Download or read book The Economics of the Payment Card Industry written by David Sparks Evans and published by . This book was released on 1993 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Economics of Credit Cards Debit Cards and ATMs written by and published by Fundacion BBVA. This book was released on with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Market Definition and Market Power in Payment Card Networks written by Eric Emch and published by . This book was released on 2006 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on the Economics of Payment Card Industry written by Chi-Hui Yen and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation consists of three chapters that address important questions in the payment card industry. Chapter 1 provides an overview of the institutional background, and introduces the problem of regressive distributional effects generated from credit card pricing. The regressive distributional effects arise when merchants pass on their costs associated with credit cards to all consumers by raising the retail prices. Since merchants typically do not differentiate prices across payment methods, these additional costs are cross-subsidized by cash and debit users. This induces a regressive transfer from low-income to high-income consumers because credit card usages tend to increase with income. Chapter 1 contributes to the literature by developing a measurement to quantify the regressive transfers made by the consumers to the merchants in a micro level. Using a unique shopping diary data conducted by Bank of Canada in 2013, I show that non-credit card users on average made a regressive transfer that is more than twice of that made by credit card users per transaction. The ratio of regressive transfers to transaction amount also decreases monotonically with income. These results suggest that how consumers choose between payment methods to make transactions have important implications on the distribution of regressive transfers, which motivates a structural estimation on consumer's payment method choices. Chapter 2 constructs a structural model of consumer adoption and usage choices, and uses the parameter estimates to simulate the counterfactual outcomes on the distributions of regressive transfers under various institutional changes. The model is built upon Huynh et al. (2021), which features a two-stage process where consumers first choose which payment bundle to adopt, then choose which payment method to use upon transaction. Heterogeneous preferences across consumer groups are estimated using a discrete-type of consumer demand model. Unlike most of the literature which ignores consumers’ choices between the issuer banks, the model considers consumers’ issuer bank choices among credit cards. Simulation results suggest that the model fits the observed data well, and generate reasonable demand elasticities of consumer usage and adoption probabilities. I conduct three policy experiments using the model estimates: a hypothetical removal of cash, a monopoly setting, and a perfect competition setting in the issuer banks. The results show that the regressive distributional effects are reduced under all three scenarios. Particularly, the monopoly setting has the strongest effects in the redistribution of regressive transfers, where it reduces the per-transaction and per-transaction value regressive transfers made by non-credit card users and low-income consumers, while increases those made by credit card users and high-income consumers. On the other hand, welfare comparisons show that perfect competition renders the highest increase in consumer surplus, while the monopoly setting and removal of cash on average hurt the consumers in terms of consumer surplus. This is the first paper to my knowledge that studies the regressive distributional effects with a structural demand model, and contributes to the literature by investigating the potential outcomes from changes in the market structure of the payment card industry. Chapter 3 builds upon the previous chapters and introduces dynamics into consumer's payment method choices. In particular, I ask how consumer awareness on merchant acceptance affects consumer's adoption and usage choices, and how information diffusion drives the adoption and usage curve over time. I extend the model developed in Chapter 2 by considering consumer awareness that varies between payment methods. Using the parameter estimates, I conduct policy experiments where I introduce a hypothetical new payment instrument in the market, assuming different consumer inform probabilities for existing instruments and the new instrument. Simulation results on post-introduction adoption and usage probabilities show that there is a large impact of consumer awareness on consumers' adoption decisions, with a bigger impact when assuming different inform probabilities for the new instrument. To understand how consumers' adoption and usage decisions change over time when consumer awareness evolves, I borrow the literature of diffusion and simulate a diffusion process of consumer awareness using the Bass Diffusion model (Bass (1969)). The simulation results show that the adoption and usage of new payment instrument exhibits an S-shaped curve after its introduction in the market, where it takes over six years to reach the convergence. Welfare analyses show that consumer surplus initially drops after the introduction, due to the lack of information, and gradually increases when consumers become more informed. This suggests that there is an impactful welfare loss associated with information failure, and it is important for the policy makers to develop measurement that ensures a quick diffusion of information when introducing a new payment method.

