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on Payment Systems and Financial Technology |
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Issue of 2024‒04‒01
twenty papers chosen by |
| By: | Jean Tirole (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Tech giants' dominance does not confront us with an unpalatable choice between laissez-faire and populist interventions. This article takes stock of available knowledge, considers desirable adaptations of regulation in the digital age, and draws some conclusions for policy reform. |
| Keywords: | Regulation, Antitrust, Fairness, Industrial policy, Contestability, Mergers |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04464905&r=pay |
| By: | Paul Beaumont; Huan Tang; Éric Vansteenberghe |
| Abstract: | This paper investigates the impact of introducing junior unsecured loans via FinTech crowdlending platforms in the small business lending market. Using French administrative data, we find that FinTech borrowers experience a 20% increase in bank credit following FinTech loan origination. We establish causality using a shift-share instrument exploiting firms’ differential exposure to banks’ collateral requirements. The credit expansion only occurs when FinTech borrowers invest in new assets, and Fintech borrowers are subsequently more likely to pledge collateral to banks. This suggests that firms use FinTech loans to acquire assets that they then pledge to banks, thereby increasing their total borrowing capacity. <p> Cet article examine l'impact de l'introduction de prêts non garantis juniors via les plateforme FinTech de crowdlending sur le marché du prêt aux petites entreprises. En utilisant des données administratives françaises, nous constatons que les emprunteurs FinTech connaissent une augmentation de 20% de leur crédit bancaire suite à l'origination du prêt FinTech. Nous établissons la causalité en utilisant un instrument dit shiftshare qui exploite l'exposition différentielle des entreprises aux exigences de garantie des banques. L'expansion du crédit ne se produit que lorsque les emprunteurs FinTech investissent dans de nouveaux actifs, et ces emprunteurs FinTech sont par la suite plus susceptibles de mettre en gage des garanties aux banques. Cela suggère que les entreprises utilisent les prêts FinTech pour acquérir des actifs qu'elles mettent ensuite en gage aux banques, augmentant ainsi leur capacité d'emprunt totale. |
| Keywords: | FinTech, SMEs, small business lending; FinTech, PMEs, prêts aux petites entreprises |
| JEL: | G21 G23 G33 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:decfin:42&r=pay |
| By: | Vahidin Jeleskovic |
| Abstract: | This article presents an empirical investigation into the determinants of total revenue generated by counterfeit tokens on Uniswap. It offers a detailed overview of the counterfeit token fraud process, along with a systematic summary of characteristics associated with such fraudulent activities observed in Uniswap. The study primarily examines the relationship between revenue from counterfeit token scams and their defining characteristics, and analyzes the influence of market economic factors such as return on market capitalization and price return on Ethereum. Key findings include a significant increase in overall transactions of counterfeit tokens on their first day of fraud, and a rise in upfront fraud costs leading to corresponding increases in revenue. Furthermore, a negative correlation is identified between the total revenue of counterfeit tokens and the volatility of Ethereum market capitalization return, while price return volatility on Ethereum is found to have a positive impact on counterfeit token revenue, albeit requiring further investigation for a comprehensive understanding. Additionally, the number of subscribers for the real token correlates positively with the realized volume of scam tokens, indicating that a larger community following the legitimate token may inadvertently contribute to the visibility and success of counterfeit tokens. Conversely, the number of Telegram subscribers exhibits a negative impact on the realized volume of scam tokens, suggesting that a higher level of scrutiny or awareness within Telegram communities may act as a deterrent to fraudulent activities. Finally, the timing of when the scam token is introduced on the Ethereum blockchain may have a negative impact on its success. Notably, the cumulative amount scammed by only 42 counterfeit tokens amounted to almost 11214 Ether. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2402.19399&r=pay |
| By: | Borchert, Lea; de Haas, Ralph; Kirschenmann, Karolin; Schultz, Alison |
