This paper examines how the production of payment services impacts the franchise value of banks. It also explores whether analysis are incorrectly measuring the performance of the banking sector and failing to realize the full importance of payments-driven revenues to banks. In initial empirical...

This paper estimates the volume of payments-driven revenues at the top 40 domestic BHCs and builds on the statistical summaries that Radecki (1999) compiles from the top 25 BHCs in 1996. We replicate Radecki's 1996 results, but find that they overstate payments-driven revenues by including...