nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2016‒05‒28
four papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. E-commerce in Europe: parcel delivery prices in a digital single market By J. Scott Marcus; Georgios Petropoulos
  2. The nature of Bitcoin and some practical aspects of its use by business By Aleksei Churilov
  3. Money demand in the Arab Republic of Egypt : a vector equilibrium correction model By Rostom,Ahmed Mohamed Tawfick
  4. The topology of card transaction money flows By Massimiliano Zanin; David Papo; Miguel Romance; Regino Criado; Santiago Moral

  1. By: J. Scott Marcus; Georgios Petropoulos
    Abstract: Highlights In its Digital Single Market strategy, the European Commission has rightly noted the importance of reducing the price paid for basic cross-border parcel delivery by consumers and by small and medium size retail senders. The payment flows for cross-border parcel delivery are strikingly similar to those for telecommunications. Comparisons with roaming can be instructive. As with roaming, it is clear that the links between wholesale payments between the national postal operators and retail prices need to be properly understood in order to craft good policy. Another useful lesson is that national postal regulatory authorities are unlikely to address cross-border problems because of limitations in their respective mandates and because they have no incentive to take measures to benefit residents of other countries. There are also significant differences between roaming and parcel delivery. While high wholesale charges were a major driver of high retail prices for international mobile roaming, the wholesale payments for cross-border parcel delivery appear to be below cost. This implies that it is the ‘spread’ between retail price and the wholesale payment that is inflated, at least for small retail senders and for consumers. Comprehensive statistics gathering, coordinated at European level, is indispensable.
    Date: 2016–05
  2. By: Aleksei Churilov (Tomsk State University)
    Abstract: Cryptocurrencies have become very popular in past few years. At recent time Bitcoin holds a dominant position on cryptocurrency markets. Lots of economists, programmers, bloggers, even lawyers call Bitcoin “money of the future†or “a pure means of payment†. But is Bitcoin and cryptocurrencies the money in the classic meaning of this phenomenon? Economic theory identifies money through the role that it plays in society, but can Bitcoin fulfill these functions? This paper discusses the nature of Bitcoin from the economic and legal perspective.Despite all controversies Bitcoin is used in business. Bitcoins and their use are a very actual issue, especially with a high popularity and high cost of Bitcoins. The paper covers the issue of legal status of Bitcoin and how can it be used in business activity, including examination of both advantages, such as “free advertisement†, simplicity, and other and disadvantages, such as security risks, uncertainty in a legal status, etc. Because of very different approaches to regulation of Bitcoin in different national jurisdictions, therefore this paper is interested in a comparative analysis of a regulation of Bitcoin’s legal status in different national jurisdictions.
    Keywords: Bitcoin, business, legal status, virtual currency
  3. By: Rostom,Ahmed Mohamed Tawfick
    Abstract: Money demand is critical for defining monetary policy options and is not driven necessarily by developed country standards of transaction demand, speculation motive, and opportunity costs grounded by fully functioning financial markets. However, market imperfections in less developed economies can also play a critical role in the dynamics of demand for money. This paper estimates a vector equilibrium correction model to investigate the nature of short-term and long-term interactions for money demand in the Arab Republic of Egypt. The paper concludes that real money demand in Egypt during (1958-2013) is stable and can be considered confidently by monetary authorities to adjust for long-term growth in the real economy. The rate of devaluation of the official exchange rate and inflation have a serious effect on the public's trust in the national currency in the long term. Money is not neutral for long-term portfolio decisions, because of the increase in real income in the economy that couples with an uptrend in monetization as the ratio of money stock over output also uptrends. The paper also provides quantitative evidence that the devaluation within the parallel market is negatively related to the change in demand for real money balances in the short term. Economic agents hold more domestic currency if the official exchange rate slides, and arbitrage opportunities are sought in the parallel market.
    Keywords: Currencies and Exchange Rates,Debt Markets,Economic Theory&Research,Emerging Markets,Fiscal&Monetary Policy
    Date: 2016–05–18
  4. By: Massimiliano Zanin; David Papo; Miguel Romance; Regino Criado; Santiago Moral
    Abstract: Money flow models are essential tools to understand different economical phenomena, like saving propensities and wealth distributions. In spite of their importance, most of them are based on synthetic transaction networks with simple topologies, e.g. random or scale-free ones, as the characterisation of real networks is made difficult by the confidentiality and sensitivity of money transaction data. Here we present an analysis of the topology created by real credit card transactions from one of the biggest world banks, and show how different distributions, e.g. number of transactions per card or amount, have nontrivial characteristics. We further describe a stochastic model to create transactions data sets, feeding from the obtained distributions, which will allow researchers to create more realistic money flow models.
    Date: 2016–02

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