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on Payment Systems and Financial Technology |
| By: | Abdoulaye Ndiaye |
| Abstract: | Blockchains, the technology underlying cryptocurrencies, face large fluctuations in user demand and marginal costs. These fluctuations make effective fee policies necessary to manage transaction service allocation. This paper models the conflict between the blockchain designer and validators with monopoly power in choosing between price-setting and quantity-setting fee policies. The key determinants of the advantage of price-setting on blockchains are the validators’ bargaining power, the elasticity of demand, the validators’ uncertainty about demand, and the covariance of demand and marginal costs. My results help account for differences between the fee policy designs of Bitcoin and Ethereum, the leading blockchains, and have implications for how they can be improved. |
| Keywords: | blockchain, transaction costs, fee policies, Bitcoin, Ethereum, demand fluctuations, price elasticity |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11274 |
| By: | Thomadakis, Apostolos; Lannoo, Karel; Shamsfakhr, Farzaneh |
| Abstract: | A new study highlights that to ensure widespread adoption, the digital euro must offer a compelling value proposition and clear benefits to consumers and merchants in the EU, while the EU’s legislative framework should allow for these benefits to gradually emerge over time. There is a need to minimise the risk of crowding out European private solutions, which would impact competition and the attractiveness of the European payments market, while at the same time hinder the digital euro’s adoption. Formed in April 2023, a CEPS-ECMI-ECRI Round Table brought together a working group of market operators and infrastructure providers, central bank representatives, regulators, and academics to take part in research and in-depth discussions over a six-month period. Prior to deciding whether to proceed with the digital euro project, the study argues that: The benefits of an eventual digital euro and its added value for end users (i.e. individuals, merchants and businesses), compared with existing payment solutions, should be crystal clear, well understood and clearly communicated. The digital euro should be cost efficient, economically viable and contribute to making payments – and ultimately the European economy – more competitive. The effectiveness of holding limits should be better justified and explained. If a decision is made to proceed with the digital euro project, our study proposes approaching it as follows: Start with a digital euro that is as simple as possible and includes only the most basic functionalities. Rely on and build upon existing mechanisms in the payment infrastructure as much as possible and take full advantage of current service processes. Establish a regulatory framework that ensures a level playing field for the payment ecosystem, between providers and between currencies (public and private money). Finally, so as not to impact the euro’s attractiveness as a means of payment relative to other major currencies, decisions on the digital euro (either a retail or wholesale one) cannot be taken in isolation from central bank digital currency developments in other major jurisdictions. |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:eps:cepswp:41185 |
| By: | Wooyong Jo; Mike Lewis; Yanwen Wang |
| Abstract: | Social media platforms have led to online consumption communities, or fandoms, that involve complex networks of ancillary creators and consumers focused on some core product or intellectual property. For example, video game communities include networks of players and content creators centered around a specific video game. These networks are complex in that video game publishers often sponsor creators, but creators and publishers may have divergent incentives. Specifically, creators can potentially benefit from content that builds their own following at the expense of the core game. Our research investigates the relationship between consuming live-streamed content and engagement with a specific video game. We examine the causal effect of viewing live-streamed content on subsequent gameplay for a specific game, using an unexpected service interruption of the livestreaming platform and time zone differences among users. We find live-streamed content significantly increases gameplay as a 10% increase in live-streamed viewing minutes results in a 3.08% increase in gameplay minutes. We also explore how this effect varies by user loyalty to different types of streamer channels (firm-owned, mega, and micro). The positive effects of live-streamed content are greatest for micro-streamers and smallest for mega-streamers. These findings are salient for firms allocating sponsorship resources. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.01103 |
| By: | Ivan Radanovic (National Bank of Serbia) |
