nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2017‒04‒09
seventeen papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Mobile Money in Sub-Saharan Africa and its Implications By Jang, Jong-Moon; Park , Hyunju
  2. The Costs of Point-of-Sale Payments in Canada By Anneke Kosse; Heng Chen; Marie-Hélène Felt; Valéry Dongmo Jiongo; Kerry Nield; Angelika Welte
  3. Learning to walk before you run : Financial Behavior and mobile banking in Madagascar By Florence Arestoff; Baptiste Venet
  4. A framework for researching Global Kids Online: understanding children’s well-being and rights in the digital age By Sonia Livingstone
  5. Framework for implementing alternative credit schemes and digital social currencies By Stefano Lucarelli; Marco Sachy; Lucia Bonacci; Eleonora Gentilucci; Alfonso Giuliani; Lucio Gobbi
  6. Survey sampling and administration By Alexandre Barbosa; Marcelo Pitta; Fabio Senne; Maria Eugênia Sózio
  7. Modern universities in a digital environment By Lukovics, Miklós; Zuti, Bence
  8. Global Kids Online South Africa: barriers, opportunities and risks. A glimpse into South African children’s internet use and online activities By Joanne Phyfer; Patrick Burton; Lezanne Leoschut
  9. Les monnaies virtuelles décentralisées sont-elles des outils d’avenir ? By Ariane Tichit; Pascal Lafourcade; Vincent Mazenod
  10. Researching the benefits and opportunities for children online By Amanda Third
  11. Global Kids Online: children’s rights in the digital age - inception report By Sonia Livingstone; Mariya Stoilova
  12. The UK's Fintech Industry Support Policies and its Implications By Yang, Hyoeun
  13. Remittances from Korea to Southeast Asia: Trends and Implications By Oh, Yoon Ah
  14. Social Media and the Diffusion of an Information Technology Product By Yinxing Li; Nobuhiko Terui
  15. Satoshi Risk Tables By Cyril Grunspan; Ricardo Pérez-Marco
  16. The Power of Big Data: Historical Time Series on German Education. By Claude Diebolt; Gabriele Franzmann; Ralph Hippe; Jürgen Sensch
  17. Can agricultural credit scoring for microfinance institutions be implemented and improved by weather data? By Römer, Ulf; Mußhoff, Oliver

  1. By: Jang, Jong-Moon (Korea Institute for International Economic Policy); Park , Hyunju (Korea Institute for International Economic Policy)
    Abstract: Africa is currently rising as a major area where mobile money is spreading. According to the 2015 global index report by the World Bank, the 13 countries whose penetration rate for mobile money accounts was over 10% were all located in sub-Saharan Africa. The example of Africa's mobile money diffusion is assessed as meaningful creation of new services from local African demand. The mobile money of Africa was known as first serviced in South Africa in the year 2000, and its full-fledged expansion is recognized as subsequent to the great success of Kenyan mobile communication operator due to M-Pesa in 2007. Mobile money is currently supplied centering in the East Africa region including Kenya, Tanzania, Somalia, and Sudan, and also displays a high penetration rate in Cote d'Ivoire and South Africa. The background to the fast spread of mobile money in Africa includes low financial access, quickly diffusing mobile communications infrastructure, and the quick response of corporations to local demand. The proportion of the adult population who can use orthodox financial institutions excluding mobile finance in sub-Saharan Africa is just 24%, but the diffusion of mobile communications is 70%. Multinational corporations like Vodafone paid attention to the informal financial dealings between individuals in Africa and released a new service that could replace them. The mobile money system, M-Pesa, which began in Kenya, is a typical example of success and pioneering, which has had a ripple effect on not only countries nearby but also other sub-Saharan countries, although there are examples of mobile money diffusion failure like Nigeria. In the case of Nigeria, a cash-oriented economic structure and the excessive regulations of the government are pointed out as the biggest causes for the failure of diffusion. The diffusion of mobile money in Africa display differing aspects according to region and country. Mobile money was a success in the East Africa region including Kenya because of the complex functioning of several factors including the efficient institutions of each government, the peculiarity of the financial environment, and consumer demand. Local market analysis must precede to revitalize FinTech domestically and enter overseas markets. As you may see from the case of Africa, the diffusion of mobile money, unlike a top-down transmission of technology, tends to begin with local demand, so a close analysis on the demand and institutions of the local market must be preceded.