Download or read book Payment Card Regulation and the mis application of the Economics of Two sided Markets written by Timothy J. Muris and published by . This book was released on 2006 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book An Introduction to the Economics of Payment Card Networks written by Robert M. Hunt and published by . This book was released on 2019 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: Open payment card networks typically coordinate the activities of thousands of financial institutions that issue cards, millions of retail locations that accept them, and several hundred million consumers that use them. This coordination can include the collective setting of certain prices and other controversial network rules. Such practices have recently come under the scrutiny of antitrust authorities in the U.S. and abroad. This article provides a brief overview of the economics of the payment card industry, explaining some of the differences from the textbook model of competitive markets. Such differences are important factors for the antitrust analysis of payment card networks.

Download or read book The Economics of Payment Card Fee Structure written by Fumiko Hayashi and published by . This book was released on 2013 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper considers possible public policies that could improve efficiency and welfare distribution in the U.S. retail payments industry. Mainly, four options, i) encouraging competition; ii) allowing merchants to surcharge; iii) regulating merchant fees; and iv) regulating payment card rewards, are discussed, but each option has advantages and disadvantages. Any single option may not achieve the policymakers' objective; rather, combining several policy options may be required.

Download or read book Interchange Fees and Payment Card Networks written by and published by . This book was released on 2009 with total page 98 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Merchant acquiring Side of the Payment Card Industry written by Ann Kjos and published by . This book was released on 2007 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Payment Card Interchange Fees written by Walter W. Eubanks and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This report focuses on the Visa and MasterCard card associations, which account for three-fourths of the payment card market in the United States in 2008. The report begins with a discussion of the nontraditional structure of the payment card market. The next section is an analysis of the problem of the optimum level of payment cards to achieve the highest social welfare benefit for cardholders and merchants. The third section discusses the provisions of the Credit Card Fair Free Act of 2008. The last section discusses some implications of the analysis.

Download or read book Beyond Plastic written by Michael A. Brooks and published by . This book was released on 2010-01 with total page 140 pages. Available in PDF, EPUB and Kindle. Book excerpt: Beyond Plastic: Trends in the Payment Card Industry Explore the credit card industry and its impact on consumers, business and the economy. How will the current economic climate affect the way people and businesses spend money and use credit? How will the change in our economy impact the growth of debit cards and other forms of electronic payments and technology? Beyond Plastic: Trends in the Payment Card Industry will answer these questions and more. It will explore how innovations in technology, payment programs, and new markets will lead the way in the new economy; what the new Consumer's Rights and Responsibilities are and what they mean to you; the legal issues that will change the credit landscape; and how to protect against fraud and leverage payment technology to your advantage. Know who the big players are in the industry, how their decisions affect the global market, and how the credit wars will be fought and won. Discover new markets in developing nations and how this cultural shift will affect the face of credit cards and the electronic payment industry in years to come. Payment cards are the foundation of many small businesses in the United States. Without them in today's world, most companies would never get the chance to exist. New markets will open; others will eventually disappear. Beyond Plastic: Trends in the Payment Card Industry provides a comprehensive take on where we have been in this industry, and a look to where we are going.

Download or read book Priceless The Costs of Credit Cards written by Adam J. Levitin and published by . This book was released on 2007 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt: Merchants pay banks a fee on every credit card transaction. These credit card transactions cost American merchants an average of six times the total cost of cash transactions. The variation among credit cards is also large, with some cards, such as rewards cards, costing merchants twice as much as others. The largest component of the fee merchants pay goes to finance rewards programs, which in turn generate more credit card transactions. Although merchants finance the rewards programs, they derive no benefit from them. Rather than generating additional sales, rewards programs merely induce consumers to shift transactions from less expensive payment systems to more expensive rewards credit cards. Why, then, do all consumers pay the same price for purchases, regardless of the means of payment?The answer lies in a set of credit card network rules known as merchant restraints. Merchant restraints prohibit merchants from accepting certain credit cards selectively and from pricing according to cost of payment. Merchant restraints thus prevent merchants from signaling to consumers the costs of different payment methods. Accordingly, consumers never internalize the costs of their choice of payment system. Merchant restraints thus encourage more credit card transactions at higher price than would occur in a perfectly efficient market. The restraints also permit card issuers to externalize the costs of rewards programs to merchants and, ultimately, to consumers who do not use reward cards. Merchant restraints distort competition within the credit card industry and among payment systems in general. Merchant restraints' economic justifications are unfounded, and they should be banned as antitrust violations.