| Abstract: | The goal of this paper is to analyse the concepts of open banking and open finance as data sharing models in banking and financial industry. A key idea behind these concepts is to enhance competition among payment service providers, ensure greater transparency of their work, expand the range of choices for consumers and, most of all, add value for the final consumer by improving the quality and reducing the price of services. In Europe, service providers from several European Union countries (Germany, the Netherlands, and Sweden – Sofortüberweisung, iDeal and Trustly) became the key drivers of data sharing models, prompting the European Union to regulate this new type of payment services in order to improve competition in the payment services market and ensure better consumer protection. The Payment Services Directive 2 (PSD2) 2015/2366 was thus adopted, requiring banks to allow access to customer information to all third-party providers such as payment institutions, e-money institutions, FinTech companies and other credit institutions, subject to customer’s consent. PSD2 recognises two new types of non-banking market participants – account information service providers (AISP) and payment initiation service providers (PISP). The paper combines the descriptive and comparative methods, as well as the case-study method, to give an outline of important data sharing regulations and models, and of the abovementioned payment service providers. The paper also looks into the experience of applying open banking and open finances in the United Kingdom and Brazil. The final section of the paper deals with institutional assumptions for developing the data sharing model in the Republic of Serbia. The current Law on Payment Services (RS Official Gazette, Nos 139/2014 and 44/2018) is largely harmonised with PSD2, as the original Payment Services Directive 2007/64 was fully transposed into the national legislation. Full harmonisation with PSD2 has been achieved through amendments to the Law on Payment Services (RS Official Gazette, No 64/2024) of 31 July 2024, which lay down measures to further enhance competition, innovation and the range of choices for the end-consumer. This Law will be applied as of 6 May 2025. Among other things, open banking will be introduced, as will the domestic equivalents to AISP and PISP participants. |
| Keywords: | data, open banking, open finance, payment initiation, account information, Law on Payment Services |
| JEL: | E42 G15 G21 G28 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nsb:bilten:24 |
| By: | Ng Hui Chen (Asia Pacific University of Technology & Innovation Jalan Teknologi 5, Taman Teknologi Malaysia, 57000 Kuala Lumpur, Malaysia Author-2-Name: Muzafar Shah Habibullah Author-2-Workplace-Name: "Putra Business School Level 3, Office Building of the Deputy Vice-Chancellor (Research & Innovation) 43400, UPM 43400 Seri Kembangan, Selangor, Malaysia. " Author-3-Name: Resul Sapar Author-3-Workplace-Name: "Putra Business School Level 3, Office Building of the Deputy Vice-Chancellor (Research & Innovation) 43400, UPM 43400 Seri Kembangan, Selangor, Malaysia. " Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | "Objective - The COVID-19 pandemic has significantly transformed many aspects of daily life, including the way payments are made. While the usage of cashless payments has increased, cash remains the main mode of payment in Malaysia. Therefore, this study aims to explore the factors driving the intention to use FinTech payments based on the Unified Theory of Acceptance and Use of Technology (UTAUT) with the Value-based Adoption Model (VAM). Methodology/Technique - 546 usable responses were collected using a stratified sampling technique across 13 states in Malaysia. Then, structural equation modeling using the partial least squares approach was applied to test the hypotheses. Finding - The findings show that performance expectancy, effort expectancy, social benefit, privacy risk, and openness to change are the significant determinants of intention to use FinTech payments. Openness to change was found to be the most significant predictor of intention to use FinTech payments. However, the study failed to confirm the impact of social influence, economic benefit, security risk, and regulatory support on the intention to use FinTech payments. This study does not fully validate the significance of UTAUT and VAM constructs. Novelty - To the best of our knowledge, this is the first study that uses the UTAUT and VAM on intention to use FinTech payments together with openness to change and regulatory support. This is a framework that covers the decision-making determinants from the perspectives of benefits, risks, individual characteristics, and the external environment. Type of Paper - Empirical" |
| Keywords: | FinTech Payment, Intention to Use, UTAUT, VAM, Benefits, Risks |
| JEL: | G23 G28 G29 |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:gjbssr651 |
| By: | Ariston Karagiorgis; Antonis Ballis; Konstantinos Drakos |
| Abstract: | We examine how skewness interacts with kurtosis within the cryptocurrency market. We show that during the COVID-19 pandemic there are more clusters of observations around the two flanks, highlighting the presence of a volatile behavior. Moreover, we document the evolvement of the interrelationship as the pandemic progresses, identifying the domination of the extremes. Our findings advance the thinking that by exploiting the interrelationship between the two higher moments of cryptocurrencies, investors and researchers can have in their arsenal an additional analytic tool. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.12801 |
| By: | Diaz, Adriano |
| Abstract: | Deflation represents an increase in consumer wealth through postponed consumption decisions. State-imposed "monetary policies" not only expropriate this increase in wealth attributed to deflation (a fiscal motive) but also penalize consumers for postponing their consumption of goods and services (a form of social engineering). Consequently, there is a shortfall in the state's legal frameworks adequately protecting consumer freedom and property rights. In response, the Bitcoin network has emerged as a private currency governed by a distinct legal framework rooted in proof-of-work. Consumers holding Bitcoin benefit from the economic advantages of global deflation-advantages often usurped by central banks-and experience enhanced freedom to delay consumption, navigating their life paths free from the constraints of social engineering. Thus, Bitcoin contributes value by addressing the shortfall in state legal systems that safeguard consumer freedom and property rights |