    Keywords: FinTech; Mobile Money; M-Pesa; Sub-Saharan Africa; Kenya
    Date: 2016–01–29
  2. By: Anneke Kosse; Heng Chen; Marie-Hélène Felt; Valéry Dongmo Jiongo; Kerry Nield; Angelika Welte
    Abstract: This study provides insight into the costs of cash, debit card and credit card payments made at the point of sale in Canada in 2014. For each payment method, it examines the total resource costs, which capture the overall use of resources by society as a whole. Using extensive survey data from retailers, financial institutions and cash transportation companies as well as internal and external data sources, the results show that the resource costs of payments in Canada are non-negligible (0.78 per cent of GDP). Credit cards are most costly in terms of resource costs per transaction, while cash carries the highest resource costs per dollar transacted. Debit cards are the least costly, both in terms of costs per transaction and costs per dollar in sales. The study also demonstrates how the costs vary with transaction sizes. Considering the variable resource costs only, cash is found to be cheapest for transactions up to $6, while debit cards are the least costly for transactions larger than $6. The study also looks into the total private costs, which are the costs incurred by each stakeholder, thereby providing insight into how costs are affecting the use and acceptance of payment methods.
    Keywords: Bank notes, Financial Institutions, Payment clearing and settlement systemsing
    JEL: D12 D23 D24 E41 E42 G21 L2
    Date: 2017
  3. By: Florence Arestoff (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Baptiste Venet (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)
    Abstract: In Madagascar, Orange introduced its mobile banking services in September 2010. Mobile-banking (m-banking) is a system that allows users to conduct a number of financial transactions through a mobile phone. The existing body of literature suggests that the use of m-banking services may have a positive impact on individual savings, affect money transfer behavior and/or encourage financial inclusion. In 2012, we conducted a survey of 598 randomly selected Orange clients in Antananarivo. We use the matching methodology to assess the impacts of m-banking on clients' financial behavior. The results show that the use of m-banking services increases the number of national remittances sent and received. It is in line with the conclusions of the existing literature devoted to M-Pesa in Kenya. Yet we find that using of m-banking services has no significant impact on the sums saved by users or the sums of remittances sent and received, which appears to contradict the users' perceptions. This result may, however, be explained by a learning-by-doing process: users need to first learn to trust the e-money system before making any significant changes to their financial behavior.
    Abstract: En septembre 2010, l’opérateur Orange a introduit les services de banque mobile appelés Orange Money à Madagascar. Ils permettent d’effectuer des opérations de dépôt et de retrait d’argent, de transferts nationaux et de paiements de marchandises. Selon la littérature existante, l’utilisation de ces services engendrerait une augmentation de l’épargne individuelle, pourrait modifier les comportements de transferts et/ou favoriser la bancarisation des plus pauvres. Afin d’analyser les conséquences du m-banking sur les comportements financiers des populations concernées à Madagascar, nous procédons à une étude d’impact reposant sur des données originales. En mars 2012, nous avons réalisé une enquête auprès de 196 clients Orange utilisateurs réguliers des services Orange money et 402 clients Orange non utilisateurs de ces services. Afin de comparer rigoureusement les comportements financiers de ces deux groupes, nous apparions les individus sur la base de leurs scores de propension respectifs. Nos résultats montrent alors que l’utilisation des services Orange Money conduit à accroître significativement la fréquence des transferts envoyés et reçus. Ce résultat est corroboré par l’approche subjective puisque 55% des utilisateurs Orange Money déclarent que ce service les a encouragés à effectuer des transferts plus fréquemment. En revanche, nous montrons qu’Orange Money n’a d’impact significatif ni sur les montants épargnés ni sur les montants transférés (à l’envoi comme à la réception), ce qui tend à contredire le sentiment des utilisateurs. La temporalité des effets des services de m-banking apparaît alors. Les modifications de montants transférés et épargnés s’inscrivent probablement davantage dans la durée alors que la fréquence des transferts serait plus rapidement affectée eu égard au moindre coût et à la facilité d’utilisation d’Orange Money.
    Keywords: Low Income countries,Mobile banking,Financial behavior,Matching methodology,Banque mobile,Matching,Comportements financiers,Pays en développement
    Date: 2017–03–16
  4. By: Sonia Livingstone
    Abstract: This guide introduces the Global Kids Online research framework. It is recommended that this guide is read carefully to understand the aims, structure and contribution of the Global Kids Online project, toolkit, and emerging findings. The guide begins by identifying the global research challenge of researching children’s internet and mobile use as more children go online around the world. A review of available statistics and research literature shows that the evidence based to date is uneven, with many gaps that urgently need to be filled. This is vital if stakeholders are to base their policy and practice on robust evidence regarding the online risks and opportunities as well as outcomes for children’s wellbeing and rights. The guide highlights the overarching research questions and defines the main terms used throughout Global Kids Online. It then provides a step-by-step rationale for the Global Kids Online model, showing how individual, social and country levels of explanation all contribute to analysing and measuring the influences on children’s rights in the digital age. This effort poses a number of challenges for researchers, and these are identified and best practice solutions suggested.
