nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2022‒09‒19
fifteen papers chosen by

  1. The Journey of a Remittance in the US-Mexico Corridor: From My Salary to My Family By Batiz-Lazo, Bernardo; González-Correa, Ignacio
  2. A Mixed Duopoly in Interbank Payment Services By Carlos A. Arango-Arango; Yanneth Rocio Betancourt-Garcia
  3. Cash, COVID-19 and the Prospects for a Canadian Digital Dollar By Walter Engert; Kim Huynh
  4. Occasional Bulletin Economic Notes 2201 Policy lessons from global retail Central Bank Digital Currency projects June 2022 By Nic Spearman
  5. A Critical Review of Blockchain Acceptance Models—Blockchain Technology Adoption Frameworks and Applications By Hamed Taherdoost
  6. Platform pricing strategies when consumers web/showroom By Federico Navarra
  7. Internet Addiction; Symptoms, Impacts and Treatments By Hamed Taherdoost
  8. A war in a pandemic-The recent spike in economic uncertainty and the hedging abilities of Bitcoin By Refk Selmi
  9. Empirical Modeling of Customer Satisfaction for E-Services in Cross-Border E-Commerce By Hamed Taherdoost; Mitra Madanchian
  10. Racial platform capitalism: empire, migration and the making of Uber in London By Gebrial, Dalia
  11. Exploring Price Accuracy on Uniswap V3 in Times of Distress By Lioba Heimbach; Eric Schertenleib; Roger Wattenhofer
  12. Consumer Demand with Social Influences: Evidence from an E-Commerce Platform By El Hadi Caoui; Chiara Farronato; John J. Horton; Robert Schultz
  13. Scapegoating and Discrimination in Times of Crisis: Evidence from Airbnb By Michael Luca; Elizaveta Pronkina; Michelangelo Rossi
  14. The Impact of Remittances on Economic Growth: Empirical Evidence from South Africa By Sheilla Nyasha; Nicholas M. Odhiambo
  15. Disruptive innovation and spatial inequality By Kemeny, Tom; Petralia, Sergio; Storper, Michael

  1. By: Batiz-Lazo, Bernardo; González-Correa, Ignacio
    Abstract: We describe cross border payments between families in the US-Mexico corridor including a map of the technological infrastructure.
    Keywords: remittances, fintech, Mexico, USA
    JEL: E42 L81 N2 N8
    Date: 2022–08
  2. By: Carlos A. Arango-Arango (Banco de la Republica de Colombia); Yanneth Rocio Betancourt-Garcia (Banco de la Republica de Colombia)
    Abstract: In this paper, we analyze theoretically the coexistence of two means of payment, such as cash and digital or electronic payments, introducing some distortions in the payments markets to understand the widespread use of cash, specially in emerging countries. Lagos and Wright (2005) theoretical approach allows us to model explicitly the frictions in the exchange process considering money as essential. We introduce in this framework theft and informality (measured by tax evasion) as factors aecting cash usage and competition with a private digital payment platform. Considering heterogeneity in the seller's side by assuming dierent levels of productivity we nd the factors that explain the use of cash or digital payments. If a public provider enters the market with a less expensive platform the fees charged by the private provider have to be adjusted to the cost level of the public platform, decreasing the use of cash in the economy.
    Keywords: Cash; means of payments; payments services; digital payments; instant payments
    JEL: E40 E41 E42 E44
    Date: 2022–08–15
  3. By: Walter Engert; Kim Huynh
    Abstract: We provide an analysis of cash trends in Canada before and during the COVID-19 pandemic. Focusing on the pandemic period, we explore the implications on demand for, use of and access to cash. We find that cash demand has been strong pre-pandemic and increased sharply during the pandemic. While cash use fell initially due to the decreased number of in-person shopping opportunities, it recovered as containment measures eased. We explore the potential two scenarios for issuance of central bank digital currency or Canadian digital dollar. We discuss the Canadian experience in maintaining cash as an efficient and accessible method of payment and store of value.