Download or read book Economics of the Credit Card Market written by Win Lam Mok and published by . This book was released on 2003 with total page 87 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Priceless The Economic Costs of Credit Card Merchant Restraints written by Adam J. Levitin and published by . This book was released on 2008 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt: Merchants pay banks a fee on every credit card transaction. These credit card transactions cost American merchants an average of six times the total cost of cash transactions. The variation in fees among credit cards is also large, with some cards, such as rewards cards, costing merchants twice as much as others.The largest component of the fee merchants pay goes to finance rewards programs, which in turn generate more credit card transactions. Although merchants finance the rewards programs, they derive no benefit from them. Rather than generating additional sales, rewards programs merely induce consumers to shift transactions from less expensive payment systems to more expensive rewards credit cards. Why, then, do all consumers pay the same price for purchases, regardless of the means of payment?The answer lies in a set of credit card network rules known as merchant restraints. Merchant restraints prohibit merchants from accepting certain credit cards selectively and from pricing goods and services according to cost of payment. These restraints thus prevent merchants from signaling to consumers the costs of different payment methods. Accordingly, consumers never internalize the costs of their choice of payment system. Merchant restraints thus encourage more credit card transactions at a higher price than would occur in a perfectly efficient market. The restraints also permit card issuers to externalize the costs of rewards programs to merchants and, ultimately, to consumers who do not use rewards cards.This Article argues that merchant restraints distort competition within the credit card industry and among payment systems in general. Further, merchant restraints' economic justifications are unfounded, and they should be banned as antitrust violations.

Download or read book An Empirical Analysis of Payment Card Usage in India written by Shilpa N.C. and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A paradigm shift in the modus operandi of commerce across the globe has been significantly influenced by the payment card industry with brisk strides in digital technology. The blooming payment card industry has escorted the prosperity in economic growth of most of the countries. Besides, there exists a divergent level in subsuming card payment by different countries due to distinct social, economic and cultural background. In India, excessive use cash payments are due to offbeat business models and varied distinction in literacy levels. This paper aims to analyse outstanding payment cards in India by examining the number of cards in operation and the value of transaction in the past decade. Data from RBI source is collected to analyse for a period of eight years (2011-2019). The research finds that credit card penetration has increased by threefold with average growth of 15% YoY and debit cards increased by more than threefold with average growth of 19% YoY during the period of analysis. Yet, asymmetry between debit cards holders and credit card holders exists in India indicating credit card is still niche product. This provides platform for the payment card industry to unleash the potential to tap market in India.

Download or read book Paying with Plastic second edition written by David S. Evans and published by MIT Press. This book was released on 2004-12-17 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt: The definitive account of the trillion-dollar payment card industry. The payment card business has evolved from its inception in the 1950s as a way to handle payment for expense-account lunches (the Diners Club card) into today's complex, sprawling industry that drives trillions of dollars in transaction volume each year. Paying with Plastic is the definitive source on an industry that has revolutionized the way we borrow and spend. More than a history book, Paying with Plastic delivers an entertaining discussion of the impact of an industry that epitomizes the notion of two-sided markets: those in which two or more customer groups receive value only if all sides are actively engaged. New to this second edition, the two-sided market discussion provides useful insight into the implications of these market dynamics for cardholder rewards, merchant interchange fees, and card acceptance. The authors, both of whom have researched the industry for more than 25 years, also examine the implications of the recent antitrust cases on the industry as well as other business and technological changes—including the massive consolidation brought about by bank mergers, the rise of the debit card, and the emergence of e-commerce—that could alter the payment card industry dramatically in the years to come.

Download or read book The Book of Payments written by Bernardo Batiz-Lazo and published by Springer. This book was released on 2016-12-04 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the nature of retail financial transaction infrastructures. Contributions assume a long-term outlook in their exploration of the key financial processes and systems that support a global transition to a cashless economy. The volume offers both modern and historic accounts that demonstrate the constantly changing role of payment instruments. It brings together different theoretical approaches to the study, re-examining and forecasting changes in retail payment systems. Chapters explore a global transition to a cashless society and contemplate future alternatives to cash, cheques and plastic, featuring the perspectives of academics from different disciplines in conversation and industry participants from six continents. Readers are invited to discover the innovation in payment systems and how it co-evolves with changes in society and organisations through personal, corporate and governmental processes.