nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2016‒05‒14
fourteen papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Cashless Payments and the Persistence of Cash: Open Questions About Mexico By Gustavo A. Del Angel
  2. Marketplaces for digital data: Quo vadis? By Stahl, Florian; Schomm, Fabian; Vomfell, Lara; Vossen, Gottfried
  3. Colonial American Paper Money and the Quantity Theory of Money: An Extension By Farley Grubb
  4. Digital Currencies, Decentralized Ledgers, and the Future of Central Banking By Max Raskin; David Yermack
  5. Mobile Money, Agricultural Marketing, and Off-Farm Income in Uganda By Sekabira, Haruna; Qaim, Matin
  6. Constructing socio-demographic indicators for National Statistical Institutes using mobile phone data: Estimating literacy rates in Senegal By Schmid, Timo; Bruckschen, Fabian; Salvati, Nicola; Zbiranski, Till
  7. Altcoins By Anna Wiœniewska
  8. The Role of ICT in Reducing Information Asymmetry for Financial Access By Simplice Asongu; Bertrand Moulin
  9. An Examination of Consumer Willingness to Pay for Local Products By Adalja, Aaron; Hansen, James; Towe, Charles; Tselepidakis, Elina
  10. Places and spaces in the weightless economy By Huiwen Gong
  11. Financial technological Innovation and Access is the Key to Unlocking African Agricultural Potential: A Case Study of Dairy in Kenya By Pambo, Kennedy
  12. The Status of Financial Inclusion, Regulation, and Education in India By Barua, Abheek; Kathuria, Rajat; Malik, Neha
  13. Towards the massification of broadband internet access in Brazil: an application of alternative dispute resolution settlement of administrative proceedings. By Charlita de Freitas, Luciano; Fagundes Ferreira, Flávio; Bernardes da Silva Júnior, Osmar; Azevedo Marques Mello da Silva, João Marcelo; Vilas Boas de Freitas, Igor
  14. The Impact of Software Piracy on Inclusive Human Development: Evidence from Africa By Asongu, Simplice; Andrés, Antonio R.

  1. By: Gustavo A. Del Angel
    Abstract: This essay analyzes the trends in payments in Mexico since 2002 and argues that there has been an important growth in the use of cashless digital payment instruments, namely the use of credit and debit cards, electronic funds transfers (EFTs) and mobile banking. However, the use of cash widely persists in the Mexican economy. The essay discusses the factors behind the persistence of the use of cash, and argues that low financial inclusion and informal economic activity are considered the main causes. Equally relevant is the fact that digital instruments are not a perfect substitute for cash as money yet, as it is the need to adequate payments services to the convenience and trust of segments of users, mainly population that still has little use or no access to financial services.
    JEL: E42 G20 G21 O32 E49
    Date: 2016–05
  2. By: Stahl, Florian; Schomm, Fabian; Vomfell, Lara; Vossen, Gottfried
    Abstract: The newly emerging market for data is insufficiently researched up to now. The survey presented in this work - which is the third iteration of a a series of studies that started in 2012 - intends to provide a deeper understanding of this emerging type of market. Research questions concerning the provider manifestations and the commoditization of data are identified. The findings indicate that data providers focus on limited business models and that data remains individualized and differentiated. Nevertheless, a trend towards commoditization for certain types of data can be foreseen, which even allows an outlook to further developments in this area.
    Keywords: Cloud Computing,Data as a Service,Data Marketplace,Data Marketplace Survey,Data Marketplace Development
    Date: 2015
  3. By: Farley Grubb
    Abstract: The quantity theory of money is applied to the paper money regimes of seven of the nine British North American colonies south of New England. Individual colonies, and regional groupings of contiguous colonies treated as one monetary unit, are tested. Little to no statistical relationship, and little to no magnitude of influence, between the quantities of paper money in circulation and prices are found. The failure of the quantity theory of money to explain the value and performance of colonial paper money is a general and widespread result, and not an isolated and anomalous phenomenon.
