nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2020‒09‒07
35 papers chosen by

  1. Design Choices for Central Bank Digital Currency: Policy and Technical Considerations By Allen, Sarah; Capkun, Srdjan; Eyal, Ittay; Fanti, Giulia; Ford, Bryan; Grimmelmann, James; Juels, Ari; Kostiainen, Kari; Meiklejohn, Sarah; Miller, Andrew; Prasad, Eswar; Wüst, Karl; Zhang, Fan
  2. Token- or Account-Based? A Digital Currency Can Be Both By Rod Garratt; Michael Junho Lee; Brendan Malone; Antoine Martin
  3. Rise of the central bank digital currencies: drivers, approaches and technologies By Raphael Auer; Giulio Cornelli; Jon Frost
  4. Card-Sales Response to Merchant Contactless Payment Acceptance By David Bounie; Youssouf Camara
  5. Local ambassadors promote mobile banking in Northern Peru By Marcos Agurto; Habiba Djebbari; Sudipta Sarangi Author-Name: Brenda Silupú Author-Name: Carolina Trivelli Author-Name: Javier Torres
  6. Inequality and Gender Inclusion: Minimum ICT Policy Thresholds for Promoting Female Employment in Sub-Saharan Africa By Asongu, Simplice; Odhiambo, Nicholas
  7. Counting ‘micro-workers’: societal and methodological challenges around new forms of labour By Paola Tubaro; Clément Le Ludec; Antonio Casilli
  8. Does FinTech Substitute for Banks? Evidence from the Paycheck Protection Program By Isil Erel; Jack Liebersohn
  9. Information, Price, and Barriers to Adoption and Usage of Mobile Money Evidence from a Field Experiment in The Gambia By Guillermo Cruces Author-Name: Hamidou Jawara Author-Name: Adama Touray Author-Name: Fatoumata Singhateh
  10. A Minting Mold for the eFranc: A Policy Paper By Hans Gersbach; Roger Wattenhofer
  11. Social Nudges as Mitigators in Privacy Choice Environments By Klumpe, Johannes
  12. Developing international perspectives on digital competition policy By Sean F. Ennis; Amelia Fletcher
  13. Customers’ Perception on the Trustworthiness of Electronic Commerce: A Qualitative Study By Pregoner, Joseph Dave Mendoza; Opalla, Ivan Louie; Uy, John Dave; Palacio, Melyza
  14. Combining Financial-Literacy Training and Text-Message Reminders to Influence Mobile-Money Use and Financial Behavior among Members of Village Savings and Loan Associations:Experimental Evidence from Malawi By Levison Chiwaula Author-Name: Mirriam Matita Author-Name: Tayamika Kamwanja Author-Name: Lucius Cassim Author-Name: Marcos Agurto
  15. Social Media and Youth Empowerment: An Empirical Inquiry By Nkem Fab-Ukozor; Ifeoma C Ojiakor
  16. Digital innovation in higher education: A questionnaire to Portuguese universities and polytechnic institutes By Paulo Nuno Vicente; Margarida Lucas; Vânia Carlos
  17. Contemporary Models of Access to Customers in Serbian Banking Sector By Ivana Marinovic Matovic
  18. Transforming Finance in the Middle East and North Africa By Arezki,Rabah; Senbet,Lemma W.
  19. Da confluência entre Big Data e Direito da Concorrência: As concentrações digitais - O caso Facebook/WhatsApp By Ana Rodrigues Bidarra
  20. Monetary Systems By Julia M. Puaschunder
  21. Evolving Internet Use Among Canadian Seniors By Schimmele, Christoph; Davidson, Jordan
  22. The impact of internet penetrationon corporate income tax filing in South Africa By Lediga, Collen
  23. Modern approaches to the formation of the concept of legal support for the digital economy By Shmaliy, Oksana (Шмалий, Оксана); Grechkina, Olga (Гречкина, Ольга); Biksitova, Zhanna (Бикситова, Жанна); Dushakova, Lesya (Душакова, Леся); Sushkova, Olga (Сушкова, Ольга); Margiev, Andrey (Маргиев, Андрей)
  24. Blockchain Vending Machine: A Smart Contract-Based Peer-to-Peer Marketplace for Physical Goods By Schär, Fabian; Schuler, Katrin; Wagner, Tobias
  25. The Future of Artificial Intelligence in International Healthcare: An Index By Julia M. Puaschunder
  26. A World Without Borders Revisited: The Impact of Online Sales Tax Collection on Shopping and Search By Mallick Hossain
  27. A Survey of Research on Retail Central Bank Digital Currency By John Kiff; Jihad Alwazir; Sonja Davidovic; Aquiles Farias; Ashraf Khan; Tanai Khiaonarong; Majid Malaika; Hunter K Monroe; Nobu Sugimoto; Hervé Tourpe; Peter Zhou
  28. Digitalization in Two-Sided Platform By Filomena Garcia; Muxin Li
  30. Games with Unobservable Heterogeneity and Multiple Equilibria : An Application to Mobile Telecommunications By Mathieu Marcoux
  31. Equity, Inclusivity, and Innovative Digital Technologies to Improve Adolescent and Young Adult Health By Sonoo Thadaney Israni; Michael E. Matheny; Ryan Matlow; Danielle Whicher
  32. A Quantitative Theory of the Credit Score By Satyajit Chatterjee; Dean Corbae; Kyle P. Dempsey; José-Víctor Ríos-Rull
  33. Manipulation and Learning by Peers in Online Marketplaces By Elias Carroni; Giuseppe Pignataro; Alessandro Tampieri
  34. Financial inclusion research around the world: a review By Ozili, Peterson K
  35. The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID By Viral V. Acharya; Sascha Steffen

  1. By: Allen, Sarah (Initiative for CryptoCurrencies and Contracts (IC3)); Capkun, Srdjan (Initiative for CryptoCurrencies and Contracts (IC3)); Eyal, Ittay (Initiative for CryptoCurrencies and Contracts (IC3)); Fanti, Giulia (Initiative for CryptoCurrencies and Contracts (IC3)); Ford, Bryan (Initiative for CryptoCurrencies and Contracts (IC3)); Grimmelmann, James (Initiative for CryptoCurrencies and Contracts (IC3)); Juels, Ari (Initiative for CryptoCurrencies and Contracts (IC3)); Kostiainen, Kari (Initiative for CryptoCurrencies and Contracts (IC3)); Meiklejohn, Sarah (Initiative for CryptoCurrencies and Contracts (IC3)); Miller, Andrew (Initiative for CryptoCurrencies and Contracts (IC3)); Prasad, Eswar (Cornell University); Wüst, Karl (Initiative for CryptoCurrencies and Contracts (IC3)); Zhang, Fan (affiliation not available)
