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on Payment Systems and Financial Technology |
| By: | Greene, Claire (Federal Reserve Bank of Boston); Schuh, Scott (Federal Reserve Bank of Boston) |
| Abstract: | This paper describes key results from the 2016 Diary of Consumer Payment Choice (DCPC), the third in a series of diary surveys that measure payment behavior through the daily recording of U.S. consumers’ spending. In October 2016, consumers paid mostly with cash (31 percent of payments), debit cards (27 percent), and credit cards (18 percent). These instruments accounted for 76 percent of the number of payments, but only 34 percent of the total value of payments, because they tend to be used more for smaller-value payments. Electronic payments accounted for 43 percent of the value of payment but only 14 percent of the number of payments. The average value of a cash transaction was $22, compared to $112 for the average noncash transaction (and $84 for all transactions). The average value of consumers’ holdings of cash on their persons (in pocket, purse, or wallet) was $57, and the median was $24. Given uncertainty about the comparability of point estimates from the 2015 DCPC and the 2016 DCPC, this report includes confidence intervals and probability-based estimates of the changes in consumer payment behavior from 2015 to 2016. |
| Keywords: | cash; checks; checking accounts; debit cards; credit cards; prepaid cards; electronic payments; payment preferences; Diary of Consumer Payment Choice |
| JEL: | D12 D14 E42 |
| Date: | 2017–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbdr:17-7&r=pay |
| By: | Loïc Cohen (CRET-LOG - Centre de Recherche sur le Transport et la Logistique - AMU - Aix Marseille Université); Vincent Salaun (CRET-LOG - Centre de Recherche sur le Transport et la Logistique - AMU - Aix Marseille Université) |
| Abstract: | In the recent years, the mobile phone coverage expansion and the more widespread use of cash cards have eased the implementation at scale of Cash and Vouchers (C&V) programmes in the humanitarian sector. Furthermore, the development of web-based interfaces, designed to respond to the specifics needs of the sector, supports the implementation of C&V programmes. Due to the technological innovations, C&V assistance is growing rapidly and the sector seriously considers the ''e-assistance'' as an alternative to the in-kind assistance. This paper aims to investigate the potential impact of this digitalization on the humanitarian supply chain. If the literature states that C&V programming reduces cost, brings speed and serves better the needs of the beneficiaries, no real reference is made on the impact on the humanitarian supply chain. To explore this gap, the research uses the punctuated equilibria theory proposed by Eldredge and Gould (1972) and adapted for Management Sciences by several researchers such as Trushman and Romanelli (1985) or Rowe and Besson (2011). Having closes similarities with the humanitarian supply chain, a parallel is drawn with the event supply chain, which stands at a stage further in the integration of new technologies and has consequently reshaped its structures and strategies. Through a qualitative methodology based on participant observations, institutional communications and secondary data, this paper highlights how C&V supported by digitalization has created a rupture in the role of the humanitarian logistics and how humanitarian E-cash & e-vouchers: The digitalization of the humanitarian aid and logistics HICL 2017 2 organisations search to find a new equilibrium between strategy of intervention and supply chain strategy. |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01627418&r=pay |
| By: | Frank van der Horst; Jelle Miedema; Daniël Schreij; Martijn Meeter |
| Abstract: | In this online replication study we investigate if the pain of paying in cash - as opposed to paying by cards - can curb impulsive urges to purchase unhealthy or 'vice' products. This effect was found by Thomas et al (2011) when comparing the payment instruments cash and credit card. We investigate whether these results also hold in the Netherlands, where the dominant payment methods are cash and debit card. In total, 2,213 participants bought on average 12.3% more unhealthy supermarket products when paying with cards compared to cash. Participants who paid with cards bought more products in general (5.1%), however, the difference for healthy or 'virtue' products was not significant. The pattern of the mean scores per payment instrument indicate that paying with cards has a specific effect on vice purchases, but this study does not have the statistical power to show that convincingly. A regression analysis shows that the number of purchases of vice products is partly explained by paying with cards. Other explanatory variables are impulsivity, seduceability, gender, age, education and conscious eating behaviour. Pain of paying did not differ by payment instrument, but was larger for participants that paid with their usual means of payment, either debit card or cash. The present study contributes to the literature of so-called "pay cash, eat less trash" - studies, as it shows that the use of cash limits overall spending and purchases of vice products. |
