The exchange, distribution, and processing of financial instruments are core functions that drive the structure of delivery channels and payment systems, according to a recent Tower Group report, "Consumer Financial Product Delivery and Payment Systems in the U.S." With over 89 percent of the 427 billion payment transactions, cash dominates the payment system and the delivery channels that support it. Checks and credit cards generated over 90 percent of the 51 billion non-cash payment transactions in 1996.

The report adds that control and distribution of financial instruments, particularly cash, and the creation and maintenance of service provider accounts significantly differentiate the functional characteristics, efficiency, and costs of each activity.

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