    Abstract: Central banks around the world are exploring and in some cases even piloting Central Bank Digital Currencies (CBDCs). CBDCs promise to realize a broad range of new capabilities, including direct government disbursements to citizens, frictionless consumer payment and money-transfer systems, and a range of new financial instruments and monetary policy levers. CBDCs also give rise, however, to a host of challenging technical goals and design questions that are qualitatively and quantitatively different from those in existing government and consumer payment systems. A well-functioning CBDC will require an extremely resilient, secure, and performant new infrastructure, with the ability to onboard, authenticate, and support users on a massive scale. It will necessitate an architecture simple enough to support modular design and rigorous security analysis, but flexible enough to accommodate current and future functional requirements and use cases. A CBDC will also in some way need to address an innate tension between privacy and transparency, protecting user data from abuse while selectively permitting data mining for end-user services, policymakers, and law enforcement investigations and interventions. In this paper, we enumerate the fundamental technical design challenges facing CBDC designers, with a particular focus on performance, privacy, and security. Through a survey of relevant academic and industry research and deployed systems, we discuss the state of the art in technologies that can address the challenges involved in successful CBDC deployment. We also present a vision of the rich range of functionalities and use cases that a well-designed CBDC platform could ultimately offer users.
    Keywords: new financial technologies, digital money, cryptocurrencies, payment systems
    JEL: E42 E52 E58
    Date: 2020–07
  2. By: Rod Garratt; Michael Junho Lee; Brendan Malone; Antoine Martin
    Abstract: Digital currencies, including potential central bank digital currencies (CBDC), have generated a lot of interest over the past decade, since the emergence of Bitcoin. The interest has only grown in recent months because of a desire for contactless payment methods, stemming from the coronavirus pandemic. In this post, we discuss a common distinction made between “token-based” and “account-based” digital currencies. We show that this distinction is problematic because Bitcoin and many other digital currencies satisfy both definitions.
    Keywords: account; token; cryptocurrency; bitcoin
    JEL: E42
    Date: 2020–08–12
  3. By: Raphael Auer; Giulio Cornelli; Jon Frost
    Abstract: Central bank digital currencies (CBDCs) are receiving more attention than ever before. Yet the motivations for issuance vary across countries, as do the policy approaches and technical designs. We investigate the economic and institutional drivers of CBDC development and take stock of design efforts. We set out a comprehensive database of technical approaches and policy stances on issuance, relying on central bank speeches and technical reports. Most projects are found in digitised economies with a high capacity for innovation. Work on retail CBDCs is more advanced where the informal economy is larger. We next take stock of the technical design options. More and more central banks are considering retail CBDC architectures in which the CBDC is a direct cash-like claim on the central bank, but where the private sector handles all customer-facing activity. We conclude with an in-depth description of three distinct CBDC approaches by the central banks of China, Sweden and Canada.
    Keywords: central bank digital currency, CBDC, central banking, digital currency, digital money, distributed ledger technology, blockchain
    JEL: E58 G21
    Date: 2020–08
  4. By: David Bounie (SES - Département Sciences Economiques et Sociales - Télécom ParisTech, ECOGE - Economie Gestion - I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris - CNRS - Centre National de la Recherche Scientifique); Youssouf Camara (IP Paris - Institut Polytechnique de Paris)
    Abstract: Disruptive innovations in digital payments are happening in a large number of countries around the world. In this paper, we investigate how merchants' acceptance of a contactless card technology affects card sales. Using score matching and difference-in-difference techniques on a unique sample of about 275,580 merchants in France, we find that accepting contactless payments in 2018 increases the card-sales amount by 15.3 percent on average (and by 17.1 percent the card-sales count) compared to merchants who do not accept contactless payments. We also find evidence that accepting contactless payments exerts a positive spillover of about 1.3 percent in the amount of contact card sales, and thus significantly increases the average annual card-sales amount and count for small merchants and new entrepreneurs
    Keywords: difference-in-difference,card acceptance,contactless cards,digital payments
    Date: 2020
  5. By: Marcos Agurto; Habiba Djebbari; Sudipta Sarangi Author-Name: Brenda Silupú Author-Name: Carolina Trivelli Author-Name: Javier Torres
    Abstract: We experiment with a novel way to boost information acquisition that exploits existing social ties between the promoter of a new financial technology and community members. We offer information and training workshops on a new mobile-money platform in peri-urban and rural areas in Peru. In the treatment group, workshops are led by promoters who are personally known to the invited participants. In the control group, comparable individuals are invited to attend similar workshops, but the workshops are led by agents external to the community. Our findings suggest that lack of information impedes product adoption, which is itself limited by lack of trust in the individual who provides the information.