    JEL: L91 L96
    Date: 2016–11
  5. By: Stefano Lucarelli (UniBG - Università degli studi di Bergamo); Marco Sachy (University of Leicester); Lucia Bonacci (Università della Calabria (ITALIA)); Eleonora Gentilucci (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Alfonso Giuliani (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Lucio Gobbi (Università di Trento)
    Abstract: This deliverable documents the state of the art of legal frameworks of implementation both in general, but also particularly for D-CENT Digital Social Currency experiments with pilot communities in Spain, Iceland, Finland and the use case in Italy. The richness in contexts of the various pilots is remarkable and is being taken into account as Freecoin software development and systems are rolled out in the last phases of the project. At a glance, only the Spanish and Icelandic regulatory contexts are detailed enough to allow for experimentation within clear boundaries. . In Iceland there is only a single article that remands to the prohibition to issue bonds to the bearer outside the national banking system. Conversely, in Finland, rules are absent, although digital alternative and complementary currencies are not considered as illegal, they just exist in the informal economy. Finally, Italy is on its way to processing regulation in both the legislative and executive. Hence, Freecoin implementation will have to take into account these differences while promoting lawful operations in each pilot specific context in order to empower communities with a long-term viable framework of implementation.
    Keywords: Social and Solidarity Economy,Money, Complementary currencies, French Local Complementary Currencies
    Date: 2015–09–30
  6. By: Alexandre Barbosa; Marcelo Pitta; Fabio Senne; Maria Eugênia Sózio
    Abstract: Measuring the impact of digital technologies and devices – particularly the use of the internet – on children’s lives through reliable statistical data is essential to the design of effective public policies to promote children’s rights in the digital age and to protect them online. Policy-makers need high-quality data to underpin evidence-based policy decisions. Although it is clear that reliable statistics are needed for effective policies, and that the impact of evidencebased policies can only be measured by good statistics, most countries lack systematic and comparable statistics on the online risks and opportunities experienced by children. This Methodological Guide provides a framework for the production of high-quality, reliable statistics to measure access to and use of the internet and digital devices by children. Although this framework is aligned with the good practice of official statistics agencies, it does not replace theoretical and practical guidance or informed expertise on survey methodologies. The proposed framework provides practical guidance for activities related to administering the Global Kids Online (GKO) survey in the field, from planning to implementation.
    JEL: L91 L96
    Date: 2016–11
  7. By: Lukovics, Miklós; Zuti, Bence
    Abstract: Nowadays the digitalization of all aspects of our lives is becoming more and more general. This pattern is also true in case of modern institutions of higher education. In case of the operation of universities, we can identify a shift towards a growingly increasing approach, which is proactive strategic thinking done by university management. Many successful examples throughout the globe prove that universities may positively affect the level of economic development in given regions. This can happen with the collective presence of three key activities carried out by these institutions. Excellent education, successful research and embedment in the local economy are all necessary activities. It is recognized that without a proper knowledge management system, universities are less competitive. They need to possess outstanding IT-infrastructures, large databases and host professional forums that can enhance knowledge transfer. Thus, knowledge management and a vision for digitalization in the everyday lives of universities should be considered as an integral and inevitable part of university strategies. The study has two goals: It attempts to identify, how digitalization can contribute to the excellence of the first mission of universities and also examines the role of modern universities in activities that can enhance knowledge-transfer.
    Keywords: knowledge management,third mission,modern universities,digitalization
    JEL: I20 I25 O30
    Date: 2016
  8. By: Joanne Phyfer; Patrick Burton; Lezanne Leoschut
    Abstract: How do children use the internet? How do they access it? Does it present risks or opportunities for them, or both? What do parents think of their children’s online activities? Do they support it as an opportunity for learning? Or do they see it as harmful? We asked 913 children between nine and seventeen years, from three provinces in South Africa, and from different levels of household incomes, these questions and more. To compare their answers and find out more about the parents’ internet use, we asked 532 parents of the same children the same questions. Finally, we dug deeper into the children and parents’ answers with focus group discussions with 49 children and 20 of their parents. The report contains some of the things we found – some surprising, some not. It also makes some recommendations for opportunities for parents, teachers and schools, policy makers and reserachers, and mobile companies.
