one or more of the following statutes:
 Expedited Funds Availability Act § 609 (12 U.S.C. § 4008)
 Electronic Fund Transfer Act § 904 (15 U.S.C. § 1693b) and § 920 (15 U.S.C. § 1693o-2)
 Truth In Lending Act § 105 (15 U.S.C. § 1604)
 The Check Clearing for the 21st Century Act § 15 (12 U.S.C. § 5014)
 Federal Reserve Act § 11 (Examinations and reports, Supervision over Reserve Banks,
and Federal Reserve Note provisions, 12 U.S.C. § 248); § 11A (Pricing of Services, 12
U.S.C. § 248a); § 13 (FRB deposits and collections, 12 U.S.C. § 342); and §16 (Issuance
of Federal Reserve Notes, par clearance, and FRB clearinghouse, 12 U.S.C. §§ 248-1,
360, and 411)
Additionally, depending upon the survey respondent, the information collection may be
authorized under a more specific statute. Specifically, the Board is authorized to collect
information from state member banks under section 9 of the Federal Reserve Act (12 U.S.C.
§ 324); from bank holding companies (and their subsidiaries) under section 5(c) of the Bank
Holding Company Act (12 U.S.C. § 1844(c)); from savings and loan holding companies (12
U.S.C. §§ 1467a(b) and 5412), from Edge and agreement corporations under sections 25 and
25A of the Federal Reserve Act (12 U.S.C. §§ 602 and 625); and from U.S. branches and
agencies of foreign banks under section 7(c)(2) of the International Banking Act of 1978
(12 U.S.C. § 3105(c)(2)), and under section 7(a) of the Federal Deposit Insurance Act (12 U.S.C.
§ 1817(a)).
Participation in the survey is voluntary. Although the Board has the authority to require
participation by state member banks, bank holding companies (and their subsidiaries), savings
and loan holding companies, Edge and agreement corporations, and U.S. branches and agencies
of foreign banks supervised by the Federal Reserve, it has not done so.
Respondents to the various surveys are requested to report confidential business
information, such as information requested in the FR 3066a (for depository and financial
institutions) about the number and value of deposits in various customer accounts, broken out by
type; image check deposits vs. paper check deposits, ACH entries, wire transfers, debit and
prepaid card transactions, credit card transactions, mobile payments, and third-party fraud. The
other surveys request similar types of confidential “number and value” information appropriate

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to the surveyed entities: e.g., for the Network, Processor and Issuer Payments Survey
(FR 3066b), the number, value and type of transactions involving credit cards (both general
purpose and private label), debit cards, and prepaid cards from each of the respondents (card
networks, retail merchants, and processors). Only aggregate data from the surveys, such as
estimated volumes and trends in cash usage, noncash payments, check distribution, and
established and emerging payment instruments, are proposed to be publicly released.
Under exemption 4 of the Freedom of Information Act (FOIA) (5 U.S.C. § 552(b)(4)),
“trade secrets and commercial or financial information obtained from a person and privileged or
confidential” may be excluded from disclosure. The confidential business information collected
voluntarily from individual respondents may be withheld, as release of such information would
impair the Board’s ability to collect such information in the future. Moreover, disclosure of such
confidential business information could cause substantial competitive harm to the survey
respondents. See National Parks & Conservation Association v. Morton, 498 F.2d 765, 770
(D.C. Cir. 1974).
Consultation Outside of the Agency
As part of the survey instrument development process the Federal Reserve conducted a
request for information through FRB Atlanta procurement, which resulted in several conference
calls about the surveys with potential contractors. The team also consulted with several experts
in the private sector, including universities, trade associations, and key participants. These
conversations helped to develop proposed questions that are as relevant to and substantively
consistent with industry practices as possible.
On November 25, 2015 the Federal Reserve published a notice in the Federal Register
(80 FR 73760) requesting public comment for 60 days on the extension, with revision, of the
FR 3066a, FR 3066b, FR 3066c, and FR 3066d. The comment period for this notice expired on
January 25, 2016. The Federal Reserve received four comment letters addressing this
information collection, which are summarized and addressed below. On March 3, 2016, the
Federal Reserve published a final notice in the Federal Register (81 FR 11270) for the FR 3066.
Summary Discussion of Public Comments and Responses
The Federal Reserve received written comments from one payment industry association,
one merchant trade association, one payment card network, and one private citizen. All
commenters supported the data collection effort, and noted that the information is widely used by
payment system participants as a benchmark and to gain insights into payment system trends.
Commenters believed that providing the data requested in the surveys would generally not be
burdensome to respondents.
At the Federal Reserve’s request, contractors assisting with the survey design conducted
industry outreach calls to obtain comments on the clarity of the survey forms and the feasibility
of providing the requested data items. Institutions represented in the calls included financial
institutions, networks, and processors of several types and sizes. Specific questions were not
included in the initial request for public comment.