    Keywords: Financial inclusion, social networks, information transmission, trust
    JEL: D91 G23 I22 I31 O33
    Date: 2020
  6. By: Asongu, Simplice; Odhiambo, Nicholas
    Abstract: The study assesses how ICT modulates the effect of inequality on female economic participation in a panel of 42 countries in sub-Saharan Africa over the period 2004-2014. Three inequality indicators are used, namely: the Gini coefficient, the Atkinson index and the Palma ratio. The adopted ICT indicators are mobile phone penetration, internet penetration and fixed broadband subscriptions. Three gender economic inclusion indicators are also used for the analysis, namely: female labour force participation, female unemployment and female employment. The Generalised Method of Moments is employed as empirical strategy. The findings show that enhancing ICT beyond certain thresholds is necessary for ICT to mitigate inequality in order to enhance gender economic participation. First, for female labour force participation, a minimum threshold of 165.714 mobile phone penetration per 100 people is required for the Palma ratio. Second, minimum ICT thresholds for the reduction of female unemployment are: (i) 87.783, 107.486 and 152.500 mobile phone penetration per 100 people for respectively, the Gini coefficient, the Atkinson index and the Palma ratio; (ii) 39.618 internet penetration per 100 people for the Atkinson index and (iii) 4.500 fixed broadband subscriptions for the Palma ratio. Third, the corresponding ICT thresholds for the promotion of female employment are: (i) 120.369 and 85.533 mobile phone penetration per 100 people for respectively, the Gini coefficient and the Atkinson index and (ii) 30.005 internet penetration per 100 people for the Gini coefficient. The established thresholds make economic sense and can be feasibly implemented by policy makers in order to induce favourable effects on gender economic inclusion dynamics.
    Keywords: Africa; ICT; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2019–01
  7. By: Paola Tubaro (LRI - Laboratoire de Recherche en Informatique - CNRS - Centre National de la Recherche Scientifique - UP11 - Université Paris-Sud - Paris 11 - CentraleSupélec, TAU - TAckling the Underspecified - LRI - Laboratoire de Recherche en Informatique - CNRS - Centre National de la Recherche Scientifique - UP11 - Université Paris-Sud - Paris 11 - CentraleSupélec - Inria Saclay - Ile de France - Inria - Institut National de Recherche en Informatique et en Automatique, CNRS - Centre National de la Recherche Scientifique); Clément Le Ludec (I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris, SES - Département Sciences Economiques et Sociales - Télécom ParisTech, IP Paris - Institut Polytechnique de Paris, SID - Sociologie Information-Communication Design - I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris); Antonio Casilli (I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris, SES - Département Sciences Economiques et Sociales - Télécom ParisTech, IP Paris - Institut Polytechnique de Paris, SID - Sociologie Information-Communication Design - I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: 'Micro-work' consists of fragmented data tasks that myriad providers execute on online platforms. While crucial to the development of data-based technologies, this little visible and geographically spread activity is particularly difficult to measure. To fill this gap, we combined qualitative and quantitative methods (online surveys, in-depth interviews, capture-recapture techniques, and web traffic analytics) to count micro-workers in a single country, France. On the basis of this analysis, we estimate that approximately 260,000 people are registered with micro-work platforms. Of these some 50,000 are 'regular' workers who do micro-tasks at least monthly and we speculate that using a more restrictive measure of 'very active' workers decreases this figure to 15,000. This analysis contributes to research on platform labour and the labour in the digital economy that lies behind artificial intelligence.
    Keywords: Micro-work,digital platforms,labour statistics
    Date: 2020
  8. By: Isil Erel; Jack Liebersohn
    Abstract: New technology promises to expand the supply of financial services to borrowers poorly served by the banking system. Does it succeed? We study the response of FinTech to financial services demand created by the introduction of the Paycheck Protection Program (PPP). We find that FinTech is disproportionately used in ZIP codes with fewer bank branches, lower incomes, and a larger minority share of the population, as well as in industries with little ex ante small-business lending. Its role in PPP provision is also greater in counties where the economic effects of the COVID-19 pandemic were more severe. To understand whether these differences arise because certain groups are switching from traditional banks to FinTech or if they are being newly served by FinTech, we study whether FinTech-enabled PPP loans were more widespread in areas with fewer traditional loans. Using the predicted responsiveness of traditional banks to the program as an instrument, we show that borrowers were more likely to get a FinTech-enabled PPP loan if they were located in ZIP codes where local banks were unlikely to originate PPP loans.
    JEL: G00 G01 G2 G21 G23 G28 H12 H2 H3
    Date: 2020–08
  9. By: Guillermo Cruces Author-Name: Hamidou Jawara Author-Name: Adama Touray Author-Name: Fatoumata Singhateh
    Abstract: Mobile money has been heralded as a way to foster financial inclusion. While it has become popular in developing countries, most notably in African nations, there are still strong barriers to its adoption and usage. The purpose of this study is to examine the extent to which a lack of information and high prices are limiting factors in the adoption of mobile money. We implemented a simple randomized controlled trial among a group of difficult-to- access potential users: mobile phone users in The Gambia who had opened mobile money wallets but had not made a transaction. We offered meaningful price discounts on withdrawal charges, and made these discounts salient by reminding users about them every month for a period of six months. Our analysis measures different dimensions of mobile money use by drawing from administrative mobile phone company records. We also carried out a post- treatment survey to gauge knowledge about, and attitudes towards, mobile money. Our results indicate that treated individuals were substantially more aware than controls about the uses of mobile wallets and about the meaningful discounts of 15% and 30% offered. However, only a small fraction of treated individuals started using mobile wallets, and the difference was not statistically significant. Perceptions of safety, trust in the platform, and service reliability were not significantly different between treated and controls. However, treated individuals were more likely to perceive the service charges to be expensive. We interpret this as evidence that our population of interest was uninformed about the platform at large. While our treatment increased awareness about its capabilities and operation, potentially fostering its adoption, it also increased awareness of the relatively high fees it involves, which in turn limited usage. Both a lack of information and high prices need to be addressed to foster the adoption and usage of mobile money in developing countries.