| Date: | 2024–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:5dv9s |
| By: | Quechen Yang |
| Abstract: | With the increasing maturity and expansion of the cryptocurrency market, understanding and predicting its price fluctuations has become an important issue in the field of financial engineering. This article introduces an innovative Genetic Algorithm-generated Alpha Sentiment (GAS) blending ensemble model specifically designed to predict Bitcoin market trends. The model integrates advanced ensemble learning methods, feature selection algorithms, and in-depth sentiment analysis to effectively capture the complexity and variability of daily Bitcoin trading data. The GAS framework combines 34 Alpha factors with 8 news economic sentiment factors to provide deep insights into Bitcoin price fluctuations by accurately analyzing market sentiment and technical indicators. The core of this study is using a stacked model (including LightGBM, XGBoost, and Random Forest Classifier) for trend prediction which demonstrates excellent performance in traditional buy-and-hold strategies. In addition, this article also explores the effectiveness of using genetic algorithms to automate alpha factor construction as well as enhancing predictive models through sentiment analysis. Experimental results show that the GAS model performs competitively in daily Bitcoin trend prediction especially when analyzing highly volatile financial assets with rich data. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.03035 |
| By: | Hugo Inzirillo |
| Abstract: | We propose a new way of building portfolios of cryptocurrencies that provide good diversification properties to investors. First, we seek to filter these digital assets by creating some clusters based on their path signature. The goal is to identify similar patterns in the behavior of these highly volatile assets. Once such clusters have been built, we propose "optimal" portfolios by comparing the performances of such portfolios to a universe of unfiltered digital assets. Our intuition is that clustering based on path signatures will make it easier to capture the main trends and features of a group of cryptocurrencies, and allow parsimonious portfolios that reduce excessive transaction fees. Empirically, our assumptions seem to be satisfied. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.23297 |
| By: | Ivan Radanovic (National Bank of Serbia) |
| Abstract: | The paper aims to analyse the projects of payment systems migration from the current ISO 15022 to the new ISO 20022 standard globally and in Serbia. One of the main project objectives is to facilitate cross-border payments, still largely characterised by high costs, low speed and insufficient transparency. This objective has been acknowledged globally as testified by the G20 roadmap designed in October 2020. National central banks are implementing their own migration projects based on keeping up with good practices and operating in accordance with the most up-to-date standards. The National Bank of Serbia also aims to achieve the compatibility required for potential connection with other payment systems (e.g. TARGET services of the European Central Bank) and connection to the SEPA geographical scope. New electronic messages are up to three times larger and structured in a way to offer greater flexibility, accommodation to economic conjuncture and complex requirements of AML/CFT, KYC, fraud prevention regulations, and the possibility for an almost one hundred percent straight-through processing rate. The analysis combines descriptive, comparative and case study methods to present in detail the characteristics of payments systems as the fundamental public infrastructure, payment trends, as well as the phenomenon of the electronic messaging standard and the XML pattern as the syntactic basis of the ISO 20022 standard. The paper also looks into the experiences of international payment systems and their operators, migration methods in the SWIFT network, as well as the work of the SWIFT central service for translation of ?? and ?? messages. Potential characteristics of the future software platform of the National Bank of Serbia for the NBS RTGS and NBS Clearing payment systems are also discussed in the paper. Payment systems migration will be completed in November 2025. As for the SWIFT network, the coexistence period started in March 2023 when messaging was possible under both standards. The NBS, as the operator of the payment systems which will switch to the new messaging format, will enable the coexistence of two messaging formats until the end of 2024 as one of the measures for ensuring the continuity of their work. |
| Keywords: | migration, ISO 20022 standard, electronic messages |
| JEL: | F30 F33 G20 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:nsb:bilten:20 |
| By: | Athey, Susan (Stanford U); Castillo, Juan Camilo (U of Pennsylvania); Chandar, Bharat (Stanford U) |