    JEL: L91 L96
    Date: 2016–09
  9. By: Ariane Tichit (CERDI - Centre d'études et de recherches sur le developpement international - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Pascal Lafourcade (LIMOS - LIMOS - Laboratoire d'Informatique, de Modélisation et d'optimisation des Systèmes - UBP - Université Blaise Pascal - Clermont-Ferrand 2 - UdA - Université d'Auvergne - Clermont-Ferrand I - Sigma CLERMONT - Sigma CLERMONT - CNRS - Centre National de la Recherche Scientifique - LMGE - Microorganismes : génome et environnement - UBP - Université Blaise Pascal - Clermont-Ferrand 2 - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Vincent Mazenod (LIMOS - LIMOS - Laboratoire d'Informatique, de Modélisation et d'optimisation des Systèmes - UBP - Université Blaise Pascal - Clermont-Ferrand 2 - UdA - Université d'Auvergne - Clermont-Ferrand I - Sigma CLERMONT - Sigma CLERMONT - CNRS - Centre National de la Recherche Scientifique - LMGE - Microorganismes : génome et environnement - UBP - Université Blaise Pascal - Clermont-Ferrand 2 - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this article, we show that decentralized virtual currencies can be powerful tools for societal transformation. Indeed, the study of the joint and disjoint elements between the first Bitcoin currencies, SELs and local currencies, reveals that these projects are not so far. Then, we present the current evolution of crypto-currencies towards new energy aware, community-based, useful and fundamentally innovative protocols, emphazing their strong potential. Finally, some recent crypto-currencies are close to the values of the Social and Solidarity Economy, and even though they have some technical and theoretical problems, they have the merit of offering new perspectives. Finally, we propose an idea of decentralized money geolocalized melty, which would allow us to meet a certain number of limits that are experienced by traditional local currencies.
    Keywords: Decentralized virtual currencies,Crypto-currencies,LETs,Social currencies,Monetary innovations.
    Date: 2017–02–14
  10. By: Amanda Third
    Abstract: Research in the last five years has documented a range of proven benefits for children of participating online, including positive impacts on formal and informal learning; health and well-being; literacy; civic and/or political participation; play and recreation; identity; belonging; peer, family and intergenerational relationships; individual and community resilience; and consumer practices (Swist et al., 2015). Even so, relatively little is understood about the various benefits and opportunities children can access online. If governments, communities, parents and children themselves are to activate the potential for digital media to support children’s rights, it is vital that research documents more systematically the relationship between the digital and children’s protection, provision and participation rights. This Method Guide situates current research on online benefits and opportunities in relation to key trends in global research on digital practice, and identifies the key issues that shape children’s capacity to maximise the positive impacts of their online engagement. It then documents some of the challenges to research, and proposes a set of principles and critical questions to guide researchers in designing appropriate studies. This Guide is not exhaustive. Rather, it aims to orient researchers in developing internationally comparable and culturally appropriate frameworks for understanding the scope and impact of the opportunities for children online.
    JEL: L91 L96
    Date: 2016–11
  11. By: Sonia Livingstone; Mariya Stoilova
    Abstract: This inception report contains a short description of the background, purpose and scope of the Global Kids Online project, as well as information about the planned activities, outputs, participating members and delivery dates.
    JEL: L91 L96
    Date: 2015–09–07
  12. By: Yang, Hyoeun (Korea Institute for International Economic Policy)
    Abstract: The rapid growth of the UK fintech industry is closely linked to the high quality of its fintech ecosystem. The global consulting agency Ernst & Young analyzed the quality of fintech ecosystems based on four categories: talent, capital, policy, and demand (Ernst & Young 2016). According to this analysis of the quality of fintech ecosystems, the UK has the best ecosystem among global fintech hubs. The most interesting feature of the UK government's fintech support policy is that the regulator who supervises the financial market provides direct and customized support to businesses which are under its supervision so that those businesses can easily understand the regulatory system and comply with less time and cost. Overall, based on this supportive attitude of the regulator, the interactive exchange of opinion and information among the government, companies, investors, and developers provided a good soil for establishing a strong and effective fintech ecosystem in the UK. Considering that the core purpose of financial regulation should include stabilizing the financial market and also increasing the benefit to consumers by promoting innovation and competition in the market, the fintech support policy of the UK government provides a fine example for financial regulators as the continuing economic downturn is causing a desperate need for innovation in the market.