    Keywords: Mobile wallet, barriers to adoption and usage, developing countries, Gambia
    JEL: D13 G21 O16 P34
    Date: 2020
  10. By: Hans Gersbach (CER-ETH –- Center of Economic Research and CEPR, ETH Zurich, Switzerland); Roger Wattenhofer (Distributed Computing Group, ETH Zurich, Switzerland)
    Abstract: We suggest a blueprint for an eFranc as a possible complement for the Swiss monetary system to ensure the long-term stability of its money. An eFranc is a non-interest-bearing digital form of the legal tender available to the public. The public can convert banknotes or part of its bank deposits into eFrancs, subject to the banks’ ability to obtain the corresponding amount of eFrancs from the central bank. There is free conversion of eFrancs into bank deposits (and into banknotes). For the technical implementation of the eFranc, we suggest a two-layer system combining a permissioned asynchronous blockchain without consensus which provides a secure environment for validating transactions (base layer) plus a peer-to-peer payment network (top layer).
    Keywords: eFranc, Swiss Monetary System, Financial Stability, Swiss National Bank, Proof-of-stake Blockchains
    Date: 2020–08
  11. By: Klumpe, Johannes
    Abstract: In light of prominent data leaks and a surge of civilian surveillance systems, information service providers are confronted with an increased level of skepticism towards their privacy practices. The predicament is that not only do providers rely on users' information to optimize their services, users also risk losing the benefits of increasingly personalized services. Research on information privacy has paid great attention to explaining and predicting factors of privacy-related outcomes. On a macro level, researchers have come up with a plethora of models that are focused on deliberate and rational decision-making. In contrast, non-rational decision-making within privacy choice environments (i.e., presentation of privacy-related choices to users) has to date only been sparsely investigated. A more holistic approach to privacy-related outcomes is provided by the Person-Technology fit model. This model describes a relationship between an individual and a technology, which, when it is out of equilibrium, causes stress for the individual. Research on technology-induced stress has discovered that it affects both general stress (e.g., psychological strain) and situational stress outcomes (e.g., behavioral reactions). In this regard, research has explicated intrusive technology features (i.e., features that acquire information from and provide information to the user) as the most salient drivers of stress caused by privacy invasions for users of digital services. However, previous contributions have focused on psychological antecedents of privacy invasions, neglecting how firms may design and enhance privacy choice environments to alleviate privacy-related stress. Likewise, existing literature lacks to address how service providers can combine different technology features in the design of their services to reduce privacy-related stress. Hence, digital nudging, which refers to the practice of influencing user behavior in digital choice environments by leveraging the effect of cognitive biases and decision heuristics in user interface design, holds promising potential for service providers to overcome the detrimental effects of privacy-related stress. Specifically, research has found evidence that social nudges, defined as nudges based on social influences (i.e., unwritten social laws), can guide users to better decisions in choice environments. However, social nudging has been ignored in the context of privacy-related decision making. This thesis draws on four studies that were conducted to investigate how intrusive technology features affect privacy-related outcomes, and how to utilize social nudges as mitigating technology features in privacy choice environments. The first study describes a laboratory experiment and a subsequent field experiment, which investigated how the intrusive effects of unintentional voice activations of smart home assistants drive user strain and interpersonal conflicts through privacy invasions, while the study demonstrates how anthropomorphic design features alleviate user strain. The second study elaborates upon the intrusive effect of push- based information delivery on users’ geographical location information disclosure through privacy concerns, which can be attenuated by signals of social proof in mobile app stores. Finally, for the third study, we cooperated with the German startup Partner der Wissenschaft UG to investigate how low message interactivity affects users’ information disclosure in a chatbot conversation, which we enhanced by employing platform self-disclosure nudges. In sum, this thesis highlights the importance of understanding the technology-stressor-strain causal relationship for information services by providing significant contributions: First, the findings extend previous research on technology-induced stress by illuminating specific design mechanisms for digital services. In this regard, the studies demonstrate how intrusive technology features drive privacy-related stressors and ultimately cause users to disengage with the respective information services. Thereby, we address the calls for particular and context- related intrusive technology features with applicable design recommendations from Ayyagari, Grover, and Purvis (2011) and Speier, Vessey, and Valacich (2003). Second, this thesis expands the Person-Technology model by a new layer of technology features that help to mitigate and overcome users’ privacy-related stress. More specifically, this study illuminates how social nudges can be utilized as mitigating strategies for technology-induced stress and hereby effectuate better privacy-related outcomes. In this regard, this thesis addresses the calls for research from Kretzer and Maedche (2018) and Mirsch, Lehrer, and Jung (2017) on specific and context-related digital nudges with applicable design recommendations by putting together a catalog of social nudges for privacy choice environments.
    Date: 2020–06–24
  12. By: Sean F. Ennis (Centre for Competition Policy and Norwich Business School, University of East Anglia); Amelia Fletcher (Centre for Competition Policy and Norwich Business School, University of East Anglia)
    Abstract: The year 2019 was a turning point in the debate around how to address competition issues in digital platform markets. At the start of the year, the focus was on reform of competition law. By July, there had been calls – on both sides of the Atlantic – for pro-competitive ex ante regulation. This paper considers these developments through the lens of three influential expert reports, from the EC, UK and US. While the reports offer similar diagnoses of the underlying economic drivers of competition concerns in digital platform markets, they reach somewhat different policy conclusions. The EC report, which was commissioned first, highlights recommendations for antitrust. While it recognises that a regulatory regime may be needed in the longer run, this option is not considered in any detail. By contrast, the UK and US expert reports argue strongly for ex ante regulation. There are other differences too. While the US and EC experts were inclined to relax or reverse burdens of proof for both mergers and abuse of dominance, albeit in specified circumstances only, the UK experts did not recommend this. This paper compares these reports under the categories of mergers, dominance, data, regulation, and international.