| Abstract: | We exploit proprietary information on severed correspondent banking relationships (due to the stricter enforcement of financial crime regulation) to assess how payment disruptions impede cross-border trade. Using firm-level export data from emerging Europe, we show that when local respondent banks lose access to correspondent banking services, their corporate borrowers start to export less. This trade decline occurs on both the extensive and intensive margins, and firms only partially substitute these foregone exports with higher domestic sales. As a result, total firm revenues and employment shrink. These findings highlight an often overlooked function of global banks: providing the payment infrastructure and trade finance that enables firms in less-developed countries to export to richer parts of the world. |
| Keywords: | Correspondent banking, trade finance, de-risking, global banks, international trade, anti-money laundering |
| JEL: | F15 F36 G21 G28 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:283585&r=pay |
| By: | Jeong Lee, So; Jin Seo, Su |
| Abstract: | The rapid evolution of digital technologies has reshaped global business, forcing not only large but also small and medium-sized enterprises (SMEs) to embrace digital trade. Nevertheless, many SMEs are struggling to fully implement digital technologies. Against this backdrop, the Republic of Korea has bolstered its support for SMEs, with a focus on human capital development, financing, and research and development. Furthermore, the country has revised its trade regulations and frameworks, placing significant emphasis on digital capacity-building and the alignment of regulations with international standards. Despite the disparities in digital infrastructure and skills, the experience of the Republic of Korea is a useful model for Latin America and the Caribbean, offering invaluable insights for policymakers, businesses and stakeholders seeking to navigate the evolving digital landscape and facilitate SME growth and internationalization. In addition, deeper collaboration could be pursued between the Republic of Korea and the region, in particular in the realms of expanding and enhancing access to information and communications technologies (ICTs), upskilling the workforce, strengthening data protection and broadening the scope of trade to include digital services. |
| Date: | 2024–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:68876&r=pay |
| By: | Martin Berka, (School of Economics and Finance, Massey University, Palmerston North); Yiran Mao (School of Economics and Finance, Massey University, Palmerston North, New Zealand) |
| Abstract: | We develop a new social media sentiment index by quantifying the tone of posts about housing on Weibo between 2010 and 2020 in 35 largest cities in China. We find that the social media sentiment index significantly predicts house price changes for up to six quarters ahead, after controlling for the economic fundamentals. A 1% increase in an accumulated social media sentiment index results in an 0.81% increase in the house price inflation the following quarter, ceteris paribus. Our results cannot be explained by changes to policy, unobserved fundamentals, or censorship bias, and survive a battery of robustness checks. We show they support theories where disperse information has direct economic effects by facilitating social learning as in Burnside et al. (2016); Bailey et al. (2018); Bayer et al. (2021) |
| Keywords: | Sentiment, social learning, house prices, China |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:mas:dpaper:2301&r=pay |
| By: | Nguyen Thanh Luan |
| Abstract: | Today's society is increasingly developing, leading to the improvement and advancement of technology, which has made the shopping needs of consumers more enhanced. The fact that consumers choose to shop online on e-commerce platforms is gradually becoming more popular and diverse. Especially not Shoppe, Lazada or Tiki but recently Tiktok is also gradually becoming a place for people to entertain, shop and it is quite popular. This creates a lot of opportunities and challenges as well as promotes the creativity and potential of businesses. Therefore, this study was created with the aim to find out and explore the factors affecting the intention to shop online on Tiktok of consumers in Ho Chi Minh City through the Public Acceptance Model Theory. Turmeric (TAM). The research method used is conditional sampling. A questionnaire will be used to collect data from consumers who often shop online to clarify the factors affecting their decision on Tiktok, namely Perceived usefulness (PUF), Perceived ease of use (PEU), Acceptance attitude (ACA), Consumer confidence (CCF), Subjective standards (SJS), Intention to use (ITU). The experts checked through the questions established through the face value and the content value to ensure the validity and reliability of the survey tool. The findings show the difference in the positive impact of surrounding factors on consumers' shopping intention on Tiktok social network in Ho Chi Minh City. |