    Keywords: Bank notes; Central bank research; Coronavirus disease (COVID-19); Digital currencies and fintech; Econometric and statistical methods
    JEL: C C12 C9 E E4 O O54
    Date: 2022–08
  4. By: Nic Spearman
    Abstract: Occasional Bulletin Economic Notes 2201 Policy lessons from global retail Central Bank Digital Currency projects June 2022
    Date: 2022–06–24
  5. By: Hamed Taherdoost (Hamta Business Corporation)
    Abstract: Blockchain is a promising breakthrough technology that is highly applicable in manifold sectors. The adoption of blockchain technology is accompanied by a range of issues and challenges that make its implementation complicated. To facilitate the successful implementation of blockchain technology, several blockchain adoption frameworks have been developed. However, selecting the appropriate framework based on the conformity of its features with the business sector may be challenging for decision-makers. This study aims to provide a systematic literature review to introduce the adoption frameworks that are most used to assess blockchain adoption and realize business sectors that these models have been applied. Thus, the blockchain adoption models in 56 articles are reviewed and the results of the studies are summarized by categorizing the articles into five main sections including supply chain, industries, financial sector, cryptocurrencies, and other articles (excluded from the former fields). The findings of the study show that the models based on the technology acceptance model (TAM), technology-organization-environment (TOE), and new conceptual frameworks were the focus of the majority of selected articles. Most of the articles have focused on blockchain adoption in different industry fields and supply chain areas.
    Keywords: blockchain technology,acceptance model,adoption model,blockchain adoption,blockchain acceptance,blockchain acceptance model,blockchain acceptance framework,narrative review
    Date: 2022
  6. By: Federico Navarra (University of Padova)
    Abstract: This paper studies the effects of price parity clauses (PPC) on consumer surplus and platform profit by investigating the strategic interactions among horizontally differentiated multi-channel retailers selling through online platforms as well as in their the direct channel. Consumers first choose which product to buy and then in which channel (online/direct) to finalize the purchase; platforms can decide about whether or not to impose PPCs. We show that the direct sales channel constrains platform pricing strategies such that PPCs have ambiguous effects on consumers. From the social welfare perspective, imposing PPCs is desirable when platforms are perceived as highly substitutable. Both platforms imposing price parity is always a Nash equilibrium but under certain conditions it can also arise another Nash equilibrium in which both platforms select an unrestricted pricing regime.
    Keywords: platform competition, price parity clauses, vertical restraints, showrooming, webrooming
    JEL: D43 L13 L42
    Date: 2022–08
  7. By: Hamed Taherdoost (Hamta Group)
    Abstract: The internet as a rich source of information has turned into one of the global necessities. It has provided new opportunities for shopping, entertaining, learning, and social interaction for individuals of all age groups. As of January 2021, 4.66 billion active internet users have been recognized. It means that 59.5 percent of the population is using the Internet globally [1]. Although the prevalence of internet usage has facilitated tasks in many ways and helped to an equal share of information all around the world, it is also becoming problematic in case of being misused and may lead to internet addiction. The rapidly growing epidemy of internet usage can lead to serious long-lasting issues in case of being overlooked. In this study, the particular definition of internet addiction is provided. Then, its determinative and diagnosis factors [2], are offered to help distinguish if an individual is suffering from internet addiction. Also, preventative and remedial approaches are suggested to address the internet addiction problem.
    Date: 2022–02–11
  8. By: Refk Selmi (ESC PAU - Ecole Supérieure de Commerce, Pau Business School)
    Abstract: The ongoing Russian/Ukrainian war, along with sanctions imposed on Russia, poses a major shock to the world economy, merely two years after the COVID-19 pandemic. Accordingly, the global economic policy uncertainty has surged due to the resulting spiraling energy prices and economic disruptions. This paper uses a quantile-on-quantile approach to compare the ability of Bitcoin to hedge the economic policy uncertainty (EPU) of major global Bitcoin exchange markets (China, Japan, Korea and the United States) for the periods prior to and post-the COVID-19 and Russia's invasion of Ukraine. The results reveal that, prior to the pandemic, significant rises in EPU lead to high Bitcoin returns. After the COVID-19 and the recent war in Ukraine, the hedge effectiveness of Bitcoin is weakening due to the tight correlation with stocks in times of rising inflation expectations and the global central banks' hawkish response to it. Moreover, the Bitcoin hedging property is country-specific, and depends to different Bitcoin market conditions and various uncertainty levels. We explain this heterogeneity by differences across countries in terms of the recognition of Bitcoin as a legal tender, the Bitcoin trading volume, the exchange market maturity, and the investors' attitude towards risk.