    Keywords: Antitrust, Competition Policy, Digital Markets, Platforms, Merger Policy, Regulation, Big Data
    JEL: K21 L13 L40 L50 L86
    Date: 2020–08–24
  13. By: Pregoner, Joseph Dave Mendoza (University of the Immaculate Conception); Opalla, Ivan Louie; Uy, John Dave; Palacio, Melyza
    Abstract: Electronic commerce is growing popular across the world because of the convenience it brings to online sellers and online customers. However, as the electronic commerce rises, problematic issues like privacy concerns, dissatisfaction, incompetent deliveries, and the most important – trust issues – also surface. Numerous previous studies indicated that the purchase intention and behavior of the online customers depend on their perceived risk and shopping experience in electronic commerce. Some studies also specifically stated that personal information, product quality, security, and business reputation are the usual factors which the customers evaluate to deem the online business as trustworthy. The researchers conduct this qualitative study concentrated on the perceived trustworthiness of e-commerce to know if it complements the results of other studies and to provide information to online users which can guide them in either selling or purchasing products online. Using purposive sampling and thematic data analysis, the researchers had eight in competence area, three in benevolence, and two in integrity as determining factors on the online business’ trustworthiness. The findings of the study claimed that online customers value the competence, benevolence, and integrity of the online business to be perceived as a trustworthy one.
    Date: 2020–04–26
  14. By: Levison Chiwaula Author-Name: Mirriam Matita Author-Name: Tayamika Kamwanja Author-Name: Lucius Cassim Author-Name: Marcos Agurto
    Abstract: Mobile money is increasingly promoted as a strategy to improve financial outcomes and livelihoods in low-income countries. However, its adoption and use among the poor remains low. We exploited a randomized experiment that exposed members of Village Savings and Loan Associations in Malawi to a financial-literacy and mobile-money training program, which was reinforced by weekly text-message reminders. We analyzed the impact of our intervention using survey data collected in the field as well as administrative data from the main telecommunications operators in the area. We found that treated individuals were more likely to have greater knowledge of mobile-money transactions than non-treated ones. They were also more likely to report receiving and saving money using mobile money and were more likely to report that they kept their savings in a formal financial institution. Interestingly, these effects were concentrated in relatively less economically developed areas. We used administrative data to analyze the effects of our intervention on the volume of mobile-money transactions. While the estimated effect had the expected positive sign, it was not statistically significant. We hypothesized that this result may be related to the fact that individuals also relied on local agents to perform mobile-money transactions; such behavior was not captured in administrative data. This is among the first studies to provide rigorous field-based evidence regarding how financial training supported by text-message reminders can influence mobile-money behavior. It is also among the very first to study the effects of such an intervention among members of Village Savings and Loan Associations.
    Date: 2020
  15. By: Nkem Fab-Ukozor (Imo State University Owerri, Nigeria); Ifeoma C Ojiakor (Imo State University Owerri, Nigeria)
    Abstract: The flight of global unemployment is frightening especially with more jobs being rendered redundant due to the advent of Information Communication Technology notably the internet. Despite this ugly trend, stakeholders are optimistic that the internet if effectively applied would create more job opportunities. Anchored on Uses and Gratification theory of communication, the study is an inquiry into specific areas of social media economic empowerment among users. In the method section, mixed method design which involved descriptive survey and factorial design was employed using descriptive analysis and ANOVA statistical tools. The sample population was 143 social media users in Anambra State whose ages ranged from 23-37 years. The participants were sampled from a pool of social media users using purposive and convenient technique. The result revealed that youths’ awareness on the empowerment potential of social media is high, while indicating that majority (65.7%) of the youths are attracted by social media by its leisure appeal and they use it for chatting, connecting friends and leisure compared to 34.3% of youths who use it for learning, empowerment and opportunities. Furthermore, significant differences were observed between males and females on social media user appeal. It is recommended that youths be mentored on the empowerment potentials of social media by the successful leaders in the industry.
    Keywords: information and communication technology, internet, leisure, social media, unemployment, youth empowerment
    Date: 2020–04
  16. By: Paulo Nuno Vicente; Margarida Lucas; Vânia Carlos
    Abstract: Over the past decade, the societal impact of digital transformation, with the prospects of a Fourth Industrial revolution, has led to an innovation imperative in European policymaking regarding Higher Education Institutions (HEIs). This article examines Portuguese universities and polytechnic institutes, the two components of the national higher education system, in order to (1) characterize digital infrastructure, networks and equipment availability (hardware and software), (2) describe the self-reported digital practices among Portuguese HEIs’ faculty members, and (3) verify the alignment between faculty members’ digital practices, teaching environment and European recommendations for digital education. The study, descriptive in nature, conducts the most comprehensive online questionnaire available to date on digital innovation in Portuguese HEIs (N=547). The main constraints to digital innovation in Portuguese higher education teaching are the limited infrastructure and resources, a conservative academic culture, a lack of funding opportunities, insufficient technological resources and technical support.
    Keywords: Digital innovation; Higher education; Infrastructure; Faculty; Digital practices
    JEL: I23
    Date: 2020–03
  17. By: Ivana Marinovic Matovic (Addiko Bank AD Beograd, Serbia,)
    Abstract: Globalization and increasingly intense competition have led to a new concept of access to bank customers. The new approach involves increasing the sales of banking products and services, maintaining existing customers, attracting new customers, and at the same time maintaining a high level of competitiveness. The new approach to bank customers is using contemporary Customer Relationship Management models, which support cross-selling processes. In the banking sector in Serbia, different forms of promotion are used in sales strategies: advertising, sales promotion, public relations, directs sales, direct marketing, sponsorship, and other forms. In the constant search for new clients, emphasis is placed on the predictive CRM environment. The predictive environment, by collecting and analyzing data from the media, from social networks, various services and other sources, better defines needs, and creates personalized offers for bank customers. The aim of this paper is to analyze the application of contemporary models of access to customers in the banking sector of Serbia, primarily the “Banking CRM model†. The paper will make a significant contribution in terms of understanding the CRM concept in Serbian banking sector, and the possibilities of its application in contemporary banking practice, in order to improve that the bank's sales message reaches the customer in the form of integrated personalized campaigns.