    Keywords: Fintech; UK Fintech Policy; Financial Regulation; FCA; Innovation; Fintech Ecosystem
    Date: 2017–02–17
  13. By: Oh, Yoon Ah (Korea Institute for International Economic Policy)
    Abstract: Remittances, money transfers sent by international migrants to their kin at home, are increasingly recognized as a new source of development finance by the international community. Remittances to developing countries are large in volume, increasing steadily, and less volatile than other types of external financial inflows. Transferred directly to the households in need, remittances are widely credited for their contribution to poverty reduction in developing countries. Remittances to Southeast Asia show patterns similar to those of other developing regions. Within the region, the Philippines accounts for the most of the remittances flowing into the region although its share has been on a gradual decline. Populous countries like Indonesia and Vietnam, are receiving increasing volumes of remittances, as their migration outflows are on a steady rise. Remittances per capita exceed Official Development Assistance per capita in most Southeast Asian countries except Cambodia and this suggests that remittances may have potential that could complement foreign aid. Korea has emerged as an important source of remittances, mostly for Asian countries, which means that Korea's contribution to global development finance may be larger than previously thought. Host countries, including Korea, should continue to make an effort to reduce the costs of transferring remittances and to enhance the efficiency of the overall payment flows, in addition to providing financial information services and implementing better data collection on remittance behavior of migrants.
    Keywords: Remittances; Development Finance; Korea; Southeast Asia
    Date: 2016–04–29
  14. By: Yinxing Li; Nobuhiko Terui
    Abstract: The expansion of the Internet has led to a huge amount of information posted by consumers online through social media platforms such as forums, blogs, and product reviews. These text data are useful especially when numeric sales data are not enough, as is typically the case with new product diffusion. This study proposes a diffusion model that accommodates pre-launch social media information and combines it with post-launch sales information in the Bass model to improve the accuracy of sales forecasts. The model is characterized as the extended Bass model, with time varying parameters whose evolutions are affected by the consumer's communications in social media. Specifically, we first extract information from social media to build variables, such as the number of positive and negative comments, and also latent topics. These data are fed as key parameters in the diffusion model's evolution process for the purpose of plugging the gap between the time-invariant key parameter model and that of observed sales. We examine several models using text analysis techniques, e.g., sentiment analysis for counting numbers of positive and negative comments and topic analysis by topic model to extract relevant topics. These results are then compared with the conventional Bass model using only post-launch sales data. An empirical study of the first-generation iPhone during 2006 and 2007 shows that the model using additional variables extracted from sentiment and topic analysis on BBS performs best based on several criteria, including DIC (Deviance Information Criteria), marginal likelihood, and forecasting errors of holdout samples. We discuss the role of social media information in the diffusion process for this study.
    Date: 2016–08
  15. By: Cyril Grunspan (ESILV Léonard de Vinci); Ricardo Pérez-Marco (CNRS - Centre National de la Recherche Scientifique, IMJ-PRG - Institut de Mathématiques de Jussieu - Paris Rive Gauche - UPMC - Université Pierre et Marie Curie - Paris 6 - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We present Bitcoin Security Tables computing the probability of success p(z, q, t) of a double spend attack by an attacker controlling a share q of the hashrate after z confirmations in time t.
    Keywords: Regularized Incomplete Beta Function, double spend, blockchain,Bitcoin, mining, proof-of-work
    Date: 2017–02–12
  16. By: Claude Diebolt; Gabriele Franzmann; Ralph Hippe; Jürgen Sensch
    Abstract: Numerous primary investigators collected and processed long termed time series on German educational statistics in the context of their studies. As a result there are a multitude of quantitative empirical studies. On the one hand there is the project group on German Educational Statistics. Its projects were targeted at describing and analysing the long-term structural changes of the German educational system on a broad empirical and statistical basis. On the other hand there are comprehensive data compilations of individual research projects, focusing on a wide variety of special educational research topics. The online database ‘histat’ provides central digital access to these datasets on German educational history. Currently, it offers more than 120,000 long-term time series on the German educational system for a period of 200 years. The striking size of the database shows its key importance for researchers in the field of education. Thus, this paper aims to provide useful insights into the background of the database, the special characteristics of the data compilations and their analytical potential. Additionally, examples are given of how the data have already been used by researchers.
    Keywords: Big Data, Cliometrics, Demography, Education, Germany.
    JEL: C81 C82 C83 I2 J11 N33 N34
    Date: 2017
  17. By: Römer, Ulf; Mußhoff, Oliver
    Abstract: [Purpose] In recent years, the application of credit scoring in urban microfinance institutions became popular, while rural microfinance institutions, which mainly lend to agricultural clients, are hesitating to adopt credit scoring. The present study aims to explore whether microfinance credit scoring models are suitable for agricultural clients, and if such models can be improved for agricultural clients by accounting for precipitation. [...]
    Keywords: Microfinance,Credit scoring,Agricultural credit,Precipitation
    Date: 2017

This nep-pay issue is ©2017 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.