| Keywords: | payment instruments; consumer behaviour; virtual reality study; pain of paying |
| JEL: | D12 D14 D18 D83 I12 E58 Z13 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:582&r=pay |
| By: | Dominique Guegan (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Labex ReFi - UP1 - Université Panthéon-Sorbonne) |
| Abstract: | La blockchain est un sujet très prisé dans le milieu bancaire et de l'assurance, de quoi s'agit-il ? La notion de blockchain émane de la cryptographie et il s'agit d'un protocole permettant de transmettre des informations de manière sécurisée. Nous distinguerons deux approches, l'approche publique décentralisée et l'approche privée centralisée. Le concept de blockchain est apparu grâce à l'émergence de crypto-monnaie et en particulier du Bitcoin. Si la blockchain doit devenir un outil important au sein des banques alors il est nécessaire d'avoir une connaissance assez juste des outils sous-jacents et des enjeux associés à cette nouvelle technologie. En effet, il apparait nécessaire d'identifier les risques qui y sont associés et de proposer des stratégies en vue de les contrôler. |
| Keywords: | Blockchain,Bitcoin,Régulation |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01673321&r=pay |
| By: | Quarles, Randal K. (Board of Governors of the Federal Reserve System (U.S.)) |
| Date: | 2017–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgsq:985&r=pay |
| By: | Alex Lamarche-Perrin (Phys-ENS); Andr\'e Orl\'ean (PSE); Pablo Jensen (Phys-ENS) |
| Abstract: | We present a simplistic model of the competition between different currencies. Each individual is free to choose the currency that minimizes his transaction costs, which arise whenever his exchanging relations have chosen a different currency. We show that competition between currencies does not necessarily converge to the emergence of a single currency. For large systems, we prove that two distinct communities using different currencies in the initial state will remain forever in this fractionalized state. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1801.04218&r=pay |
| By: | Dellaert, B.G.C. |
| Abstract: | New digital technologies not only support consumers in better fulfilling their own consumption needs, but also enable them to create greater value for other consumers. These new consumer co- production activities, collectively referred to as the sharing economy, require firms to rethink their role in the marketing value creation process. In particular, firms need to find new ways to create value for consumers who are also becoming producers. To address this challenge, we propose a two-layered conceptual framework of consumer co-production networks and the individual consumer production journeys therein. These concepts expand the traditional production model and consumer journey, respectively, explicitly taking into account consumer co-production activities in the value creation process. Within this framework, we draw on institutional design theory and household production theory to analyze how marketing functions can support consumers’ co-production activities. We conclude with a discussion of managerial and consumer welfare implications, and of new opportunities for further research. |
| Keywords: | Consumer Journey, Consumer Co-Production, Consumer Co-Production Networks, Household Economics, Sharing Economy |
| Date: | 2018–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:ems:eureri:103995&r=pay |
| By: | Dominique Guegan (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Labex ReFi - UP1 - Université Panthéon-Sorbonne, IPAG - IPAG Business School - Ipag) |
| Abstract: | Ethéreum est un protocole d'échanges décentralisés qui ne produit pas seulement une crypto-monnaie, mais permet aussi la création par les utilisateurs de smart contrats. Mais si la plateforme laisse beaucoup de libertés aux acteurs en termes de développement d'applications, des questions de sécurité et de robustesse se posent encore concernant le protocole, les plateformes, les bugs dans le code des contrats. |