    JEL: E31 E42 E51 N11
    Date: 2016–04
  4. By: Max Raskin; David Yermack
    Abstract: Central banking in an age of digital currencies is a fast-developing topic in monetary economics. Algorithmic digital currencies such as bitcoin appear to be viable competitors to central bank fiat currency, and their presence in the marketplace may pressure central banks to pursue tighter monetary policy. More interestingly, the blockchain technology behind digital currencies has the potential to improve central banks’ payment and clearing operations, and possibly to serve as a platform from which central banks might launch their own digital currencies. A sovereign digital currency could have profound implications for the banking system, narrowing the relationship between citizens and central banks and removing the need for the public to keep deposits in fractional reserve commercial banks. Debates over the wisdom of these policies have led to a revival of interest in classical monetary economics.
    JEL: E42 E51 E52 E58 G21
    Date: 2016–05
  5. By: Sekabira, Haruna; Qaim, Matin
    Abstract: Mobile money (MM) services can contribute to welfare gains in smallholder farm households. Previous research showed that one important pathway is through higher remittances received from relatives and friends. Here, the role of other impact pathways is examined, especially focusing on agricultural marketing and off-farm economic activities. The analysis builds on panel data from smallholder coffee farmers in Uganda. Regression models show that the adoption of MM technology has contributed to higher household incomes and consumption levels. Off-farm income gains are identified to be an important pathway, also beyond remittances. Typical off-farm income sources are small businesses in trade, transport, and handicrafts, which benefit from novel savings and money transfer opportunities through MM. In terms of agricultural marketing, MM users sell a larger proportion of their coffee as shelled beans to buyers in high-value markets, instead of selling to local traders immediately after harvest. MM services help reduce cash constraints and facilitate transactions with buyers from outside local regions. In conclusion, MM can contribute to rural development through various important pathways. Analysis of adoption patterns suggests that MM services are socially inclusive.
    Keywords: mobile phones, rural banking, smallholder farmers, impact evaluation, Africa, Agricultural Finance, Community/Rural/Urban Development, Consumer/Household Economics, Financial Economics, Food Security and Poverty, Research and Development/Tech Change/Emerging Technologies, O12, O16, O33, Q12,
    Date: 2016–04
  6. By: Schmid, Timo; Bruckschen, Fabian; Salvati, Nicola; Zbiranski, Till
    Abstract: Modern systems of official statistics require the accurate and timely estimation of socio-demographic indicators for disaggregated geographical regions. Traditional data collection methods such as censuses or household surveys impose great financial and organizational burdens for National Statistical Institutes. The rise of new information and communication technologies offers promising sources to mitigate these shortcomings. In this paper we propose a unified approach for National Statistical Institutes based on small area estimation that allows for the estimation of socio-demographic indicators by using mobile phone data. In particular, the methodology is applied to mobile phone data from Senegal for deriving sub-national estimates of the share of illiterates disaggregated by gender. The estimates are used to identify hot spots of illiterates with a need for additional infrastructure or policy adjustments. Although the paper focuses on literacy as a particular socio-demographic indicator, the proposed approach is applicable to indicators from national statistics in general.
    Keywords: indicators,model-based estimation,official statistics,small area estimation
    Date: 2016
  7. By: Anna Wiœniewska (Nicolaus Copernicus University)
    Abstract: The aim of this article is to present altcoins that seem to be most promising. The author has made an attempt at answering the questions about the reasons for their creation and if any of them is strong enough to undermine Bitcoin's position among virtual currencies. In order to find the answers there have been used the literature on the subject as well as available internet sources since the Internet is the environment in which cryptocurrencies and their makers function. The research demonstrates that among over 600 existing cryptocurrencies there exists a group of quite interesting projects. These projects has not always been targeted at creation of a new cryptocurrency: some of them have been aimed at implementing the technology used by Bitcoin in other spheres of human activity, e.g. to collect data. There have been presented three Polish cryptocurrencies, whose history shows how uncertain it is to achieve success at the market of virtual currencies even if a created cryptocurrency is believed to be well-prepared to debut. The more we get to know about the way in which altcoins function, the more we will be able to predict if it is just a passing fad or the beginning of the new age of online payments.
