nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2016‒06‒25
seventeen papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. A Review on Advanced Security Solutions in Online Banking Models By Aithal, Sreeramana
  2. The consumption of cultural goods through the internet. How is it affected by the digital divide? By Victoria Ateca-Amestoy; Concetta Castiglione
  3. Challenging prospects for roam like at home By Georgios Petropoulos; J. Scott Marcus
  4. Distributed ledger technologies in securities post-trading - Revolution or evolution? By Pinna, Andrea; Ruttenberg, Wiebe
  5. Introdução à “Deep Web” [Introduction to "Deep Web"] By David Duarte; Tiago Mealha
  6. The Transformation of the Role and Tasks of the Central Bank (Monetary Authorities) in the Modern Economy By Kiyutsevskaya, Anna; Narkevich, Sergei; Trunin, Pavel
  7. Stimulating digital innovation for growth and inclusiveness: The role of policies for the successful diffusion of ICT By OECD
  8. Has Uber Made It Easier to Get a Ride in the Rain? By Brodeur, Abel; Nield, Kerry
  9. Consumption Network Effects By Giacomo De Giorgi; Anders Frederiksen; Luigi Pistaferri
  10. New Skills for the Digital Economy By OECD
  11. DigComp 2.0: The Digital Competence Framework for Citizens. Update Phase 1: the Conceptual Reference Model. By Riina Vuorikari; Yves Punie; Stephanie Carretero Gomez; Godelieve Van Den Brande
  12. Economic and Social Benefits of Internet Openness By OECD
  13. The payment system benefits of high reserve balances By McAndrews, James J.; Kroeger, Alexander
  14. Big Data Is a Big Deal But How Much Data Do We Need? By Askitas, Nikos
  15. Türkiye’de Tüketici Haklarının Gelişimi Ve Hak Arama Yolu Olarak İnternet By Tunç, Süleyman
  16. Big Data Applications and Prospects in Precision Agriculture By Tamirat, Tseganesh Wubale; Farquharson, Robert
  17. Pirated Economics By Babutsidze, Zakaria

  1. By: Aithal, Sreeramana
    Abstract: Online banking using mobile devices (mobile banking) is an effective and convenient way of providing electronic banking facility to customers from anywhere and at any time. The advent of mobile communication technology coupled with a boost in trade and commerce activity is increasingly driving the banking financial services to become ubiquitous, personalized, convenient, disseminative and secure. Realizing the advantages to be gained from mobile banking, financial institutions have begun to offer mobile banking options for their customers in addition to the internet banking they already provide. The large scale use of mobile phones in mobile banking has been closely followed by the increase in mobile fraud. Although eager to use mobile financial services, many subscribers are concerned about the security aspect when carrying out financial transactions over the mobile network. In fact, lack of security is seen as the biggest deterrent to the widespread adoption of mobile financial services. Hence, fraud prevention has become an essential ingredient in the success of online financial transactions. To enhance the security for the online financial transaction, a biometric fingerprint authentication system is proposed. In this paper, the feasibility and limitations of an advanced biometric fingerprint authentication system for mobile banking are discussed.
    Keywords: Online financial transaction, bio-metric authentication, ubiquitous banking, mobile business.
    JEL: G2
    Date: 2016–04
  2. By: Victoria Ateca-Amestoy (Department of Fundamentos del Análisis Económico II. University of the Basque Country. Avda. Lehendakari Aguire, 83. 48015, Bilbao (Spain)); Concetta Castiglione (Department of Statistical Sciences, University of Bologna, Via delle Belle Arti, 41 - 40126 Bologna (Italy))
    Abstract: Cultural engagement through the internet is becoming a more popular way of cultural participation, as computers and mobile devices are the outlet for more cultural experiences. On the one hand, this may help to access a wider variety of cultural contents in the form of digital goods. On the other hand, the digital divide could further exacerbate the stratification of cultural consumption. Using data from the 2012 Survey of Public Participation in the Arts for the United States, we explain the determinants of cultural participation through digital engagement for highbrow and lowbrow cultural activities, explicitly accounting for the selection in the sample of internet users. Our results suggest different determinants of these two categories, especially for the role played by age and education.