    Keywords: CRM, banking sector, Republic of Serbia, customer relationship
    Date: 2020–04
  18. By: Arezki,Rabah; Senbet,Lemma W.
    Abstract: This paper argues for a transformation of finance to support the economic and social transformation of the Middle East and North Africa. The paper first documents the existing financial system in the region. The system is heavily skewed toward banking, relative to non-banking services, such as stock and corporate bond markets, with significant heterogeneity across countries. Second, the paper discusses the stance of macroeconomic policy in the region, which has had important implications for the destination, profitability, and quality of bank lending and the limited evolution of the financial system. Third, the paper explores the impact of technology on financial development, with particular attention to prospects for the development of fintechs. Entrenched incumbency of banks has limited the role of non-bank operators in fostering market contestability and fintech development. The paper is a call to the authorities and policy makers in the Middle East and North Africa to break with the status quo and business as usual. It underscores the need for a ?moonshot approach? focused on establishing the foundations of a new digital economy and its role in promoting a well-functioning and inclusive financial economy to support the development needs of the region.
    Date: 2020–06–24
  19. By: Ana Rodrigues Bidarra
    Abstract: A economia digital revolucionou a estrutura tradicional e o funcionamento dos mercados. Os dados pessoais são considerados o “novo petróleo” da actividade económica, um recurso fundamental cuja recolha e análise em larga escala são potenciadas pelo desenvolvimento das TIC. A simbiose entre Big Data e Big Analytics pode promover um ambiente concorrencial benéfico, para empresas e consumidores, mas à medida que se expandem as fronteiras da inovação e da ciência surgem preocupações que colocam em causa esta nova dinâmica de mercado. Pugnamos que, na circunstância em que as empresas concorrem nos mercados digitais orientados por dados e os consumidores, enquanto titulares de dados pessoais, são negativamente afectados, designadamente pelo decréscimo da qualidade do tratamento dos dados pessoais, há lugar à intersecção entre o direito da concorrência e o direito da protecção de dados que justifica uma intervenção coordenada com vista à análise holística das questões suscitadas. As plataformas digitais multilaterais com modelos de negócio assentes na monetização de Big Data através da publicidade apresentam um desafio aos instrumentos de concorrência tradicionais, baseados no preço, que se encontram desadequados para proceder a uma apreciação cabal destes mercados. Através da análise da decisão da CE na operação de concentração Facebook/WhatsApp demonstramos a necessidade de melhor compreensão do funcionamento das plataformas multilaterais e a premência na adequação das ferramentas de análise jusconcorrenciais à apreciação das concentrações motivadas por dados num contexto digital.
    Keywords: Big Data; direito da concorrência; protecção de dados pessoais; controlo de concentrações; plataformas multilaterais
    JEL: K21 L12 L41
    Date: 2020–04
  20. By: Julia M. Puaschunder (The New School, Department of Economics, Schwartz Center for Economic Policy Analysis, New York, USA)
    Abstract: Throughout modern international finance, different monetary regimes existed. International monetary arrangements initially arose from the need to provide international trade with easy means of settling trans-border payments (Semmler 2019). For centuries, both domestic and international trade was carried out using gold and silver (Semmler 2019). The Gold standard during the Interwar Period since 1870, the Bretton Woods system and the following Euro currency introduction. This essay summarizing the differences between the three Monetary and currency systems: Gold standard, Bretton Woods and Euro-System and highlights the success and failures of the different approaches to guide monetary matters throughout history.
    Keywords: Bretton Woods System, Central Banks, Currency System, Economic Stability, Euro Currency, Finance, Fiscal Policy, Gold standard, History, International Trade, Monetary Policy
    Date: 2020–04
  21. By: Schimmele, Christoph; Davidson, Jordan
    Abstract: Since 2016, Internet use rates among Canadians aged 15 to 64 have reached near-saturation (97.2%) levels. However, the diffusion of information and communications technology (ICT), including the Internet, has proceeded at a much slower pace among Canadians aged 65 and older. Given that Canada is an aging society, knowing about the factors associated with Internet use among seniors is crucial for ensuring their access to it. This study uses four cycles of the General Social Survey (2007, 2010, 2013 and 2016) to describe changes in Canadian seniors’ rates of Internet use, and examines the sociodemographic factors associated with such use.
    Keywords: Technology, Seniors, Internet use
    Date: 2019–07–10
  22. By: Lediga, Collen
    Abstract: Tax administrations around the world have introduced e-filing of tax returns due to its potential to improve tax return filing compliance. The introduction of this service for businesses in South Africa has not yielded the expected results. Drawing on tax administrative data on tax return filing and population census data, the study aims at determining whether internet access in the country, could have contributed to the less impact of the introduced administrative intervention. Accounting for specific characteristics of the areas in the country, and geoclassication (urban or rural area), we find that an increase in the fraction of household areas with internet access by 10 percentage points, raises the fraction of businesses that do submit a tax return by 1.86 percentage points. The results of the analysis highlights that the impact of the introduction of e-filing services for tax returns submission, is dependent on the internet coverage of the area.
    Keywords: corporate taxation,e-filing,less developed countries,tax administration
    JEL: H2 H7
    Date: 2020
  23. By: Shmaliy, Oksana (Шмалий, Оксана) (The Russian Presidential Academy of National Economy and Public Administration); Grechkina, Olga (Гречкина, Ольга) (The Russian Presidential Academy of National Economy and Public Administration); Biksitova, Zhanna (Бикситова, Жанна) (The Russian Presidential Academy of National Economy and Public Administration); Dushakova, Lesya (Душакова, Леся) (The Russian Presidential Academy of National Economy and Public Administration); Sushkova, Olga (Сушкова, Ольга) (The Russian Presidential Academy of National Economy and Public Administration); Margiev, Andrey (Маргиев, Андрей) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: One of the main tasks of the state at the present stage is the development of a clear concept for the development of innovative technologies in socially significant areas of life. The successful implementation of this concept is mediated by an understanding of the technological component that determines the operation of algorithms encoded in software, and legal support of innovative digital technologies. The rapid processes of the emergence and spread of new digital technologies in the economic turnover and, above all, in the financial sphere, dictate the need to increase the role of the state in the legislative support of their regulation and implementation. In this regard, actual monitoring of the latest digital technologies is in demand with the development of legal models for their adaptation to Russian conditions.