    Keywords: cryptocurrencies; polish cryptocurrencies; ethereum, litecoin
    JEL: E42 E49 E51
    Date: 2016–05
  8. By: Simplice Asongu (Yaoundé/Cameroun); Bertrand Moulin (Yaoundé/Cameroun)
    Abstract: This study assesses the role of ICT in complementing private credit bureaus (PCB) and public credit registries (PCR) in reducing information asymmetry for financial access. The empirical evidence is based on Generalised Method of Moments with 53 African countries for the period 2004-2011. The following findings are established. First on financial access: (i) the marginal effects from interactions between ICT and PCR (PCB) are consistently positive (negative); (ii) net effects from interactions are negative with the higher magnitude from PCR and (iii) only thresholds corresponding to interactions between PCR and internet penetration are within range. Second, findings on financial allocation efficiency reveal positive marginal and net effects exclusively for mobile phones and PCR. Third, allocation efficiency may be constrained by increasing financial deposits. Overall, the complementarity between information offices and ICT in boosting financial access is still very limited. Policy implications are discussed with emphasis on improving the engaged complementarity and fighting surplus liquidity.
    Keywords: Financial access; Information asymmetry; ICT
    JEL: G20 G29 L96 O40 O55
    Date: 2016–01
  9. By: Adalja, Aaron (University of Maryland); Hansen, James (University of Maryland); Towe, Charles (University of Connecticut); Tselepidakis, Elina (University of Maryland)
    Abstract: This paper uses data collected from hypothetical and non-hypothetical choice-based conjoint survey instruments to estimate willingness to pay for distance-based local food products. The survey was administered to three different groups of respondents: members of a consumer buying club with local and grass-fed market experience, a random sample of Maryland residents, and shoppers at a non-specialty suburban Maryland grocery store. We find that both the random sample of Maryland residents and the grocery store shoppers are willing to pay a premium for local products, but view local and grass-fed production as substitutes. Conversely, members of the consumer buying club are willing to pay significantly less for local than their counterparts, but do not conflate local with other premium attributes, such as grass-fed production.
    Keywords: conjoint analysis, field experiment, local, grass-fed, willingness to pay, beef
    Date: 2014–09
  10. By: Huiwen Gong (Kiel University, Germany)
    Abstract: Proposition of the 'end of geography' based on globalization and digitalization has been havily criticized by different geographers in the last decades. This paper mainly focus on the digitalization side of debate because of the more obvious and contradictory relationships between geography and digital production/consumption. Based on a systemic reflection on the literature in new media industry in general, and video game industry in particular, this paper bridges two different strings of research in the weightless economy. By referring to previous respondents' opinions as well as extracting new ideas from other empirical studies, this paper organizes its arguments in a comprehensive way and supports these arguments with abundant empirical evidence found in different case studies. It contributes to economic geographers' side of debate on the role of geography in today's weihgtless economy
    Keywords: the weightless economy, the end of geography, new media, video game industry
    JEL: A14 D20
    Date: 2016–04–14
  11. By: Pambo, Kennedy
    Abstract: In Kenya agriculture contributes 24% to the GDP yet lending to the sector is only about 4%. A major constraint to increasing efficiency in smallholder enterprises in rural areas is therefore, limited access to financial services. Lack of working capital for traders in rural areas inhibits the purchase, trade and processing of agricultural produce. This limits the amount of produce a farmer can market and acts as a disincentive to reaching his/her productive potential. Furthermore, most Microfinance Institutions (MFIs) lack a value chain approach to financing and are unable to remove the financial constraints along a specific value chain. Appropriate financing services along the value chain can help to enhance the productivity and profitability of various small-scale rural stakeholders. Therefore, the study assessed the prospects for financial innovations and access in improving dairy farmers’ livelihoods through a case study approach. The findings provide a strong evidence that appropriate financial innovation is the missing link in agricultural productivity paradigm and the food security equation in African countries including Kenya.