| Keywords: | Online shopping, Tiktok social network, consumer trust, TAM |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:285117&r=pay |
| By: | Nogues-Marco, Pilar |
| Abstract: | This paper focuses on the Money Doctor Raimundo Fernández Villaverde, a prominent politician during the Restoration of the Bourbon monarchy in Spain during the Classical Gold Standard period. He reformed the fiscal system and proposed monetary reforms to transition Spain to the Gold Standard after the 1898 Cuban War of Independence. <p>His monetary reform ultimately failed due to two primary reasons. Firstly, there was a lack of political consensus, as politicians were more inclined to prioritise the distribution of spoils to sustain unstable alliances forged by local political leaders and their clientelist networks, rather than focusing on the development of long-term policies aimed at achieving party political goals. Secondly, the resistance from the Bank of Spain to reduce the circulation of banknotes to deflate the economy, with the aim of preserving its profits as a private institution that distributed dividends to its shareholders, took precedence over its role as the guarantor of exchange rate stability. |
| Keywords: | Money Doctors, Gold Standard, Monetary Orthodoxy, Exchange Rate Stability, Monetary Reform. |
| JEL: | B31 E42 E58 N13 N0 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:gnv:wpaper:unige:172857&r=pay |
| By: | Ghislain Deleplace (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis) |
| Abstract: | The purpose of the paper is to challenge two widely-held myths about Ricardo's theory of money and to suggest between the value and the quantity of money owes nothing to a commodity-theory of money (Section 2) or to the Quantity Theory of Money (Section 3) but puts the market price of the standard of money centre-stage (Section 4). Ricardo's applied pronouncements on money then appear as direct consequences of this theory (Section 5). Publication: Deleplace, G. (2023 b), "On Some Myths about Ricardo's Theory of Money, " in King, J. E. (ed.), The Anthem Companion to David Ricardo, London: Anthem Press: 9-28. hal-04257033 |
| Keywords: | Ricardo David Money Standard of money Quantity theory of money Monetary policy |
| Date: | 2022–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04429292&r=pay |
| By: | Yuya Sasaki; Jing Tao; Yulong Wang |
| Abstract: | Motivated by the empirical power law of the distributions of credits (e.g., the number of "likes") of viral posts in social media, we introduce the high-dimensional tail index regression and methods of estimation and inference for its parameters. We propose a regularized estimator, establish its consistency, and derive its convergence rate. To conduct inference, we propose to debias the regularized estimate, and establish the asymptotic normality of the debiased estimator. Simulation studies support our theory. These methods are applied to text analyses of viral posts in X (formerly Twitter) concerning LGBTQ+. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.01318&r=pay |
| By: | Zheng, T.; Glock, C.H.; Grosse, E.H. |
| Date: | 2024–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:143340&r=pay |
| By: | Bohne, Albrecht; Koumpias, Antonios M.; Tassi, Annalisa |
| Abstract: | This paper explores the connection between the proliferation of cashless, or e-money, payments and value-added tax (VAT) compliance. We present both visual and descriptive evidence that illustrates a negative correlation between e-money use and VAT evasion, proxied by the VAT compliance gap for countries in the European Union, from 2001 until 2021. We find that increased e-money usage by 100 percentage points (pp) is associated with a reduction in the VAT gap of 0.3pp or 1.92% of the aggregate VAT compliance gap over time. Moreover, we contribute a novel estimate of the causal impact of cashless payments on VAT evasion during the COVID-19 public health emergency. We identify a link between mobility restrictions in the European Union and reductions in VAT compliance gaps, facilitated by changes in payment norms. An estimated rise of 1pp or 5.51% in e-money use results in an 11.9% reduction in the VAT compliance gap. Our findings suggest that changes in transaction payment behavior such as the adoption of cashless payments may yield significantly more tax revenues by curbing non-compliance. Policies aimed at promoting e-money usage and limiting cash circulation are relevant steps forward in this direction. |
| Keywords: | Tax evasion, VAT gap, cashless payments, e-money, mobility restrictions, COVID-19 pandemic |
| JEL: | H26 K42 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:283581&r=pay |
| By: | Welker, Carl B. |