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A variety of revisions to the surveys resulted from outreach discussions with participants
as well, and generally involved clarifications or restatements of questions in order to address
issues brought up in these discussions. The detailed discussion below addresses the specific
substantive issues that arose from the written comments and outreach efforts, and the Federal
Reserve’s modifications to the surveys in response to the comments. In addition to these
modifications, minor clarifications would be made to the surveys in response to the comments.
Detailed Discussion of Public Comments and Responses
Depository and Financial Institution Payments Survey (FR 3066a)
The Federal Reserve proposed to collect annual 2015 data instead of one month as in the
2013 version, as the resulting data can be more easily compared with data collected in the
FR 3066b, and avoid concerns about seasonal effects. While some institutions noted an inability
to report a full calendar year of information for some items, others reported no difficulty or even
a reduction in burden. The survey will provide instructions on how to respond when annual data
is difficult to report, and will accommodate the reporting of best available information from
institutions experiencing difficulty reporting the full year. For example, the survey will
accommodate the reporting of an alternative time period, indicated via a notes field provided at
the end of each section.
Substantial clarifications have been added throughout the surveys, based on discussions
with outreach participants. These discussions led to a comprehensive set of revisions specifically
made to clarify the surveys, and thereby reduce the burden of response. A glossary of terms,
frequently asked questions document, user-friendly web tools, and an 800-number help line will
be provided to ease response. Materials will continue to be developed and clarified as necessary
to help facilitate response.
Written comments directed at the FR 3066a primarily discussed the ACH and the
Unauthorized Third-Party Payment Fraud sections. In particular, one comment argued that the
institution originating the payment is “in the best position to monitor and report on transaction
volume, value, and returns.” This argument suggested that questions about ACH debit payments
should be collected from the perspective of the originating depository financial institution
(ODFI), or the payee’s depository institution. In order to be responsive to this concern, questions
were added to collect ACH debits from this perspective. In addition, to address concerns with
the reporting of unauthorized third-party fraud payments, questions on the number of returned
ACH debits, along with a breakdown of various categories of returns were also added from the
ODFI perspective.
Consistent with the design of the sampling and estimation methods, past surveys
collected ACH debit payments and related information from the perspective of the receiving
depository financial institution (RDFI). In order to preserve comparability with past surveys and
compatibility with the sampling and estimation methods, these questions were retained. One
comment suggested that surveying RDFIs would not generate reliable data. Collecting
information from both parties to the transaction should shed light on these concerns and help to
improve understanding of the ACH data overall.

