nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2020‒12‒07
sixteen papers chosen by

  1. Monetizing Privacy with Central Bank Digital Currencies By Rod Garratt; Michael Junho Lee
  2. Central Bank Digital Currency: A Literature Review By Francesca Carapella; Jean Flemming
  3. Blockchain and Institutions (I): trust and (de)centralization By Plinio Limata
  5. Blockchain and Institutions (II): The Realm of Law By Plinio Limata
  6. Visa Acquiring Plaid: A Tartan over a Killer Acquisition? Reflections on the risks of harming competition through the acquisition of startups within digital ecosystems By Frédéric Marty; Thierry Warin
  7. Monetary Policy with Reserves and CBDC: Optimality, Equivalence, and Politics By Dirk Niepelt
  8. A multisided value proposition canvas By Belleflamme, Paul; Neysen, Nicolas
  9. Digital Solutions in a Time of Crisis By World Bank
  10. Four Phases in the History of Money By Luis Angeles
  11. Diagnostic of ID Systems in Tunisia By World Bank
  12. The tension between market shares and profit under platform competition By Belleflamme, Paul; Peitz, Martin; Toulemonde, Eric
  13. A Mixed-Method Landscape Analysis of SME-focused B2B Platforms in Germany By Tina Krell; Fabian Braesemann; Fabian Stephany; Nicolas Friederici; Philip Meier
  14. Promoting E-Commerce in Georgia By Marie Christine Apedo-Amah; Aidan Coville; Caio Piza; Siddhartha Raja; Raquel Scarpari
  15. What determines Initial Coin Offering success: A cross-country study By Muhammad Farooq AHMAD; Oskar KOWALEWSKI; Pawel PISANY
  16. The Effects of the COVID-19 Shutdown on the Consumer Credit Card Market: Revolvers versus Transactors By Robert M. Adams; Vitaly M. Bord

  1. By: Rod Garratt; Michael Junho Lee
    Abstract: In prior research, we documented evidence suggesting that digital payment adoptions have accelerated as a result of the COVID-19 pandemic. While digitalization of payment activity improves data utilization by firms, it can also infringe upon consumers’ right to privacy. Drawing from a recent paper, this blog post explains how payment data acquired by firms impacts market structure and consumer welfare. Then, we discuss the implications of introducing a central bank digital currency (CBDC) that offers consumers a low-cost, privacy-preserving electronic means of payment—essentially, digital cash.
    Keywords: central bank digital currencies; privacy; market structure; data
    JEL: D14 G2 E5
    Date: 2020–11–23
  2. By: Francesca Carapella; Jean Flemming
    Abstract: Technological advances in recent years have led to a growing number of fast, electronic means of payment available to consumers for everyday transactions, raising questions for policymakers about the role of the public sector in providing a digital payment instrument for the modern economy. From a theoretical standpoint, the introduction of a central bank digital currency (CBDC) raises long-standing questions relating to the provision of public and private money (Gurley and Shaw 1960), and the ability of the central bank to use CBDC as a means for transmitting monetary policy directly to households (Tobin 1985).
    Date: 2020–11–09
  3. By: Plinio Limata (LUMSA University)
    Abstract: It has been argued that the adoption of the blockchain technology may lead to the disruption of many current institutions such as markets, property rights, public registries, and so on. The academic literature exploring the potential institutional applications of blockchain technologies is in its infancy but is proliferating. This literature review focuses on certain institutional critical aspects of the blockchain. Trust and (de)centralization are pivotal to the functioning of markets and society in general; blockchain promises to profoundly transform both and their correlated institutions. Technology and behaviors have a reciprocal influence. Results show several issues that must not be underestimated to develop the applications of the blockchain properly, and therefore reach shared benefits and avoid unintentional negative impacts at both micro (individual) and macro (societal) level.