| Abstract: | The rise of marketplaces for goods and services has led to changes in the mechanisms used to ensure high quality. We analyze this phenomenon in the Uber market, where the system of pre-screening that prevailed in the taxi industry has been diminished in favor of (automated) quality measurement, reviews, and incentives. This shift allows greater flexibility in the workforce but its net effect on quality is unclear. Using telematics data as an objective quality outcome, we show that UberX drivers provide better quality than UberTaxi drivers, controlling for all observables of the ride. We then explore whether this difference is driven by incentives, nudges, and information. We show that riders’ preferences shape driving behavior. We also find that drivers respond to both user preferences and nudges, such as notifications when ratings fall below a threshold. Finally, we show that informing drivers about their past behavior increases quality, especially for low-performing drivers. |
| JEL: | D83 L91 O33 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:3894 |
| By: | Laila Refiana Said (Lambung Mangkurat University, Indonesia Author-2-Name: Muhammad Dafa Rayyandi Aham Author-2-Workplace-Name: Lambung Mangkurat University, Indonesia Author-3-Name: Yanuar Bachtiar Author-3-Workplace-Name: Sekolah Tinggi Ilmu Ekonomi Indonesia Banjarmasin, Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | "Objective - The present study examines the impact of Trust, the Need for Arousal, and Materialism on Online Impulsive Buying Behavior. Additionally, an examination was conducted to determine if there existed any disparity in impulsive purchasing behavior between users of Tokopedia and Shopee, two of the most fiercely competitive online marketplaces in Indonesia, which made impulsive purchases. Methodology/Technique - The study collected empirical data from a sample of 192 Tokopedia and 192 users of Shopee. The questionnaires were disseminated using Google Forms. Multiple regression analysis and ANCOVA approaches were employed to examine the dataset using the SPSS program. Findings - The study indicated a favorable relationship between the Need for Arousal and Materialism and Online Impulsive Buying Behavior. However, it was found that Trust had no significant impact on Impulsive Buying Behavior. The ANCOVA analysis revealed no statistically significant distinction between Tokopedia and Shopee users. Novelty - The findings of this study provide substantial and relevant insights that contribute to the existing body of research on impulsive consumer behavior and the online marketplace industry. This study proposes enhanced ways to foster marketplaces, particularly in managing impulsive purchases, by analyzing the influence of Trust, the Need for Arousal, and Materialism. Type of Paper - Empirical" |
| Keywords: | ANCOVA, impulsive buying, materialism, need for arousal, trust. |
| JEL: | M31 M37 M39 |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jmmr337 |
| By: | Ali Elahi; Fatemeh Taghvaei |
| Abstract: | Predicting financial markets and stock price movements requires analyzing a company's performance, historic price movements, industry-specific events alongside the influence of human factors such as social media and press coverage. We assume that financial reports (such as income statements, balance sheets, and cash flow statements), historical price data, and recent news articles can collectively represent aforementioned factors. We combine financial data in tabular format with textual news articles and employ pre-trained Large Language Models (LLMs) to predict market movements. Recent research in LLMs has demonstrated that they are able to perform both tabular and text classification tasks, making them our primary model to classify the multi-modal data. We utilize retrieval augmentation techniques to retrieve and attach relevant chunks of news articles to financial metrics related to a company and prompt the LLMs in zero, two, and four-shot settings. Our dataset contains news articles collected from different sources, historic stock price, and financial report data for 20 companies with the highest trading volume across different industries in the stock market. We utilized recently released language models for our LLM-based classifier, including GPT- 3 and 4, and LLaMA- 2 and 3 models. We introduce an LLM-based classifier capable of performing classification tasks using combination of tabular (structured) and textual (unstructured) data. By using this model, we predicted the movement of a given stock's price in our dataset with a weighted F1-score of 58.5% and 59.1% and Matthews Correlation Coefficient of 0.175 for both 3-month and 6-month periods. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.01368 |
| By: | Bareis, jascha |
| Abstract: | This paper reconstructs how chatbots based on Large language models (LLMs) like ‘ChatGPT’ got hyped into being. It dissects the actors and dynamics that triggered, fueled and disseminated the hype. Through the lens of hype studies the paper interrogates three empirical realms: 1. Company websites where the chatbots are presented, 2. Blog entries and newspaper interviews by prominent tech figures from the Silicon Valley, and 3. New York Times articles in the timespan between November 2022 and August 2024. The paper shows how the chatbot hype is driven by a dynamic between privileged actors (hypers) and a media frenzy both influencing and being carried by society and politics alike. Different interdependent building blocks in the chatbot hype construction are identified: 1. Depicting Large Language Model (LLM) chatbots as knowledge models, 2. Entertaining the uncanny and manipulative side of chatbots, 3. Staging a spectacle of competition between tech giants, and 4. Praising the dualism of doomsday apocalypse or a tech-religious calling for a promised future. The paper unravels the core circulated narrative that turns the hype into a powerful societal phenomenon. |
| Date: | 2024–10–29 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:jzde2 |