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One comment requested that a “near real-time” line item be added to the ACH section.
Meanwhile, as discussed above, concerns about the ability of depository institutions to respond
to ACH questions resulted in additional questions in the ACH section. Also, the related “sameday” settlement question was removed given the de minimus amount of such activity known to
have occurred through ACH operators in 2015. The Federal Reserve believes that, for the 2015
version of the survey, questions regarding new payment initiation methods remain in other parts
of the surveys. While settlement speed is not currently addressed in the surveys, some
alternative payment initiation methods, such as account-to-account products that may post
relatively quickly and often settle through the ACH, are measured in other sections in FR 3066a
and FR 3066b.
Additional comments expressed concerns with some ACH definitions in the survey that
may appear confusing. These definitions have been used in past surveys, however, and
participants have generally found them clear. In part, confusion about these questions may have
stemmed from the omission of some descriptive information from the posted surveys. A
glossary and fuller descriptive information on these terms are published in the detailed report and
surveys from 2013. As in past surveys, the glossary and fuller descriptions of the questions,
revised appropriately, will be provided in the complete survey distributed to participants.
One comment suggested adding questions about mobile debit card routing options
provided on debit cards. These questions were not added in the present survey, in part because
the materiality of the question has not been established. Questions about the provisioning of
mobile wallets are new to the survey, and additional questions may be added in the future if a
baseline can be established.
Networks, Processors, & Issuers Payments Surveys (FR 3066b)
Substantial clarifications have been added to the surveys, based on discussions with
outreach participants. In addition, some questions were deleted and some added based on
feedback received.
In a sweeping change affecting most surveys, a new question allowing the option to
select the preferred basis to use for allocations of detailed payments data and, separately, fraud
data was added. In the previous version of the survey, participants were asked to allocate details
on the basis of Net, Authorized and Settled transactions (NAST). NAST will remain the default
selection, but participants may choose Total authorized transactions, or Net Purchase
Transactions as the basis instead. This change is expected to substantially reduce the burden of
providing details for some respondents.
Allocations between contact and contactless payments were dropped, based on comments
suggesting such allocations would be difficult or impossible to provide.
Revisions to the general-purpose prepaid card surveys were made to make the data and
terminology more consistent with the FR 3063a Government-Administered, General Use Prepaid
Card Survey.

15

Some comments addressed specific concerns with the ability to distinguish or report
certain requested items in the survey. Our survey process is designed to accommodate such
concerns, and we will work with participants to collect those data participants can report.
The deferred payment processor survey was discontinued.
General-purpose cards
One comment requested that a question be designed to capture net chargebacks from the
general-purpose card networks. The Federal Reserve believes that the current question
“chargebacks (issuer-initiated)” is equivalent to the requested item, and could be contrasted with
the question “adjustments and returns (acquirer-initiated).” A more detailed examination of
chargebacks is beyond the scope of the current surveys.
Another comment suggested the omission of the question to identify the volumes of “3-D
secure” authentication, which is typically provided by the card networks. As an alternative, the
comment suggested including a variety of other types of authentication that might not be tracked
by or reported to the networks. Discussions with card networks suggested that the ability to
report the use of alternative authentication methods was not possible. The Federal Reserve will
retain this question, but notes that the “Online Payment Authentication Methods Processor”
survey (formerly the “Secure Online Payment Processor survey) is designed to collect
information on such other authentication methods.
Another comment addressed concerns about the collection of information on the
“tokenization” of payments from card networks. Such solutions can be implemented in various
ways by parties to the transaction. It would be difficult to comprehensively measure the variety
of tokenization schemes being used. The Federal Reserve believes it is important to collect
information from survey respondents that is feasible, even when the universe of competing
methods cannot be measured in the survey. Given that the surveys sometimes collect partial
information, it is important to recognize any limitations on new and emerging trends, especially
at the analysis and reporting stages.
A comment suggested collecting “counterfeit” fraud for remote payments. The survey
collects counterfeit card fraud, which, according to card network definitions, means that a fake
version of the card is created and used at a merchant’s point-of-sale card terminal, an in-person
situation. Remote payment fraud is classified by the card networks as an “unauthorized use of
account number.” The Federal Reserve believes this definition will capture the type of fraud
requested in the comment.
A comment requested some detail on mobile wallet provisioning. As mobile wallet
questions are new for this survey, the Federal Reserve will not expand mobile wallet questions
until a baseline can be established.