    Keywords: blockchain, trust, decentralized governance
    JEL: A13 D26 P48 O33
    Date: 2020–11
  4. By: Hoang, Ha
    Abstract: Mobile banking is an important component of the cashless economy, it helps to improve efficiency and increase the satisfaction of users of banking services in a digital age. This study explores the factors that influence the using of MB services by analyzing data collected from customers who have used MB in Danang City. A research framework has been developed through the extension of the UTAUT adding Perceived Risk and Trust. The results showed that three out of six groups of research factors have been shown to have a strong impact on customers' MB usage. The factors "Favorable conditions", "Efficiency", "Trust" explain about 43.4% of customers' MB usage.
    Date: 2019–12–14
  5. By: Plinio Limata (LUMSA University)
    Abstract: Blockchains promise to bring disruptive changes at several levels well beyond the realm of cryptocurrencies, in which they were first deployed; centralized institutions are challenged. The present survey focuses on the potential frictions between the application of blockchain technologies and the realm of law. Several subtopics are highlighted as problematic. Findings show that the current state of the art does not sufficiently support the blockchain’s implementation on a societal level. Shortcomings and confusion among legal and economic concepts are highlighted to be addressed, and therefore clarity and uniformity are needed to ensure the benefits that may derive from the application of this technology.
    Keywords: Blockchain; Law; Regulation; Smart Contract; Property
    JEL: D23 K10 K11 P14
    Date: 2020–11
  6. By: Frédéric Marty; Thierry Warin
    Abstract: The applicability of the notion of killer acquisition to digital platforms has long been debated. The case of the proceedings brought by the U.S. DoJ against Visa is even more interesting insofar as it makes it possible to illustrate and discuss its different facets ranging from the notion of competition suppression to that of consolidation and extension of the dominant position. The complaint analysis also makes it possible to question inter-digital ecosystem competition and shed light on the issues related to the monitoring of acquisitions undertaken by dominant companies in the sector.
    Keywords: Mergers Control,Killer Acquisitions,Digital Ecosystems,Foreclosure,Damage to Innovation,
    JEL: L12 L25 L41 L86
    Date: 2020–11–26
  7. By: Dirk Niepelt
    Abstract: We analyze policy in a two-tiered monetary system. Noncompetitive banks issue deposits while the central bank issues reserves and a retail CBDC. Monies di er with respect to operating costs and liquidity. We map the framework into a baseline business cycle model with "pseudo wedges" and derive optimal policy rules: Spreads satisfy modified Friedman rules and deposits must be taxed or subsidized. We generalize the Brunnermeier and Niepelt (2019) result on the macro irrelevance of CBDC but show that a deposit based payment system requires higher taxes. The model implies annual implicit subsidies to U.S. banks of up to 0.8 percent of GDP during the period 1999-2017.
    Keywords: Reserves, deposits, central bank digital currency, monetary policy, Friedman rule, equivalence, Ramsey policy, bank pro ts, money creation
    JEL: E42 E43 E51 E52
    Date: 2020–11
  8. By: Belleflamme, Paul (Université catholique de Louvain, LIDAM/CORE, Belgium); Neysen, Nicolas
    Abstract: Operators of digital platforms have to convince potential users that their intermediation and matchmaking services bring additional value in the market. To do so, they need to formulate a strong value proposition, which convinces users that joining the platform brings them larger value than staying out. In recent years, a number of frameworks have been developed to help entrepreneurs reflect on which elements should be included (or not) in their value proposition. In this paper, we argue that such tools do not necessarily offer a satisfactory answer, as they miss the specificities of platform-based business models. Hence, we propose an alternative tool that overcomes the limitations we identified and is more appropriate for nascent multisided platforms.
    Keywords: Value Proposition, Strategy Canvas, Multisided Platforms
    Date: 2020–08–26
  9. By: World Bank
    Keywords: Health, Nutrition and Population - Disease Control & Prevention Health, Nutrition and Population - Public Health Promotion Information and Communication Technologies - Digital Divide Information and Communication Technologies - ICT Policy and Strategies Macroeconomics and Economic Growth - Economic Growth Macroeconomics and Economic Growth - Fiscal & Monetary Policy
    Date: 2020–07
  10. By: Luis Angeles
    Abstract: The history of money can be characterized into four major phases, from the earliest written records during the 3rd millennium BC to the present day. This characterization sheds light on both the nature and the evolution of money, and helps us to understand today’s monetary arrangements. Money evolves over time as the preferred means of payment shift from metal to coinage and from coinage to different forms of debt, and as the unit of account becomes more or less linked to the value of a commodity, in particular gold or silver.