| Keywords: | Blockchain,Smart Contrat,Ethéreum,régulation |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01673329&r=pay |
| By: | Alexandrov, Alexei; Bedre-Defolie, Özlem; Grodzicki, Daniel |
| Abstract: | We estimate how demand for credit card transacting, borrowing, and late payment responds to the interest rate and late payment fee. We find that lower rates increase borrowing and lower fees increase late payments. Prime cardholders demand for all services is decreasing in any price. In contrast, subprime cardholders borrow less when fees drop, a response consistent with models of limited attention. We calculate that a 2 percentage point rise in the Federal Funds rate decreases borrowing by 16 percent, or $130 billion, that this effect is greater in higher income communities, and that it exhibits geographic agglomeration. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12506&r=pay |
| By: | Paul Belleflamme; Martin Peitz |
| Abstract: | Competition between two-sided platforms is shaped by the possibility of multihoming. If initially both sides of platform singlehome, each platform provides users on one side exclusive access to its users on the other side. If then one side multihomes, platforms compete on the singlehoming side and exert monopoly power on the multihoming side. This paper explores the allocative effects of such a change from single- to multihoming. Our results challenge the conventional wisdom, according to which the possibility of multihoming hurts the side that can multihome, while benefiting the other side. This in not always true, as the opposite may happen or both sides may benefit. |
| Keywords: | Network effects, two-sided markets, platform competition, competitive bottleneck, multihoming |
| JEL: | D43 L13 L86 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_001_2018&r=pay |
| By: | Brainard, Lael (Board of Governors of the Federal Reserve System (U.S.)) |
| Date: | 2017–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgsq:984&r=pay |
| By: | Julien Prat (CREST; CNRS; Université Paris- Saclay; CESifo; IZA); Walter Benjamin (CREST; Université Paris-Saclay) |
| Abstract: | We propose a model which uses the Bitcoin/US dollar exchange rate to predict the computing power of the Bitcoin network. We show that free entry places an upper-bound on mining revenues and we devise a structural framework to measure its value. Calibrating the model’s parameters allows us to accurately forecast the evolution of the network computing power over time. We establish the accuracy of the model through out-of-sample tests and investigation of the entry rule. |
| Keywords: | Bitcoin; Blockchain; Miners; Industry Dynamics |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2017-15&r=pay |
| By: | Klein, Thilo |
| Abstract: | I examine the role of intermediaries on the world's largest peer-to-peer online lending platform. This marketplace as well as other recently opened lending websites allow people to auction microcredit over the internet and are in line with the disintermediation in financial transactions through the power of enabling technologies. On the online market, the screening of potential borrowers and the monitoring of loan repayment can be delegated to designated group leaders. I find that, despite superior private information, these financial intermediaries perform worse than the average lender with respect to borrower selection. I attribute this to deliberately sending wrong signals. Bivariate probit estimates of the effect of group membership on loan default indicate positive self selection into group loans. That is borrowers with worse observed and unobserved characteristics select into this contract form. I provide evidence that this is due to a missleading group reputation system that is driven by a short term incentive design, which was introduced by the platform to expand the market and has been discontinued. I further find that, after controlling for this group growth driven selection effect, group affliation per se significantly reduces the probability of loan default. |
| Keywords: | peer-to-peer,finance,market design,matching,auctions |
| JEL: | D02 D82 G21 O16 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:17073&r=pay |
| By: | Hayashi, Fumiko (Federal Reserve Bank of Kansas City); Rosenbaum, Aaron; Stewart, Kylie; Manuszak, Mark D.; Baughman, Garth (Federal Reserve Bank of Kansas City); Stavins, Joanna (Federal Reserve Bank of Kansas City) |
