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on Payment Systems and Financial Technology |
| By: | Greene, Claire (Federal Reserve Bank of Atlanta); Schuh, Scott (West Virginia University); Stavins, Joanna (Federal Reserve Bank of Boston) |
| Abstract: | This paper describes the results, content, and methodology of the 2012 Diary of Consumer Payment Choice (DCPC), the first edition of a survey that measures payment behavior through the daily recording of U.S. consumers’ spending by type of payment instrument. A diary makes it possible to collect detailed information on individual payments, including dollar amount, device (if any) used to make the payment (computer, mobile phone, etc.), and payee type (business, person, government). This edition of the DCPC included about 2,500 participants and was conducted in October 2012. During that month, U.S. consumers on average made about two payments per day. For the month, they paid mostly with cash (40 percent of payments) and debit cards (24 percent), followed by credit cards (17 percent). For recurring bill payments, consumers most commonly used electronic payments and checks. Like other payment-value data, the DCPC data show correlations between the choice of payment instrument and the dollar value of expenditure. For example, consumers tend to use cash more often than other instruments for small-value payments. The results of subsequent editions of the DCPC are reported in separate papers. |
| Keywords: | cash; checks; checking accounts; debit cards; credit cards; prepaid cards; electronic payments; payment preferences; Diary of Consumer Payment Choice |
| JEL: | D12 D14 E42 |
| Date: | 2018–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbdr:18-1&r=pay |
| By: | Stjepan Begu\v{s}i\'c; Zvonko Kostanj\v{c}ar; H. Eugene Stanley; Boris Podobnik |
| Abstract: | Detection of power-law behavior and studies of scaling exponents uncover the characteristics of complexity in many real world phenomena. The complexity of financial markets has always presented challenging issues and provided interesting findings, such as the inverse cubic law in the tails of stock price fluctuation distributions. Motivated by the rise of novel digital assets based on blockchain technology, we study the distributions of cryptocurrency price fluctuations. We consider Bitcoin returns over various time intervals and from multiple digital exchanges, in order to investigate the existence of universal scaling behavior in the tails, and ascertain whether the scaling exponent supports the presence of a finite second moment. We provide empirical evidence on slowly decaying tails in the distributions of returns over multiple time intervals and different exchanges, corresponding to a power-law. We estimate the scaling exponent and find an asymptotic power-law behavior with 2 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1803.08405&r=pay |
| By: | Omarini, Anna |
| Abstract: | One of the main changes in the industry is becoming digitalization which is witnessing a profound transformation to the banking system. Digitalization offers new opportunities for banks to place the customer at the center of the development process. New technologies seem to be and stay in the market to disrupt the retail financial service value chain, as well as introducing new players into the competitive arena. Incumbents and new comers have innovative levers to adopt. The forces shaping these changes have led the industry to reconsider the role of banking and finance, more as an “enabler” than a provider of products and services. The article aims at defining digital transformation in the banking industry, outlining what banks and FinTech companies are both developing in the market, and also pointing out that it is not going to be the technology itself that will be the disruptor of the banking industry, but rather how firm deploys the technology that will cause the disruptio |
| Keywords: | Digitalization; Digital Transformation; FinTech; Retail Banking; Business Model; Incumbents; Innovation. |
| JEL: | G20 G21 G23 G29 O30 |
| Date: | 2017–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85228&r=pay |
| By: | Michael D. Bordo; Andrew T. Levin |
| Abstract: | We consider how a central bank digital currency (CBDC) can transform all aspects of the monetary system and facilitate the systematic and transparent conduct of monetary policy. Drawing on a very long strand of literature in monetary economics, we find a compelling rationale for establishing a CBDC that serves as a stable unit of account, a practically costless medium of exchange, and a secure store of value. In particular, the CBDC should be universally accessible and interest-bearing, and the central bank should adjust its interest rate to foster true price stability. |
| Keywords: | monetary policy frameworks, payment technologies, simple rules. |
| JEL: | B12 B13 B22 E42 E52 E58 E63 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:hoo:wpaper:17104&r=pay |
| By: | Leopoldo Catania; Stefano Grassi; Francesco Ravazzolo |
| Abstract: | This paper studies the predictability of cryptocurrencies time series. We compare several alternative univariate and multivariate models in point and density forecasting of four of the most capitalized series: Bitcoin, Litecoin, Ripple and Ethereum. We apply a set of crypto–predictors and rely on Dynamic Model Averaging to combine a large set of univariate Dynamic Linear Models and several multivariate Vector Autoregressive models with different forms of time variation. We find statistical significant improvements in point forecasting when using combinations of univariate models and in density forecasting when relying on selection of multivariate models. |
| Keywords: | Cryptocurrency, Bitcoin, Forecasting, Density Forecasting, VAR, Dynamic Model Averaging |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:bny:wpaper:0063&r=pay |