| Abstract: | The existence of bitcoins and NFTs, and perhaps also the possibility of founding a company on a blockchain network, should have gotten around after 15 years. At present, software engineers continue to work on solutions in Web3, new business activities such as coin minting, blockchain installations and the creation of Web3-related off-chain and on-chain financial products are constantly being recorded. Major law firms are making all this legally secure for banks, after most extensive legal constructions have been established, lately with Regulation (EU) 2023/1114. In view of all this, it is very surprising that there is still no precise definition of "tokens" from a business and application-oriented perspective. As it stands, the academic field is dominated by computer scientists and, after a few legal conflicts, also by lawyers. The treatment in business and management theory is falling behind. The new Web3 technologies offer considerable potential for companies in all sectors. In order to exploit this potential, the creative options of the new technology must be systematically explored and requirements such as quality and legal certainty must be met when putting them into practice. This requires precise definitions. This discussion paper examines the relevant differentiation criteria of tokens in order to then propose a more precise, selective differentiation of token classes. |
| Keywords: | Web3, Distributed Ledger Technologies, Blockchain, Tokenization, Currency Token, Asset Token, Security Token, Utility Token |
| JEL: | G30 K12 K22 L14 L15 L26 M13 O17 O32 O33 O35 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iubhbm:284391&r=pay |
| By: | Hugo Schnoering; Pierre Porthaux; Michalis Vazirgiannis |
| Abstract: | Exploring transactions within the Bitcoin blockchain entails examining the transfer of bitcoins among several hundred million entities. However, it is often impractical and resource-consuming to study such a vast number of entities. Consequently, entity clustering serves as an initial step in most analytical studies. This process often employs heuristics grounded in the practices and behaviors of these entities. In this research, we delve into the examination of two widely used heuristics, alongside the introduction of four novel ones. Our contribution includes the introduction of the \textit{clustering ratio}, a metric designed to quantify the reduction in the number of entities achieved by a given heuristic. The assessment of this reduction ratio plays an important role in justifying the selection of a specific heuristic for analytical purposes. Given the dynamic nature of the Bitcoin system, characterized by a continuous increase in the number of entities on the blockchain, and the evolving behaviors of these entities, we extend our study to explore the temporal evolution of the clustering ratio for each heuristic. This temporal analysis enhances our understanding of the effectiveness of these heuristics over time. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.00523&r=pay |
| By: | Jean-François Lemoine (ESSCA Research Lab - ESSCA - Ecole Supérieure des Sciences Commerciales d'Angers, PRISM Sorbonne - Pôle de recherche interdisciplinaire en sciences du management - UP1 - Université Paris 1 Panthéon-Sorbonne, UP1 EMS - Université Paris 1 Panthéon-Sorbonne - École de Management de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne); Maria Mercanti-Guérin (IAE Paris - Sorbonne Business School) |
| Abstract: | This article delves into the evolving landscape of digital marketing, scrutinizing its effectiveness, challenges, and future directions in the face of emerging technologies and changing consumer behaviors. It critically evaluates the role of digital tools in value creation for advertisers, examining the impact of ad blockers, privacy regulations, and the shifting dynamics of consumer engagement on digital platforms. The discussion extends to the implications of GDPR and other data protection regulations on digital advertising strategies and the potential of new technologies like AI and virtual influencers in reshaping marketing tactics. Through expert opinions, the article explores innovative approaches in digital creativity and the integration of digital experiences in physical stores, highlighting the balance between technological advancements and maintaining consumer trust and engagement. The narrative underscores the significance of understanding and adapting to these trends for sustained relevance and success in the digital marketing domain. |
| Keywords: | Digital Marketing, Consumer Engagement, Privacy Regulations, Technological Innovations. |
| Date: | 2024–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04471680&r=pay |
| By: | Ghislain Deleplace (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis) |