| Abstract: | This paper reports on a research effort by Federal Reserve staff to examine market structure implications in the still‐emerging faster payments market. The analysis and conclusions in this paper are those of the authors and do not indicate official positions of the Board of Governors or Federal Reserve System. Although this paper offers several considerations regarding the U.S. faster payments market, it does not make specific policy recommendations or provide a view on the potential roles, including service provider or other roles, that the Federal Reserve may play in this market.2 Given the nascent state of the faster payments market, many of the matters discussed in this paper are not yet settled. The paper is intended to provide background and a framework for future dialogue and research in this area. |
| Keywords: | Payments; Market structure; Dominant-operator environment; Multi-operator environment |
| JEL: | G21 |
| Date: | 2017–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp17-14&r=pay |
| By: | Lerch, Christian; Jäger, Angela; Maloca, Spomenka |
| Abstract: | Die Digitalisierung der Produktion wird eine der großen Herausforderungen für die nächsten Jahre oder gar Jahrzehnte sein. Die Zukunftsvision der Industrie 4.0 stellt Produktivitätsfortschritte, Innovationspotenziale, Flexibilitätssprünge und Ressourceneinsparungen in Aussicht. Allerdings wird auch die Gefahr gesehen, dass Arbeitsplätze verloren gehen und der deutsche Mittelstand möglicherweise vom Trend der Digitalisierung abgehängt wird, woraus ein Verlust seiner Wettbewerbsfähigkeit folgen würde. Hieraus ergibt sich die Frage, wo das Verarbeitende Gewerbe in Deutschland derzeit bei der Industrie 4.0 steht und welche Schlussfolgerungen aus dem Einsatz grundlegender digitalter Technologien für Betriebe tatsächlich gezogen werden können? Die folgenden Analysen geben auf Basis der I4.0-Readiness-Index des Fraunhofer ISI erste Antworten: Die Nutzung digitaler Technologien für Produktionsprozesse ist noch kein Standard im Verarbeitenden Gewerbe in Deutschland. Nur einige Branchen nutzen in größerem Umfang umfassend fortgeschrittene digitale Lösungen. Kleine und mittlere Betriebe benötigen hingegen noch passfähige Lösungen. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisibu:71&r=pay |
| By: | DiGabriele, Jim; Ojo, Marianne |
| Abstract: | The digital economy, undoubtedly, has contributed to the immense task of clearly identifying, ascertaining, and accounting for sources, rationales, and audit trails relating to tax transactions. This is not only evident owing to difficulties associated with cross-border transaction regulations which govern different jurisdictions as well as the enforcement of such regulations, but also in respect of risks associated with the present global financial environment – all having generated from the rise in automation, increased and improved sophisticated technologies, globalization, and conglomeration. This chapter not only seeks to highlight the extent, contribution, and significance of the digital economy in respect of those risks associated with base erosion and profit shifting (BEPS) but also amongst other aims and objectives to recommend measures whereby regulations can be better enforced as a means of addressing practices associated with BEPS. |
| Keywords: | Multilateral Instruments; Joint Audits; Aggressive Tax Planning Schemes; Digital Economy; Transfer Pricing; Global Value Chains; Cross Sectional Services Risks |
| JEL: | E6 F4 K2 M41 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83734&r=pay |
| By: | Bhattacherjee, Sanjay; Sarkar, Palash |
| Abstract: | This work shows that weighted majority voting games occur in cryptocurrencies. In particular, two such games are highlighted. The first game, which we call the Rule Game, pertains to the scenario where the entities in the system engage in a voting procedure to accept or reject a change of rules. The second game, which we call the Attack Game, refers to the scenario where a group of entities in a cryptocurrency system can form a coalition to engage in double spending. For the Rule Game we provide analysis to argue that the Coleman’s preventive power measure is the appropriate tool for measuring a player’s influence in the game while for the Attack Game, we define a notion of stability based on the notion of minimal winning coalitions. For both the Rule Game and the Attack Game, we show how to analyse the games based on a snapshot of real world data for Bitcoin which is presently the most popular of all the cryptocurrencies. |
| Keywords: | Voting games, Cryptocurrency, Bitcoin, preventive power, stability |
| JEL: | C15 C71 D72 D74 Y10 Y20 Y80 |