| By: | Adena, Maja (WZB); Huck, Steffen (WZB) |
| Abstract: | We provide the first field evidence for the role of pure self-image, independent of social image, in charitable giving. In an online fundraising campaign for a social youth project run on an opera ticket booking platform we document how individuals engage in self-deception to preserve their self-image. In addition, we provide evidence on stark adverse long-run effects of the fundraising campaign for ticket sales. \"Avoiding the ask,\" opera customers who faced more insistent online fundraising buy fewer tickets in the following season. Our results suggest that fundraising management should not decide in isolation about their campaigns, even if very successful. Rather broader operational concerns have to be considered. |
| Keywords: | online fundraising; quasi-experiment; self-image; |
| JEL: | D64 D03 D12 C93 L31 |
| Date: | 2018–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:86&r=pay |
| By: | Gros, Daniel |
| Abstract: | Financial innovation seems to have had little impact on the oldest medium of transaction, namely cash. The ratio of currency in circulation to GDP has increased in most countries, independently of the continuing spread of cashless transactions. Currency is part of the monetary base. Its increase thus leads to an automatic increase in central banks’ balance sheets. This becomes relevant when the size of a central bank’s balance sheet becomes a policy instrument. Taking account of the increase in cash holdings can lead to a different view of the monetary policy stance over longer periods of time. Holding the size of the overall balance sheet constant is equivalent to a gradual exit when currency holdings continue to increase. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:12661&r=pay |
| By: | Volckart, Oliver |
| Abstract: | The paper discusses which options medieval political authorities had to satisfy the demand for complex currencies. It distinguishes several models, each of which caused problems: A first one, where the basic unit was supplemented by a range of other denominations whose weight and purity where exactly proportional. While this did not take the proportionally larger labour costs involved in the production of small change into account, the second model did: here, small change had an over proportionally high content of base metal. In consequence, the stable numerical ratios between units of the same currency began to shift. The third option involved using gold for high purchasing power coins; a strategy that made currencies vulnerable to changes in the relative market prices of gold and silver. Again, the outcome was a that the numerical ratios between units of the same currency became instable. The paper discusses how political authorities chose between these options, how they supplied their mints with the necessary bullion and how minting was organised. |
| Keywords: | Medieval monetary policies; mining; minting |
| JEL: | E42 E52 N13 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:87152&r=pay |
| By: | OECD |
| Abstract: | The “smart home” looks set to be the arena in which many people will utilise consumer-facing Internet of Things (IoT) technologies for the first time. A new generation of familiar household devices and appliances (e.g. washing machines) are becoming “smart” through the addition of sensors, software and Internet connections. They are entering the home alongside innovative IoT era devices (e.g. smart speakers) – often integrating with them to form smart residential systems (e.g. relating to energy, entertainment and home security). This report outlines the key consumer benefits and risks associated with Internet of Things (IoT) devices in the “smart home”. The benefits include convenience, customisation and control. However, there are potential risks for smart home residents such as data privacy and cybersecurity threats, limitations on interoperability, the need for lifetime product support, complex supply chains and liability regimes, and product safety. |
| Date: | 2018–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:268-en&r=pay |
| By: | Hugh Whittaker (FFJ - Fondation France-Japon de l'EHESS - EHESS - École des hautes études en sciences sociales) |
| Abstract: | This paper reviews some of the recent writing on financialization and its effects in developing countries. Acknowledging the positive role of finance in development, it argues that beyond a certain point of ‘financial deepening’ there are negative consequences. Financialization affects the economy, and also the state. In developing countries financialization does not necessarily follow a long period of industrialization, but may happen simultaneously with it, and indeed may be linked to ‘premature de-industrialization.’ From this perspective, namely of timing, it may also be meaningful to talk of ‘premature financialization.’ |
| Keywords: | financialization, development, premature deindustrialization |
| Date: | 2017–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01680406&r=pay |
| By: | Margaret Cotton; Gregory Dark |
| Abstract: | This technical note is the first of three addressing information technology (IT) themes and issues relevant to tax administrations. This note focuses on the use of technology in tax administrations and how to develop an information technology strategic plan (ITSP). It is intended for tax administrations that are largely manual or have outdated legacy IT systems. The second note addresses how to select an IT system for core tax administrations functions. And the third note covers implementation of a commercial-off-the-shelf (COTS) system. These technical notes are primarily for use by tax administrations that have no technology to manage their core tax processes, or their technology is limited and outdated. These notes focus on core tax functions and do not address other business systems (e.g., payroll, finance, document, and asset management systems). |