| Abstract: | For de Cecco power relations are central in the working of the pre-WWI international gold standard. He gives an illustration of that in the chapter of Money and Empire devoted to the relationship between Britain and India, where the gold-exchange standard is presented as a way for Britain to get hold of India's trade surplus with the rest of the world in order to balance her own international accounts. On the contrary, Keynes praised the Indian gold-exchange standard as a system which not only allowed stabilising India's relations with the outside world but also pointed the way to a better-regulated monetary system for any country, in the line of Ricardo's Ingot Plan nearly one century older. The same notion may thus be seen alternatively as a powerful tool of domination or as a good practical idea. The paper describes how Lindsay adapted Ricardo's scheme to India and contrasts de Cecco's and Keynes's interpretations of the Indian gold-exchange standard, before suggesting that monetary ideas can prevail in their own right when they are theoretically well-founded and practically feasible, independently of the power relations they may reflect. Publication: Deleplace, G. (2023 a), "Power Relations and Monetary Ideas: The Case of the Gold-Exchange Standard in India, " Review of Political Economy, 35 (2): 394-406. hal-04253424 |
| Keywords: | Gold exchange Standard, India, De Cecco, Keynes, Lindsay, Ricardo |
| Date: | 2022–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04429446&r=pay |
| By: | Emanuela Cerrato (Bank of Italy); Enrica Detto (Bank of Italy); Daniele Natalizi (Bank of Italy); Federico Semorile (Bank of Italy); Fabio Zuffranieri (Bank of Italy) |
| Abstract: | Technology providers have taken on the crucial role in supporting the financial sector, enabling firms – even small ones – to become more efficient and keep pace with innovation. Yet, the interdependencies between such providers and financial entities may pose new systemic risks, deserving the attention of financial regulators and overseers. This paper presents the authorities’ point of view, focusing on the payments sector; it demonstrates how numerous initiatives at international and national level have made a consistent and dynamic effort to create a regulatory and policy framework aimed at balancing security with innovation. |
| Keywords: | payment system, market infrastructure, third parties, digital operational resilience, DORA, regulation, oversight |
| JEL: | E42 G32 G38 O33 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wpmisp:mip_047_24&r=pay |
| By: | Carin van der Cruijsen; Marie-Claire Broekhoff |
| Abstract: | Gender gaps are widespread. The world of payments is no exception, as our research using novel survey data from Dutch households shows. First, we find that men are more likely than women to have experienced paying with a credit card or contactless via their smartphone or smartwatch. Differences in digital literacy and attitudes towards new payment instruments lie at the heart of these gender gaps, with men expressing higher levels of digital literacy and greater enjoyment when trying out new payment instruments. Second, our research shows a division of payment tasks within households. For example, men are more involved in paying housing-related costs, while women tend to be in charge of grocery payments. Finally, women have poorer payment fraud knowledge and express more fear of the digital world. Our research underscores the importance of policies aimed at improving digital literacy and fraud knowledge, especially among women. |
| Keywords: | payments; gender gap; inclusion; fraud knowledge; digital literacy |
| JEL: | D12 D83 G50 J16 J33 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:805&r=pay |
| By: | de Kruijff, Joost |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:56d6a340-42a5-4f5d-826d-7806aabcc66c&r=pay |
| By: | Saka, Orkun; Eichengreen, Barry; Aksoy, Cevat |
| Abstract: | We ask whether epidemic exposure leads to a shift in financial technology usage and who participates in this shift. We exploit a dataset combining Gallup World Polls and Global Findex surveys for some 250, 000 individuals in 140 countries, merging them with information on the incidence of epidemics and local 3G internet infrastructure. Epidemic exposure is associated with an increase in remote-access (online/mobile) banking and substitution from bank branch-based to ATM activity. The temporary nature of the effects we identify is more consistent with a demand channel rather than that of supply with high initial fixed costs. Exploring heterogeneity using a machine-learning driven approach, we find that young, high-income earners in full-time employment have the greatest tendency to shift to online/mobile transactions in response to epidemics. Baseline effects are larger for individuals with better ex ante 3G signal coverage, highlighting the role of the digital divide in adaption to new technologies necessitated by adverse external shocks. |
| Keywords: | epidemics; fintech; banking; Leverhulme Small Research Grant scheme (SRG21\211248) |
| JEL: | G20 I10 |
| Date: | 2022–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:115133&r=pay |