    Keywords: Bitcoin,the COVID-19,the war in Ukraine,the economic policy uncertainty,hedge,country-specific analysis
    Date: 2022
  9. By: Hamed Taherdoost (Hamta Business Corporation); Mitra Madanchian (Research Club (Research and Development Departement) | Hamta Group)
    Abstract: This paper presents an empirical analysis of significant features of the e-service satisfaction model (ESM) as an important element of a sharing economy. Customer satisfaction is regarded as one determining factor in the success of businesses. Therefore, customer satisfaction is considered one of the most critical features that determine the success of activities conducted by online businesses for cross-border e-commerce. Therefore, companies essentially need to measure the interaction and satisfaction level of their customers to improve the performance of their business. In this study, we employed content validity, exploratory factor analysis, constructive testing, and cluster discrimination to examine the survey instrument and test the e-service satisfaction model (ESM) in the context of e-commerce. To ensure the validation of measurement models and the proposed instruments, structural equation modeling was applied through SPSS AMOS software. According to the results of our study, the presented survey instrument is a strong and reliable tool to create customer interaction in cross-border e-commerce by identifying the various key factors affecting customer satisfaction.
    Keywords: Taherdoost,customer satisfaction,e-commerce satisfaction,e-service satisfaction,e-service satisfaction model (ESM),electronic service (e-service),e-commerce,information management,information system management
    Date: 2021–06–25
  10. By: Gebrial, Dalia
    Abstract: The critical platform studies literature has built a compelling picture of how techniques like worker (mis)classification, algorithmic management and workforce atomisation lie at the heart of how ‘work on-demand via apps’ actively restructure labour. Much of this emerging scholarship identifies that platform workforces are predominantly comprised of migrant and racially minoritised workers. However, few studies theorise migration and race as structuring logics of the platform model and the precarity it engenders. This paper addresses this gap by exploring how the platform economy – specifically work on-demand via apps – both shapes and is shaped by historically contingent contexts of racialisation, and their constitutive processes such as embodiment and immigration policy/rhetoric. Beyond identifying the over-representation of racial minorities in the platform economy, it argues that processes of racialisation have been crucial at every stage of the platform economy's rise to dominance, and therefore constitutes a key organising principle of platform capitalism – hence the term ‘racial platform capitalism’. In doing so, this paper draws on the racial capitalism literature, to situate key platform techniques such as worker (mis)classification and algorithmic management as forms of racial practice, deployed to (re-)organise surplus urban labour-power following the 2008 financial crisis. This framework will be explored through an ethnographic study of Uber's rise in London. Through this, the paper demonstrates a co-constitutive relationship, where the conditions of minoritised workers in a global city like London post-2008, and the political economy of platform companies can be said to have co-produced one another.
    Keywords: Racial capitalism; migration; platform labour; precarity; urbanism; Sage deal
    JEL: R14 J01 J1
    Date: 2022–08–01
  11. By: Lioba Heimbach; Eric Schertenleib; Roger Wattenhofer
    Abstract: Financial markets have evolved over centuries, and exchanges have converged to rely on the order book mechanism for market making. Latency on the blockchain, however, has prevented decentralized exchanges (DEXes) from utilizing the order book mechanism and instead gave rise to the development of market designs that are better suited to a blockchain. Although the first widely popularized DEX, Uniswap V2, stood out through its astonishing simplicity, a recent design overhaul introduced with Uniswap V3 has introduced increasing levels of complexity aiming to increase capital efficiency. In this work, we empirically study the ability of Unsiwap V3 to handle unexpected price shocks. Our analysis finds that the prices on Uniswap V3 were inaccurate during the recent abrupt price drops of two stablecoins: UST and USDT. We identify the lack of agility required of Unsiwap V3 liquidity providers as the root cause of these worrying price inaccuracies. Additionally, we outline that there are too few incentives for liquidity providers to enter liquidity pools, given the elevated volatility in such market conditions.