| Keywords: | Tax administration;Information technology;strategic plan, organization strategy, General, Other, General, IT Management |
| Date: | 2017–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imftnm:17/01&r=pay |
| By: | Margaret Cotton; Gregory Dark |
| Abstract: | This technical note is the second of three addressing information technology (IT) themes and issues relevant to tax administrations. This note addresses how to select a suitable IT system for core tax administration functions. Note one covers the use of IT in tax administrations and how to develop an information technology strategic plan (ITSP). The third note focuses on implementation of a commercial-off-the-shelf (COTS) system. These technical notes are primarily for tax administrations that have no technology to manage their core tax processes, or their technology is limited and outdated. These notes focus on core tax functions and do not address other business systems (e.g., payroll, finance, document, and asset management systems). |
| Keywords: | Tax administration;Information technology;Tax systems;Technical Notes and Manuals;procurement, commercial-off-the-shelf acquisition, COTS, core tax system functionality, General, Other, General, IT Management |
| Date: | 2017–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imftnm:17/02&r=pay |
| By: | Masiak, Christian; Block, Joern H.; Moritz, Alexandra; Lang, Frank; Kraemer-Eis, Helmut |
| Abstract: | The vast majority of firms in Europe are micro firms. Still, we know little about their financing patterns. Our paper aims to close this gap. Based on a large European firm-level data set, we find that micro firms differ in their financing patterns from small and medium-sized companies. Our empirical results show that micro firms are more likely to use internal financing instruments, whereas they are less likely to use state subsidies, trade credit or asset-based financing instruments. Furthermore, micro firms differ from medium-sized firms by using more short-term debt (credit card overdrafts, credit lines and bank overdrafts). The implications of these findings for micro firms and policy makers are discussed. |
| Keywords: | Micro firms,SMEs,enterprise financing in Europe,financing patterns |
| JEL: | C30 G20 G30 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eifwps:201744&r=pay |
| By: | Shaktiraj Bhavsar (Pandit Deendayal Petroleum University, Gujarat, India) |
| Abstract: | Marking half of his elected term as India’s Prime Minister, Narendra Modi, announced the Policy of Demonetization. Primarily aimed at eradicating black money, this policy caught the nation off-guard, resulting in financial chaos. The old unit of currency and its highest denominations that were the notes of rupees 500 and 1000 were demonetized and pulled out of the total cash flow in the country. These two denominations constituted 86% of the domestic cash supply. The objective of this paper to systematically analyze the consequences of this bold and unexpected policy through the secondary data. This policy change was strategically placed to block financial funding to terrorist organizations at the Kashmir border. |
| Keywords: | Policy, Demonetization, Economy, Government |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:smo:npaper:009&r=pay |
| By: | Margaret Cotton; Gregory Dark |
| Abstract: | This technical note is the third of three addressing information technology (IT) themes and issues relevant to tax administrations. This note focuses on implementation of a commercial-off-the-shelf (COTS) system in a developing country tax administration. The first note covers the use of IT in tax administrations and how to develop an information technology strategic plan (ITSP). The second note addresses how to select a suitable information technology system for core tax administration functions. These technical notes are primarily tax administrations that have no technology to manage their core tax processes, or their technology is limited and outdated. These notes focus on core tax functions and do not address other business systems (e.g., payroll, finance, document, and asset management systems). |
| Keywords: | Tax administration;Information technology;Tax systems;Technical Notes and Manuals;commercial-off-the-shelf implementation, project management, data conversion, business processes, General, Other, General, IT Management |
| Date: | 2017–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imftnm:17/03&r=pay |
| By: | Martin Shubik (Cowles Foundation, Yale University) |
| Abstract: | Money is a mystery and ?nancial institutions are often regarded as guardians and promoters of the mystery. These sketches are designed to help any reader interested in, but not technically trained in economics, understand markets, money, credit and the evolution of a mass market system set in the rich context of its political environment and society. We all want a good society. What is a good society is given by our joint vision, mutual respect and social concern but the implementation of the vision calls for the use and understanding of money, markets and ?nance. The e?icient functioning of a dynamic economy calls for the presence of money and ?nancial institutions. The great variety of ?nancial institutions in any advanced economy requires an understanding of what the whole looks like. Verbal description provides an overarching view of the mixture of history, law, philosophy, custom, habit, and political structure that supplies the background for the functioning of the economy. This has been vividly illustrated by Adam Smith, his teacher the Reverend Francis Hutcheson and his close friend David Hume. There are two di?erent but highly allied themes covered here. The ?rst explains the worth of economic theory and its