    Keywords: Cultural participation, digital engagement, interne cultural consumption, selection, Heckman selection probit model
    JEL: Z10
    Date: 2016–05
  3. By: Georgios Petropoulos; J. Scott Marcus
    Abstract: On 25 November 2015, the European Union enacted new rules for international mobile roaming (IMR) under Regulation 2015/2120, which seeks to implement a Roam Like at Home (RLAH) regime among the member states of the European Union. Questions remain, however, as to whether it is possible to implement RLAH without mandating below-cost pricing and thus introducing significant regulatory and economic distortions. It is difficult to see how RLAH could be implemented for other than trivial amounts of IMR traffic without significant cross-subsidisation of the IMR service in many different dimensions. Identifying ways to maintain the ubiquity of the IMR service without unduly distorting the economics of European mobile markets and networks would appear to pose serious challenges; the saving grace, however, might well be that IMR revenue now represents a small enough fraction of total mobile revenue (thanks to previous regulation) that the necessary cross-subsidies might be manageable. The European Commission, which is required to assess the situation and to provide legislative proposals by 15 June 2016, faces a daunting task.
    Date: 2016–06
  4. By: Pinna, Andrea; Ruttenberg, Wiebe
    Abstract: Over the last decade, information technology has contributed significantly to the evolution of financial markets, without, however, revolutionising the way in which financial institutions interact with one another. This may be about to change, as some market players are now predicting that new database technologies, such as blockchain and other distributed ledger technologies (DLTs), could be the source of an imminent revolution. This paper analyses the main features of DLTs that could influence their potential adoption by financial institutions and discusses how the use of these technologies could affect the European post-trade market for securities. The original protocol underlying DLTs has its roots in the anarchic world of virtual currencies, which operate outside the conventional financial system. The public debate on DLTs has also been very much focused on the revolutionary potential of the technology. This paper concludes that, irrespective of the technology used and the market players involved, certain processes that feature in the post-trade market for securities will still need to be performed by institutions. DLTs could, however, stimulate a reorganisation of financial markets, which could in turn: (i) reduce reconciliation costs, (ii) streamline the post-trade value chain, and (iii) allow more efficient use to be made of collateral and regulatory capital. It should, nevertheless, be remembered that research into DLTs and their uses is at an early stage. The scope for financial institutions to adopt DLTs and their potential impact on mainstream financial markets are still unclear. This paper discusses three potential models of how market players could adopt DLTs for performing core post-trade functions. The DLT could be adopted either: (i) in clusters, (ii) collectively, or (iii) peer to peer. The evaluation of the three adoption models assumes that they are all equally compatible with the regulatory framework. It shows that, assuming this to be the case, they would each have different advantages and costs. JEL Classification: G21, G23, L15, O33
    Keywords: Bitcoin, blockchain, clearing, distributed ledger technologies, financial market infrastructures, fintech, settlement
    Date: 2016–04
  5. By: David Duarte (IET/CICS.NOVA, Universidade Nova de Lisboa, Faculdade de Ciências e Tecnologia, Portugal); Tiago Mealha (IET/CICS.NOVA, Universidade Nova de Lisboa, Faculdade de Ciências e Tecnologia, Portugal)
    Abstract: Deep Web is the part of the Internet that is not indexed, not being possible to access through the traditional web search engines. It is necessary to use software that preserves the identity of the users, for instance, Tor, which is the most well-known. Concepts such as Deep Web, Darknet and Dark Web are mistakenly confused but this article will clarify it. Another theme approached is the negative connotation that is usually assigned to the Deep Web phenomenon. Because protects the users’ anonymity, a lot of people take advantage of it to commit illegal businesses, for example drugs and weapons transactions. We reach to the central question of our debate: on the one hand, the Tor software preserves the intimacy of the users’ communications and allows the consult of several articles and blogs that does not exist on the Surface Web; on the other hand the anonymity serves as a tool for the practice of illegal activities. There is a very thin line that separates public space and private space. Tor software reinforces the security of using the Internet. The application that people utilize it is up to them.
    Keywords: Deep Web, Internet, Tor, privacy, security
    JEL: G02 K49 O34
    Date: 2016–03
  6. By: Kiyutsevskaya, Anna (Gaidar Institute for Economic Policy, Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Narkevich, Sergei (Gaidar Institute for Economic Policy); Trunin, Pavel (Gaidar Institute for Economic Policy, Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: Study of transformation of the role and tasks of central banks at different stages of economic development allows us to determine the objective conditions underlying the evolution of monetary policy. For developed economies, the opportunity to conduct independent monetary policy becomes one of the major factors that determine the choice of the monetary regime. In addition, according to the international experience, the choice of goals and objectives of central banks both at present time and in the historical perspective is greatly affected by the degree of financial openness of the country and the development of its financial sector. While countries become more integrated in the world economy, their central banks shifted priorities, firstly, to achieve and maintain price stability, and, secondly, to increase the flexibility of exchange rate formation. The findings on the evolution of the goals and objectives of the central banks of developed and developing countries reveal the most suitable monetary policy regime for the Russian central bank.
