Realizing the Gains from Electronic Payments: Costs, Pricing, and Payment Choice

Humphrey, David B.; Kim, Moshe; Vale, Bent

doi:10.2307/2673882

Cited by 175 publications

(110 citation statements)

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“…This suggests that pricing the use of payment instruments may steer Dutch consumers towards cost effective payment behaviour, i.e., the price elasticity for the demand of payment instruments is positive. This was also found by Humphrey et al (2001) for Norway. Another 8% of Dutch consumers state that they pay in cash because of the low transaction amounts at these shops.…”

Section: Reasons Given For Choosing An Instrumentsupporting

confidence: 68%

“…Cross-subsidisation of the retail payment system by surcharging other banking services also distorts the equilibrium demand for these services. Humphrey et al (2001), and Bolt et al (2005) show that consumers are sensitive to explicit pricing of payment services and that this can indeed stimulate consumers to pay more often electronically, reducing the social costs of the retail payment system.…”

Section: Practice and Consequences Of Tariff Structure Of Dutch Pos Pmentioning

confidence: 99%

“…However, the costs of such payment systems are substantial. Estimates of these costs lie around 1-3% of GDP, see e.g., Humphrey et al (1996) for the US and Humphrey et al (2001) for Norway. Brits and Winder (2005) estimated the social costs of point-of-sale (POS) payments in the Netherlands at EUR 2.9 billion, i.e., 0.65% GDP in 2002.…”

Section: Introductionmentioning

confidence: 99%

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Payment Instruments as Perceived by Consumers – Results from a Household Survey

Jonker

2007

De Economist

112

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SummarySurvey results show that Dutch consumers perceive paying in cash as an inexpensive way to pay, compared to paying with electronic payment cards. This finding partly explains the low usage of electronic payment cards in point-of-sale (POS) payments. The objective of the survey was to identify price and non-price features of payment instruments that can be used to stimulate the use of electronic payment cards. Their attractiveness can be increased, through technological modifications that enhance their convenience and by increasing the number of acceptance points. Making it less expensive for consumers to pay with payment cards could also increase the usage of payment cards.

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Section: Reasons Given For Choosing An Instrumentsupporting

confidence: 68%

Section: Practice and Consequences Of Tariff Structure Of Dutch Pos Pmentioning

confidence: 99%

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Payment Instruments as Perceived by Consumers – Results from a Household Survey

Jonker

2007

De Economist

112

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“…Electronic Funds Transfer at Point of Sale (EFTPOS), Electronic Funds Transfers (EFT), Internet banking, and electronic foreign exchange, bond, equity, and bank transfers have turned the financial system into a Chartelist system where, in some limited sense, "there is no limit to which credit can expand in response to an increase in demand for credit" (Wray 1998;. The US system is more dependent upon checking accounts than most advanced nations, but this payment method is, along with electronic methods, consistent with the lowest ratio of cash/GDP in the world at around 20 percent (Lacker and Weinberg 1998;Humphrey et al 2000;Stavins 2001). Endogenous finance operates through various, mainly electronic, instruments such as bank bills, certificates of deposit, capital inflow, trade credit, options, swaps, capital inflow, and reserve bank "accommodation."…”

Section: Financial Ssa: Conditions and Dynamic Structurementioning

confidence: 99%

Growth and Development in the Global Political Economy

O’Hara¹

2004

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Recent institutional changes have seen the increasing dominance of globalization and neoliberalism in the world economy. As markets have been deregulated, privatization and unproductive government spending have been promoted. Yet the greater volatility of capitals, the emergence of many financial crises, a decline in trust, and environmental problems have cast doubt on the effectiveness of neoliberal globalization.This book studies the impact of neoliberal globalization on growth and development in the world economy. It scrutinizes whether new social structures of accumulation or modes of regulation have emerged to promote long-term socioeconomic performance in the global economy during the early years of the twenty-first century. Special reference is given to the specific performance of neoliberal governance; transnational corporations; global institutions of money, trade, and production; international relations of war and terrorism; financial institutions; and the family-community environment.It is a comprehensive analysis of the degree to which institutional development has managed to promote socioeconomic performance in the global economy. It also presents a thorough policy program of action for long wave upswing in the world economy. It will be especially useful for those scholars and students concerned with issues of governance, global political economy, institutions, and macroeconomics.Phillip Anthony O'Hara is Professor of Global Political Economy and Governance and Director of the Global Political Economy Research Unit, at Curtin University, Perth, Australia. He won the European Association for Evolutionary Political Economy "2002 Gunnar Myrdal Prize" for Marx, Veblen and Contemporary Institutional Political Economy (Elgar, 2000); is the editor of Global Political Economy and the Wealth of Nations (Routledge, 2004) Reviews of Growth and Development in the Global Political Economy"I am delighted to endorse Phil O'Hara's new volume. Many years ago I examined his Honours dissertation at Murdoch University on Marx's theories of crisis. It was an outstanding piece of scholarship and I recognised then that a star had been born. His many contributions since show how right I was! Growth and Development in the Global Political Economy is the jewel in his crown. It contains a superb intertwining of historical, political, economic and institutional analysis of modern global capitalism, its successes and failures. It is also a critique of the claims of neoliberal analysis, and the provision of an alternative illuminating analysis; combined with detailed suggestions for the creation of institutions that will go some way towards ensuring that potential sustainable development will be achieved in a manner that helps all the world's citizens and preserves the physical environment for future generations. O'Hara has written a notable book which ought to be read by all serious economists, social scientists, concerned citizens, politicians and policy makers." Professor G.C.Harcourt, Cambridge University, UK. "In Growth...

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“…Most previous studies did not include this factor because very few data sets contain price information in conjunction with consumer payment choice. There are a few exceptions: Humphrey, Kim, and Vale [2001] estimated price elasticity for various payment methods by using Norwegian aggregate level data; Amromin, Jankowski, and Poter [2005] examined how consumers respond to differentiated pricing of cash and electronic toll payment on the Illinois tollway; Borzekowski, Kiser, and Ahmed [forthcoming] examined how fees assessed by banks on debit card transactions affect consumer payment choice; and Zinman [2008] considered the price of a credit card charge is a critical margin and examined how it affects consumer payment choice between credit and debit cards. All of them suggest that consumers are price sensitive.…”

Section: Previous Literaturementioning

confidence: 99%

Payment card rewards programs and consumer payment choice

Ching

Hayashi

2010

Journal of Banking & Finance

165

115

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We estimate the direct effects of rewards card programs on consumer payment choice for in-store transactions. By using a data set that contains information on consumer perceived attributes of payment methods and consumer perceived acceptance of payment methods by merchants, we control for consumer heterogeneity in preferences and choice sets. We conduct policy experiments to examine the effects of removing rewards from credit and/or debit cards. The results suggest that: (i) only a small percentage of consumers would switch from electronic to paper-based payment methods, (ii) the effect of removing credit card rewards is greater than that of removing debit card rewards, and consequently, (iii) removing rewards on both credit and debit cards would reduce credit card transactions, but increase debit card transactions.

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Realizing the Gains from Electronic Payments: Costs, Pricing, and Payment Choice

Cited by 175 publications

References 6 publications

Payment Instruments as Perceived by Consumers – Results from a Household Survey

Payment Instruments as Perceived by Consumers – Results from a Household Survey

Growth and Development in the Global Political Economy

Payment card rewards programs and consumer payment choice

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