| Date: | 2017–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83592&r=pay |
| By: | Hunold, Matthias; Kesler, Reinhold; Laitenberger, Ulrich; Schlütter, Frank |
| Abstract: | We analyze the best price clauses (BPCs) of online travel agents (OTAs) using meta-search price data of nearly 30,000 hotels in different countries. We find that BPCs influence the pricing and availability of hotel rooms across online sales channels. In particular, hotels publish their offers more often at Booking.com when it does not use the narrow BPC, and also tend to promote the direct online channel more actively. Moreover, the abolition of Booking.com's narrow BPC is associated with the direct channel of chain hotels having the strictly lowest price more often. |
| Keywords: | best price clauses,hotel booking,MFN,OTA,vertical restraints |
| JEL: | D40 L42 L81 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:278&r=pay |
| By: | Preißner, Stephanie; Raasch, Christina; Schweisfurth, Tim |
| Abstract: | This study investigates the origins of disruptive innovation. According to the canonical model, disruptive innovations do not originate from existing customers - in contrast with what the user innovation literature would predict. We compiled a unique historical and content-analytic dataset based on 62 cases identified from the disruptive innovation literature. We found that 44% of the disruptive innovations in this sample were originally developed by users. Disruptive innovations are more likely to originate from users (producers) if the environment is characterized by high levels of turbulence in customer preferences (technology). Disruptive innovations involving high functional (technological) novelty, tend to be developed by users (producers). Users are also more likely to be the source of disruptive process innovations, and to innovate in weaker appropriability environments. Our paper is among the first to link the disruptive and user innovation literatures. We contribute to both and offer guidance to managers on the likely source of disruptive threats. |
| Keywords: | user innovation,disruptive innovation,market orientation,radical innovation,environmental turbulence |
| JEL: | D83 L17 M19 O31 O34 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2097&r=pay |
| By: | Martha Bailey; Connor Cole; Morgan Henderson; Catherine Massey |
| Abstract: | New large-scale data linking projects are revolutionizing empirical social science. Outside of selected samples and tightly restricted data enclaves, little is known about the quality of these “big data” or how the methods used to create them shape inferences. This paper evaluates the performance of commonly used automated record-linking algorithms in three high quality historical U.S. samples. Our findings show that (1) no method (including hand linking) consistently produces samples representative of the linkable population; (2) automated linking tends to produce very high rates of false matches, averaging around one third of links across datasets and methods; and (3) false links are systematically (though differently) related to baseline sample characteristics. A final exercise demonstrates the importance of these findings for inferences using linked data. For a common set of records, we show that algorithm assumptions can attenuate estimates of intergenerational income elasticities by almost 50 percent. Although differences in these findings across samples and methods caution against the generalizability of specific error rates, common patterns across multiple datasets offer broad lessons for improving current linking practice. |
| JEL: | J62 N0 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24019&r=pay |
| By: | Athreya, Kartik B.; Mustre-del-Rio, Jose (Federal Reserve Bank of Kansas City); Sanchez, Juan M. |
| Abstract: | Using recently available proprietary panel data, we show that while many (35%) US consumers experience fi nancial distress at some point in the life cycle, most of the events of nancial distress are primarily concentrated in a much smaller proportion of consumers in persistent trouble. Roughly 10% of consumers are distressed for more than a quarter of the life cycle, and less than 10% of borrowers account for half of all distress events. These facts can be largely accounted for in a straightforward extension of a workhorse model of defaultable debt that accommodates a simple form of heterogeneity in time preference but not otherwise. |
| Keywords: | Default; Fi nancial distress; Consumer credit; credit card debt |
| JEL: | D60 E21 E44 |
| Date: | 2017–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp17-15&r=pay |