    Keywords: central banks, monetary policy
    Date: 2016–03–21
  7. By: OECD
    Abstract: This report analyses the importance of the adoption and the effective use of information and communication technologies (ICTs) for enabling digital innovation for growth and inclusiveness, and discusses the role of public policies in stimulating such adoption and use. Given the emergence of a new digital divide caused by a possible breakdown of the “diffusion machine”, and given the strong interest of governments in furthering ICT adoption and use in particular by SMEs and disfavoured social groups, emphasis is put on policies stimulating ICT diffusion across society, i.e. ICT demand side policies.
    Date: 2016–06–16
  8. By: Brodeur, Abel (University of Ottawa); Nield, Kerry (Carleton University)
    Abstract: In New York City (NYC), it has been a common complaint that it is difficult to find a taxi in the rain. Using all Uber rides in NYC from April to September 2014 and January to June 2015, we show that the number of Uber rides is significantly correlated with whether it rained. The number of Uber rides per hour is about 25 percent higher when it is raining, suggesting that surge pricing encourages an increase in supply. During the same time period, the number of taxi rides per hour increases by only 4 percent in rainy hours. We then show that the number of taxi rides per hour decreased by approximately 8 percent after Uber entered the New York market in May 2011, confirming that Uber is depressing taxi demand. Last, we test whether the total (Uber plus taxi) number of rides in rainy hours increased since May 2011. Our estimates suggest that the total number of rides increased by approximately 9 percent since Uber entered the market and that it is relatively easier to get a ride in rainy than in non-rainy hours in post-Uber years.
    Keywords: rain, Uber, taxi, dynamic pricing
    JEL: D01 D03 L92 J22
    Date: 2016–06
  9. By: Giacomo De Giorgi; Anders Frederiksen; Luigi Pistaferri
    Abstract: In this paper we study consumption network effects. Does the consumption of our peers affect our own consumption? How large is such effect? What are the economic mechanisms behind it? We use long panel data on the entire Danish population to construct a measure of consumption based on administrative tax records on income and assets. We combine tax record data with matched employer-employee data so that we can construct peer groups based on workplace, which gives us a much tighter, precise, and credible definition of networks than used in previous literature. We use the available data to construct peer groups that do not perfectly overlap, and as such provide valid instruments derived from the network structure of one's peers group. The longitudinal nature of our data also allow us to estimate fixed effects models, which help us tackle reflection, self-selection, and common-shocks issues all at once. We estimate non-negligible and statistically significant endogenous and exogenous peer effects. Estimated effects are quite relevant for policies as they generate non-negligible multiplier effect. We also investigate what mechanisms generate such effects, distinguishing between "keeping up with the Joneses", a status model, and a more traditional risk sharing view.
    JEL: D12 D91
    Date: 2016–06
  10. By: OECD
    Abstract: This report presents new evidence on how Information and Communication Technologies (ICTs) are changing the demand for skills at work. While the use of ICT at work increased in a large majority of countries between 2011 and 2014, a significant number of workers do not seem to have sufficient skills to use these technologies effectively. The diffusion of ICTs is also changing the way work is carried out, increasing the raising the demand for “soft skills” such as communication, self-direction and problem solving. While these findings offer some new and interesting insights, the report discusses various avenues for further analysis.
    Date: 2016–06–21
  11. By: Riina Vuorikari (European Commission – JRC - IPTS); Yves Punie (European Commission – JRC - IPTS); Stephanie Carretero Gomez (European Commission – JRC - IPTS); Godelieve Van Den Brande (European Commission, DG Employment)
    Abstract: The European Digital Competence Framework for Citizens, also known as DigComp, offers a tool to improve citizens’ digital competence. DigComp was first published in 2013 and has become a reference for many digital competence initiatives at both European and Member State levels. This document introduces DigComp 2.0. It constitutes phase 1 of the update of the framework which focuses on the conceptual reference model, new vocabulary and streamlined descriptors. The current document also gives examples of how DigComp is used at the European, national and regional levels.