    Date: 2020–04
  24. By: Schär, Fabian; Schuler, Katrin; Wagner, Tobias
    Abstract: In this paper, we propose an autonomous vending machine that is governed by a public Blockchain and smart contracts platform. Set up as a decentralized autonomous organization, it serves as an open marketplace for physical goods, where anyone can buy and/or sell objects. We propose a basic architecture for the machine, analyze pricing and fee mechanisms and examine potential pitfalls. Moreover, we discuss open issues, possible extensions and further areas for improvement. We conclude that the deployment of such machines could significantly improve our understanding of decentralized autonomous organizations and build a bridge between virtual and physical markets. Insights gained from such an experiment may raise important questions for further research.
    Keywords: Blockchain, Decentralized Autonomous Organization, Distributed Ledger, Internet of Things, Smart Contract, Tokenization.
    JEL: D47 L17 O39
    Date: 2020
  25. By: Julia M. Puaschunder (The New School, New York, NY USA)
    Abstract: The currently ongoing COVID-19 crisis has challenged healthcare around the world. The call for global solutions in international healthcare pandemic crisis and risk management has reached unprecedented momentum. Digitalization, Artificial Intelligence and big data-derived inferences are supporting human decision making as essential healthcare enhancements as never before in the history of medicine. In today’s healthcare sector and medical profession, AI, algorithms, robotics and big data are used for monitoring of large-scale medical trends by detecting and measuring individual risks based on big data-driven estimations. This article provides a snapshot of the current state-of-the-art of AI, algorithms, big data-derived inferences and robotics in healthcare but also medical responses to COVID-19 in the international arena. International differences in the approaches to combat global pandemics become apparent serving as interesting case study on how to avert global pandemics successfully with AI in the future. Empirically, the article answers what countries have favourable conditions to provide AI solutions for global healthcare and pandemic crises monitoring and alleviation when compared over the entire world? First, an index based on internet connectivity – as a proxy for digitalization and AI advancement– as well as Gross Domestic Product – as indicator for economic productivity – is calculated to outline global pandemic healthcare solution innovation hubs with economic impetus around the world. The parts of the world that feature internet connectivity and high GDP are likely to lead on AI-driven big data monitoring insights for pandemic prevention. When comparing countries worldwide, AI advancement is found to be positively correlated with anti-corruption. AI thus springs from non-corrupt territories of the world. Second, a novel anti-corruption artificial healthcare index is therefore presented that highlights those countries in the world that have vital AI growth in a non-corrupt environment. These non-corrupt AI centres hold comparative advantages to lead on global artificial healthcare solutions against COVID-19 and serve as pandemic crisis and risk management innovators of the future. Anti-corruption is also positively related with better general healthcare. Therefore, finally, a third index that combines internet connectivity, anti-corruption as well as healthcare access and quality is presented. The countries that score high on AI, anti-corruption and healthcare excellence are presented as ultimate world-leading, innovative global pandemic alleviation centres. The advantages but also potential shortfalls and ethical cliffs in the novel use of monitoring Apps, big data inferences and telemedicine to prevent pandemics are discussed.
    Keywords: Access to healthcare, Advancements, AI-GDP Index, Apps, Artificial Intelligence, Coronavirus, Corruption-free maximization of excellence and precision, Corruption Perception (CPI)-Global Connectivity Index, Corruption Perception-Global Connectivity-Healthcare Index COVID-19, Decentralized grids, Economic growth, Healthcare, Human resemblance, Humanness, Innovation, Market disruption, Market entrance, Pandemic, Rational precision, Social stratification, Supremacy, Targeted aid, Telemedicine
    Date: 2020–06
  26. By: Mallick Hossain
    Abstract: I study the effect of closing the online sales tax loophole on online spending and search. Using online shopping data, sales taxes, and Amazon’s staggered sales tax collection, I estimate that household price elasticity is −1.9, implying a 13% decline in Amazon’s revenues upon sales tax collection. After Amazon collects sales taxes, households increase their spending on Amazon’s taxed competitors, but not its untaxed competitors. I find no evidence that households change their browsing or shift their spending offline. Collecting sales taxes online will help governments recapture lost taxes and increase online competition, but will not shift customers back offline.
    Keywords: sales tax; online shopping; e-commerce; Amazon; retail
    JEL: D12 H31 H71 L81 M38
    Date: 2020–08–26
  27. By: John Kiff; Jihad Alwazir; Sonja Davidovic; Aquiles Farias; Ashraf Khan; Tanai Khiaonarong; Majid Malaika; Hunter K Monroe; Nobu Sugimoto; Hervé Tourpe; Peter Zhou
    Abstract: This paper examines key considerations around central bank digital currency (CBDC) for use by the general public, based on a comprehensive review of recent research, central bank experiments, and ongoing discussions among stakeholders. It looks at the reasons why central banks are exploring retail CBDC issuance, policy and design considerations; legal, governance and regulatory perspectives; plus cybersecurity and other risk considerations. This paper makes a contribution to the CBDC literature by suggesting a structured framework to organize discussions on whether or not to issue CBDC, with an operational focus and a project management perspective.