importance while connecting it with the world of politics in which the economy dwells. The second is the application of economic thought to the operating problems of every society. The ?rst theme is covered in the ?rst nine chapters. Chapters 1, 2, and 3 supply the rich context of history, society, polity and law in which every economy is embedded. These chapters require no symbols or technical depth to be understood. In contrast Chapters 4 to 9 o?er a reasonably nontechnical exposition of some of the considerable development in formal economic theory pertaining to money and ?nancial institutions as economics becomes more scienti?c, balancing quantitative measures with quali?cations that help to explain what the numbers mean. The second theme is developed in Chapters 10-13 where economic theory with all of its abstractions has to be connected with social and political reality before it can be of use. This calls for both and understanding of physical and social facts, and an appreciation of the role of moral sentiment. Chapters 13 and 14 consider some alternative scenarios that we face in the near future. |
| Keywords: | Evolution of money, Coordination, Division of labor |
| JEL: | C70 D21 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2118r&r=pay |
| By: | Spencer Wheatley; Didier Sornette; Tobias Huber; Max Reppen; Robert N. Gantner |
| Abstract: | We develop a strong diagnostic for bubbles and crashes in bitcoin, by analyzing the coincidence (and its absence) of fundamental and technical indicators. Using a generalized Metcalfe's law based on network properties, a fundamental value is quantified and shown to be heavily exceeded, on at least four occasions, by bubbles that grow and burst. In these bubbles, we detect a universal super-exponential unsustainable growth. We model this universal pattern with the Log-Periodic Power Law Singularity (LPPLS) model, which parsimoniously captures diverse positive feedback phenomena, such as herding and imitation. The LPPLS model is shown to provide an ex-ante warning of market instabilities, quantifying a high crash hazard and probabilistic bracket of the crash time consistent with the actual corrections; although, as always, the precise time and trigger (which straw breaks the camel's back) being exogenous and unpredictable. Looking forward, our analysis identifies a substantial but not unprecedented overvaluation in the price of bitcoin, suggesting many months of volatile sideways bitcoin prices ahead (from the time of writing, March 2018). |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1803.05663&r=pay |
| By: | Angelos Dassios; Luting Li |
| Abstract: | We introduce a new diffusion process Xt to describe asset prices within an economic bubble cycle. The main feature of the process, which differs from existing models, is the drift term where a mean-reversion is taken based on an exponential decay of the scaled price. Our study shows the scaling factor on Xt is crucial for modelling economic bubbles as it mitigates the dependence structure between the price and parameters in the model. We prove both the process and its first passage time are well-defined. An efficient calibration scheme, together with the probability density function for the process are given. Moreover, by employing the perturbation technique, we deduce the closed-form density for the downward first passage time, which therefore can be used in estimating the burst time of an economic bubble. The object of this study is to understand the asset price dynamics when a financial bubble is believed to form, and correspondingly provide estimates to the bubble crash time. Calibration examples on the US dot-com bubble and the 2007 Chinese stock market crash verify the effectiveness of the model itself. The example on BitCoin prediction confirms that we can provide meaningful estimate on the downward probability for asset prices. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1803.08160&r=pay |
| By: | Delorme, Francois; Gosselin, Sarah |
| Abstract: | The current note explores new tax regimes in the context of a growing sharing economy |
| Keywords: | Public finance, finances publiques, Tax, Airbnb, Québec, Quebec, Canada |
| JEL: | H2 H20 |
| Date: | 2016–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85053&r=pay |
| By: | Vincent Malardé (Univ Rennes, CREM, CNRS, UMR 6211, F-35000 Rennes, France, and Marsouin); Thierry Pénard (Univ Rennes, CREM, CNRS, UMR 6211, F-35000 Rennes, France, and Marsouin) |
| Abstract: | Le succès de Airbnb, Blablacar ou Le Bon Coin témoigne de l’engouement des français pour les plateformes de consommation collaborative. Les récents travaux sur l’économie collaborative et l’économie du partage ont montré la diversité des motivations des utilisateurs : économiques, environnementales, idéologiques. Dans cet article nous cherchons à expliquer les déterminants des usages des plateformes de consommation collaborative, ainsi que des gains monétaires obtenus sur ces plateformes. En exploitant une enquête sur 2000 français âgés de plus de 18 ans, nous trouvons que les individus ayant des utilisateurs de plateformes dans leur entourage, un niveau de vie confortable, un niveau d’éducation élevé, et un niveau de confiance fort envers les autres, sont plus enclins à utiliser des plateformes collaboratives, et ont un usage plus diversifié de ces plateformes. Les effets varient selon le type de plateforme considéré et à l’intérieur de chaque type de plateforme, selon le rôle des utilisateurs (offreurs ou demandeurs). Enfin, les offreurs qui retirent les gains monétaires les plus élevés sur ces plateformes sont ceux qui ont un niveau de vie confortable et un niveau de confiance élevé, suggérant un renforcement des inégalités. |
| Keywords: | consommation collaborative, plateformes, confiance |
| JEL: | L86 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:2018-03&r=pay |