    Keywords: Digitally-competent educational organisations, innovation in education, European Framework for Digitally-Competent Eeducational Organisations, educational policy, digital learning technologies, self-assessment questionnaire, ICT for learning and skills
    JEL: I20 I21 I23 I28 I29
    Date: 2016–06
  12. By: OECD
    Abstract: This report presents a framework for analysing Internet openness, the factors that influence it, and its effects. It also presents initial qualitative and quantitative evidence on the effects of Internet openness. Among the key findings are that Internet openness consists of many technical, economic and social elements and that overall openness is vital for reaping the Internet’s potential benefits. Those benefits include positive effects on trade, innovation and entrepreneurship, macroeconomic performance, and social wellbeing. However, openness also presents challenges, as bad actors sometimes take advantage of it when conducting malicious activities. While the global, decentralised and interconnected nature of the Internet prevents individual countries from determining openness unilaterally, governments nevertheless take policy actions that can affect openness. Policymakers should bear in mind that even though there are legitimate reasons for setting certain boundaries, drifting away from a general preference for Internet openness is economically and socially costly.
    Date: 2016–06–17
  13. By: McAndrews, James J. (Federal Reserve Bank of New York); Kroeger, Alexander (Federal Reserve Bank of New York)
    Abstract: The policy measures taken since the financial crisis have greatly expanded the size of the Federal Reserve’s balance sheet and have thus raised the level of aggregate bank reserves as well. Over the same period there has been a significant shift in the timing of payments made over the Federal Reserve’s Fedwire Funds Service toward earlier settlement. This paper documents this timing change and presents regression results suggesting that the increase in overall reserve balances explains the vast majority of this development. The paper also discusses the benefits of high aggregate reserve balances for the robustness of the payment system and the potential implications for policy going forward.
    Keywords: Fedwire; settlement liquidity; reserves; monetary policy implementation
    JEL: G20 G21 G28
    Date: 2016–06–01
  14. By: Askitas, Nikos (IZA)
    Abstract: The more conservative among us believe that "Big Data is a fad that will soon fade out" and they may in fact be partially right. By contrast, others – especially those who dispassionately note that digitization is only now beginning to deliver its payload – may beg to differ. We argue that all things considered, Big Data will likely cease to exist, although this will happen less because it is a fad and more because all data will eventually be Big Data. In this essay, I pose and discuss the question of "how much data do we really need" since everything in life and hence the returns from data increments ought to obey some kind of law of diminishing returns: the more the better, but at some point the gains are not worth the effort or become negative. Accordingly, I discuss small and large, specific and general examples to shed light on this question. I do not exhaustively explore the answers, rather aiming more towards provoking thought among the reader. The main conclusions, nonetheless, are that depending on the use case both a deficit and an abundance of data may be counterproductive, that individuals, data experts, firms or society have different optimization problems whereby nothing will free us from having to reach decisions concerning how much data is enough data and that the greatest challenges that data-intensive societies will face are positive reinforcement, feedback mechanisms and data endogeneity.
    Keywords: Big Data, endogeneity, social science, causality, prediction
    JEL: C55
    Date: 2016–06
  15. By: Tunç, Süleyman
    Abstract: Sensitivity for the protection of consumers increase more and more every day and the subject becomes an agenda in the public opinion. Studies carried out under different names and legal arrangements in the pre-industrial societies, are accelerated by industrialization. The provisions regarding the Consumer Protection entered into the Turkish Legislation by the Constitution of 1982, have taken their last shape in the Act No. 6502 enacted in the year of 2013 and the relevant Regulations. The internet, which is an indispensable element in the globalized world, has become an important platform where the consumers voiced their complaints. The aim of this study is to analyze the complaints most shared over the internet and to examine the regulations made by the Act No. 6502 related to these complaints.
    Keywords: Consumer, Consumer Protection, Complaints, Law No. 6502
    JEL: K19
    Date: 2015
  16. By: Tamirat, Tseganesh Wubale; Farquharson, Robert
    Keywords: Agricultural and Food Policy,
    Date: 2016–02
  17. By: Babutsidze, Zakaria
    Abstract: We examine the data from illegal downloads of economics content from Sci-Hub over five-month period. The most pirated economics articles and the most pirated economics journals are identified. We analyze the contribution of this particular piracy engine toward open science (economics). We conclude that economics is benefitting from Sci-Hub: (a) as downloads are not pervasive, publishers are not losing much revenues; (b) as downloads are coming mostly from under-developed countries, the exposure to generated knowledge in the discipline has been extended.
    Keywords: Sci-Hub, Piracy, Economics
    JEL: A1
    Date: 2016–06–02

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