    Date: 2020–06–26
  28. By: Filomena Garcia; Muxin Li
    Abstract: In this paper we study the effects of the introduction of a new two sided platform endowed with artificial intelligence in a market where a firm provides a brick and mortar platform to buyers and sellers. In our theoretical model we show that the decision of whether to introduce the new platform depends on the reduction of the search cost for the consumers. We also show that the introduction of the platform enlarges the market with more consumers using both platforms. Finally we study the welfare effect of the introduction of the platform opening the discussion on whether certain artificial intelligence devices for shopping should be regulated.
    Keywords: e-Commerce; Intermediary; Two-sided markets
    JEL: L1 L2 L8
    Date: 2020–04
  29. By: Rakesh Shrivastava
    Abstract: Information Technology has occupied substantial space in our day to day life and in running of businesses. How does society regulate I T providers especially when they operate across the globe, beyond the control of nation-states. How do we balance rewarding tech companies for their innovation, and possibility of unfair exploitation, particularly where I T services are ‘free’. ‘Free’ services are ‘paid’ by consumers by their time, attention and data. This paper examines possibility of promoting use of Cloud computing technology Platform as a Service (PaaS) by regulators as a means to catalyse competition and curb monopolistic power of I T service-providers Key Words: PaaS, Laws for Cloud Computing, I T monopolies, Anti-trust in Infotech. Policy
    Date: 2020–06
  30. By: Mathieu Marcoux (Université de Montréal, CIREQ)
    Abstract: To shed light on the limited success of competition enhancing policies in mobile telecommunications, I estimate a game of transceivers’ locations between national incumbents and a new entrant in Canada. I recover player-specific unobserved heterogeneity from bids for spectrum licenses to address the unavailability of regressors required to identify incumbents’ responses to the new entrant’s decisions. I find that incumbents benefitting from important economies of density is a plausible explanation for policies’ drawbacks. I then evaluate the equilibrium effect of subsidizing the new entrant’s transceivers and find that this alternative proposition increases its investments while only slightly modifying incumbents.
    Keywords: multiple equilibria, unobserved heterogeneity, empirical games, telecommunications
    JEL: C57 L11
    Date: 2019–02
  31. By: Sonoo Thadaney Israni; Michael E. Matheny; Ryan Matlow; Danielle Whicher
    Abstract: In this supplement, Giovanelli et al. see the hope and promise of carefully leveraging AI to support adolescent health, underscoring the need for multidisciplinary developmental science teams with expertise in cognitive development, medicine, psychology, computer science, and medical informatics.
    Keywords: artificial intelligence, Adolescent health
  32. By: Satyajit Chatterjee; Dean Corbae; Kyle P. Dempsey; José-Víctor Ríos-Rull
    Abstract: What is the role of credit scores in credit markets? We argue that it is a stand in for a market assessment of a person’s unobservable type (which here we take to be patience). We pose a model of persistent hidden types where observable actions shape the public assessment of a person’s type via Bayesian updating. We show how dynamic reputation can incentivize repayment without monetary costs of default beyond the administrative cost of filing for bankruptcy. Importantly we show how an economy with credit scores implements the same equilibrium allocation. We estimate the model using both credit market data and the evolution of individual’s credit scores. We find a 3% difference in patience in almost equally sized groups in the population with significant turnover and a shift towards becoming more patient with age. If tracking of individual credit actions is outlawed, the benefits of bankruptcy forgiveness are outweighed by the higher interest rates associated with lower incentives to repay.
    JEL: D82 E21
    Date: 2020–08
  33. By: Elias Carroni; Giuseppe Pignataro; Alessandro Tampieri
    Abstract: We study a context in which a seller can increase the perceived value of her product by a costly manipulative action, and buyers’ collective learning can contrast the seller’s manipulation. Each buyer needs to face documentation (effort) costs to understand product value. A buyer alone is never willing to face the cost of effort, as her documentation activity has no impact on the seller’s choices. The intermediation of a platform induces the buyers to exert effort, thereby reducing manipulation. The platform can direct the learning activity by developing a peer-review system or only allowing for individual learning. The choice between the two environments depends on (i) the precisions of the signals that each buyer receives and (ii) the manipulative ability of the seller.
    Keywords: Manipulation, Private Information, Online Marketplace, Bayesian Learning, In- formation Acquisition, Peer-Review.
    JEL: D42 D82 D83 L13 M37
    Date: 2020
  34. By: Ozili, Peterson K
    Abstract: This paper provides a comprehensive review of the recent evidence on financial inclusion from all regions of the World. It identifies the emerging themes in the financial inclusion literature as well as some controversy in policy circles regarding financial inclusion. In particular, I draw attention to some issues such as optimal financial inclusion, extreme financial inclusion, how financial inclusion can transmit systemic risk to the formal financial sector, and whether financial inclusion and exclusion are pro-cyclical with changes in the economic cycle. The key findings in this review indicate that financial inclusion affects, and is influenced by, the level of financial innovation, poverty levels, the stability of the financial sector, the state of the economy, financial literacy, and regulatory frameworks which differ across countries. Finally, the issues discussed in this paper opens up several avenues for future research
    Keywords: financial inclusion, financial technology, digital finance, poverty reduction, financial stability, financial institutions, economic cycle, systemic risk, controversy, Fintech.
    JEL: O12 O16 O17 O19 R2
    Date: 2020
  35. By: Viral V. Acharya; Sascha Steffen
    Abstract: Data on firm-loan-level daily credit line drawdowns in the United States expose a corporate “dash for cash” induced by the COVID-19 pandemic. In the first phase of the crisis, which was characterized by extreme precaution and heightened aggregate risk, all firms drew down bank credit lines and raised cash levels. In the second phase, which followed the adoption of stabilization policies, only the highest-rated firms switched to capital markets to raise cash. Consistent with the risk of becoming a fallen angel, the lowest-quality BBB-rated firms behaved more similarly to non-investment grade firms. The observed corporate behavior reveals the significant impact of credit risk on corporate cash holdings.
    JEL: G01 G14 G32 G35
    Date: 2020–07

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.