    JEL: E51 E58 G21
    Date: 2020–11
  11. By: World Bank
    Keywords: Information and Communication Technologies - ICT Applications Information and Communication Technologies - ICT Policy and Strategies Information and Communication Technologies - Information Security & Privacy Information and Communication Technologies - Information and Records Management Social Protections and Labor - Social Protections & Assistance
    Date: 2020–08
  12. By: Belleflamme, Paul (Université catholique de Louvain, LIDAM/CORE, Belgium); Peitz, Martin; Toulemonde, Eric
    Abstract: We introduce asymmetries across platforms in the linear model of competing two-sided platforms with singlehoming on both sides and fully characterize the price equilibrium. We identify market environments in which one platform has a larger market share on both sides while obtaining a lower profit than the other platform. This platform enjoys a competitive advantage on one or both sides. Our finding raises further doubts on using market shares as a measure of market power in platform markets.
    Keywords: Two-sided platforms, market share, market power, oligopoly, network effects, antitrust
    JEL: D43 L13 L86
    Date: 2020–08–01
  13. By: Tina Krell; Fabian Braesemann; Fabian Stephany; Nicolas Friederici; Philip Meier
    Abstract: Digital platforms offer vast potential for increased value creation and innovation, especially through cross-organizational data sharing. It appears that SMEs in Germany are currently hesitant or unable to create their own platforms. To get a holistic overview of the structure of the German SME-focused platform landscape (that is platforms that are led by or targeting SMEs), we applied a mixed method approach of traditional desk research and a quantitative analysis. The study identified large geographical disparity along the borders of the new and old German federal states, and overall fewer platform ventures by SMEs, rather than large companies and startups. Platform ventures for SMEs are more likely set up as partnerships. We indicate that high capital intensity might be a reason for that.
    Date: 2020–11
  14. By: Marie Christine Apedo-Amah; Aidan Coville; Caio Piza; Siddhartha Raja; Raquel Scarpari
    Keywords: Information and Communication Technologies - ICT Applications Information and Communication Technologies - Information Technology Private Sector Development - E-Commerce
    Date: 2020–07
  15. By: Muhammad Farooq AHMAD (SKEMA Business School – Université Côte d’Azur, Lille, France); Oskar KOWALEWSKI (IESEG School of Management, Paris, France; LEM-CNRS 9221, Lille, France; Institute of Economics, Polish Academy of Sciences, Warsaw, Poland); Pawel PISANY (Institute of Economics, Polish Academy of Sciences, Warsaw, Poland)
    Abstract: We investigate the determinants of ICO campaigns' presence and success using data on 503 initial coin offerings (ICOs) from 60 countries that took place between 2015 and 2018. We took individual project perspective and country-wide perspective into account. Our findings show that expert ratings, insider retention, and resource-related signals, such as the number of team members and advisors, contribute positively to ICO funding success and post-ICO activity. Conversely, organizing presale and bonuses contribute negatively. Moreover, we established that countries' financial system development and ICO-related legal certainty boost the crypto-market. More importantly, we also document that countries' cultures foster ICO market development.
    Keywords: Initial Coin Offering, corporate finance, innovation, entrepreneurship
    JEL: G10 L26 M13 O30
    Date: 2020–11
  16. By: Robert M. Adams; Vitaly M. Bord
    Abstract: The consumer credit card market has experienced dramatic, unprecedented changes in the wake of the COVID-19 shutdown of the U.S. economy. Revolving credit in the G.19 Consumer Credit statistical release fell by an annualized rate of 32 percent in the second quarter of 2020.
    Date: 2020–10–21

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