    Date: 2022–08
  12. By: El Hadi Caoui; Chiara Farronato; John J. Horton; Robert Schultz
    Abstract: For some kinds of goods, rarity itself is valued. "Fashionable'" goods are demanded in part because they are unique. In this paper, we explore the economics of rare goods using auctions of limited-edition shoes held by an e-commerce platform. We model endogenous entry and bidding in multi-unit auctions and construct demand curves from realized bids. We find that doubling inventory reduces willingness to pay by 7-15%. From the producer perspective, ignoring the value of rarity leads to substantial overproduction: auctioned quantities are 82% above the profit-maximizing level. From the consumer perspective however, the negative spillovers of restricting quantity more than offset the benefits of rarer goods.
    JEL: D12 D44 L81
    Date: 2022–08
  13. By: Michael Luca; Elizaveta Pronkina; Michelangelo Rossi
    Abstract: We present evidence that discrimination against Asian-American Airbnb users sharply increased at the start of the COVID-19 pandemic. Using a DiD approach, we find that hosts with distinctively Asian names experienced a 12 percent decline in guests relative to hosts with distinctively White names. In contrast, we do not see spikes in discrimination against Black or Hispanic hosts. Our results suggest that the rise in anti-Asian sentiment in 2020 translated to discrimination in economic activity, highlighting the ways in which scapegoating minority groups can shape markets. Our results also point to the role of platform design choices in enabling discrimination.
    JEL: J15
    Date: 2022–08
  14. By: Sheilla Nyasha; Nicholas M. Odhiambo
    Abstract: In this paper, we have empirically examined the impact of remittances on economic growth in South Africa over the period from 1970-2019. The study was motivated by the conflicting empirical findings that have emerged in the literature on the impact of remittance on economic growth in various countries. The study was also motivated by the need to find an empirical backing on the assertion that remittances are good for economic growth and can play a key role in lowering the inequality levels in developing countries. Using the autoregressive distributed lag (ARDL) bounds testing approach, the empirical results, contrary to expectations, have revealed that in South Africa, remittances have a negative impact on economic growth, irrespective of whether the regression analysis is conducted in the long run, or in the short run. The study, therefore, cautions policy makers when it comes to policies related to harnessing remittances for economic growth. The study argues that it is not only remittance inflows that matter, but also how the remittances are utilised to influence economic growth.
  15. By: Kemeny, Tom; Petralia, Sergio; Storper, Michael
    Abstract: Although technological change is widely credited as driving the last 200 years of economic growth, its role in shaping patterns of inequality remains under-explored. Drawing parallels across two industrial revolutions in the United States, this paper provides new evidence of a relationship between highly disruptive forms of innovation and spatial inequality. Using the universe of patents granted between 1920 and 2010 by the US Patent and Trademark Office (USPTO), we identify disruptive innovations through their rapid growth, complementarity with other innovations and widespread use. We then assign more and less disruptive innovations to subnational regions in the geography of the United States. We document three findings that are new to the literature. First, disruptive innovations exhibit distinctive spatial clustering in phases understood to be those in which industrial revolutions reshape the economy; they are increasingly dispersed in other periods. Second, we discover that the ranks of locations that capture the most disruptive innovation are relatively unstable across industrial revolutions. Third, regression estimates suggest a role for disruptive innovation in regulating overall patterns of spatial output and income inequality.
    Keywords: industrial revolutions; inequality; innovation; regional development; technological change
    JEL: J31 O30 O33 O51
    Date: 2022–07–20

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