An e-commerce payment system facilitates the acceptance of electronic payment for online transactions. Also known as Electronic Data Interchange (EDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking. The smooth operation of payment systems is often taken for granted both in the academic literature on financial integration and in practical policy considerations. In general, the main role of payment system regulators is to provide a level playing field for different service providers. To secure dynamic efficiency, the regulators also need to ensure adequate incentives for innovation and investment. In this respect, it is important that they do not take too restrictive an attitude towards cooperation among payment service providers.

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