    Keywords: Agriculture, Financial access, Innovations, Farmers, Agricultural and Food Policy, Agricultural Finance, Farm Management, Q14,
    Date: 2015
  12. By: Barua, Abheek (Asian Development Bank Institute); Kathuria, Rajat (Asian Development Bank Institute); Malik, Neha (Asian Development Bank Institute)
    Abstract: India’s financial inclusion agenda has witnessed a paradigm shift over the last decade, away from an emphasis on credit to a more comprehensive approach toward financial services (e.g., opening bank accounts and offering basic financial products, such as insurance). This paper describes the structure of banking and microfinance institutions in India relevant to the developing model of financial inclusion, as well as relevant regulatory structure and modes of delivery. It explains the current state of financial inclusion, as well as regulatory changes necessary to make the new architecture for inclusion viable, including a critique of some of the recommendations of the Mor Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households. The paper then reviews modes of delivery and the regulatory structure being contemplated or recently introduced. It assesses the suitability objective envisaged as critical for inclusion, associated challenge of revamping consumer protection laws, and imperative of improving financial literacy. The paper also discusses the case of micro, small, and medium-sized enterprises in the given context.
    Keywords: India’s financial inclusion; microfinance institutions; financial literacy; consumer protection laws
    JEL: G21 G28 L53 O16
    Date: 2016–05–02
  13. By: Charlita de Freitas, Luciano; Fagundes Ferreira, Flávio; Bernardes da Silva Júnior, Osmar; Azevedo Marques Mello da Silva, João Marcelo; Vilas Boas de Freitas, Igor
    Abstract: In 2012, the Brazilian Telecommunications Regulatory Agency (Anatel) ruled the Conduct Adjustment Commitment (TAC). It refers to an alternative dispute resolution mechanism that allows shifting pecuniary penalties into infrastructure investments. This case study approaches the setting up of strategic investment projects and the definition of a methodology framework set to maximize the benefits of resource allocation. To reach its objective 5,565 municipalities were divided in clusters and ranked according to priority destination for investments. Results include a short list of preferential projects focused on enhancing broadband infrastructure, encouraging the competition and to enhance quality of services performance. Outputs of the methodology suggest that municipalities located at the outskirt of metropolitan regions, evenly distributed throughout the country, with relative lower HDI and higher demographic density are the top ranked destination for investment.
    Keywords: Alternative dispute resolution settlement; enforcement proceedings; cluster analysis; broadband infrastructure investment; TAC; Telecomnuicações; Brazil.
    JEL: K23 L5 L96 O2
    Date: 2016–02–01
  14. By: Asongu, Simplice; Andrés, Antonio R.
    Abstract: The study examines the effect of software piracy on inclusive human development in 11 African countries for which software piracy data is available for the period 2000-2010. The empirical evidence is based on instrumental variable panel Fixed Effects (FE) and Tobit models in order to control for the unobserved heterogeneity and limited range in the dependent variable. The modeling exercise is based on the inequality adjusted human development (IHDI) and its constituents. The following main findings are established. First, from the FE regressions, software piracy consistently improves the IHDI and its constituents. Within this framework, the positive relationship between inclusive human development and software piracy is driven by all its constituents. Second, for Tobit regressions, the positive relationship between software piracy and inclusive human development is confirmed exclusively in the IHDI and literacy specifications. Within the latter framework, the positive relationship between software piracy and inclusive human is driven fundamentally by the literacy rate. Policy implications are discussed.
    Keywords: Software piracy; Human development; Intellectual property rights; Panel data, Instrumental variables
    JEL: K42 O34 O38 O47 O57
    Date: 2015–12

This nep-pay issue is ©2016 by Bernardo Bátiz-Lazo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.