The 1990s witnessed a major worldwide change in the management of “wholesale” payments. Insisting that traditional Deferred Net Settlement (DNS) payment systems involve serious externalities, monetary authorities legally restricted such systems and compelled or encouraged their replacement by Real-Time Gross Settlement (RTGS) systems. The present paper argues that market failure arguments used to justify these reforms reflect a fundamental misunderstanding of the manner in which traditional DNS systems generate and assign intraday credit risk. A proper understanding of the nature and role of intraday credits in deferred net settlement supplies no market-failure rationale for government interference with traditional payments systems, suggesting that recent reforms are at most justified on second-best grounds only.