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Private-label cards
One comment requested the addition of questions on the number of cards in force with
multi-factor authentication mechanisms. The revised survey includes a question on the use of
chips for private-label cards for the first time. Additional questions may be considered once a
baseline is established.
EBT
A comment suggested collecting additional detail on authentication methods used for
EBT payments. The Federal Reserve believes that EBT payments are almost exclusively PIN
authenticated. Past survey efforts have not been successful in obtaining much detail underlying
EBT payments, and the survey detail already requested may be difficult to obtain. No additional
questions concerning authentication methods will be added at this time. If the situation
improves, the Federal Reserve will seek to collect additional relevant detail in the future.
Mobile Wallet
A comment requested clarity with respect to the definition of a remote mobile
transaction. Across all surveys, a remote payment is one in which the payment transaction is
performed remotely, regardless of where or how the good or service is obtained. In an example
with a remote card preauthorization, but with a payment made in person, the survey definition is
that the payment is an in-person payment.
A comment suggested breaking out fraudulent mobile wallet transactions into personpresent and remote categories. This requested breakout was added to the final proposed survey.
A comment suggested tracking the number of fraudulently provisioned cards to mobile
wallets. The Federal Reserve does not know how such a question should fit into the present
survey framework at this time, but believes that information on the number of fraudulent mobile
wallet transactions may serve as a useful alternative measure.
Estimate of Respondent Burden
As presented in the table below, the current annual burden for the FR 3066 surveys is
estimated to be 49,100 hours. The annual reporting burden for the proposed FR 3066 surveys
would be 48,300 hours, a decrease of 800 hours. The Federal Reserve assumes response rates
that are lower than were assumed for the current FR 3066 surveys. While current estimates of
burden assumed that all responses would be complete, the level of completeness of surveys
varied considerably. Proposed estimates of average burden hours also account for the varying
levels of completeness that are expected to arise from the adaptive design. While the number of
response items has grown since the 2013 surveys, some institutions would be asked and some
would independently choose to submit partial responses.

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Number of
respondents8

FR 3066
Current
FR 3066a
FR 3066b
FR 3066c
FR 3066d

Estimated
Estimated
Annual
average hours annual burden
frequency
per response
hours

1,350
125
150
50

1
1
1
1

35
8
3
8

47,250
1,000
450
400
49,100

1,350
125
150
50

1
1
1
1

32
8
3
12

43,200
1,000
450
600
45,250

85
15
50

2
2
2

10
5
12

1,700
150
1,200
3,050

Total
Proposed
For surveys in 2016
FR 3066a
FR 3066b
FR 3066c
FR 3066d

For surveys in 2017 and 2018
FR 3066a
FR 3066b
FR 3066d

Total

48,300

Change

( 800)

The total cost to the public is estimated to decrease from the current level of
$2,540,925 to $2,499,525 for the revised FR 3066 surveys.9
8

Of these respondents 700 for the FR 3066a, 30 for the FR 3066b, 0 for the FR 3066c, and 0 for the FR 3066d are
estimated to be small entities as defined by the Small Business Administration (i.e., entities with $550 million or less
in total assets) www.sba.gov/content/small-business-size-standards.
9
Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $17, 45% Financial Managers at
$63, 15% Lawyers at $64, and 10% Chief Executives at $87). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2014, published March 25, 2015, www.bls.gov/news.release/ocwage.nr0.htm. Occupations are defined using
the BLS Occupational Classification System, www.bls.gov/soc/.

18

Sensitive Questions
These collections of information would contain no questions of a sensitive nature, as
as defined by OMB guidelines.10
Estimated Cost to the Federal Reserve System
The cost of the surveys to the Federal Reserve System depends mostly on the cost of the
contractors engaged by the RPO to assist with the surveys. The estimated cost is $2.8 million
with the actual cost to be determined through completion of the best and final offer process and
costs contingent on outcomes in the field. The Federal Reserve anticipates that the RPO would
manage and conduct the survey process at no incremental FRS staffing cost compared with
previous efforts. No other Reserve Bank or Board staff is anticipated to be required.

10

Guidance on Agency Survey and Statistical Information Collections, January 20, 2006.

19