Payment Network Scale Economies, SEPA, and Cash Replacement

PAYMENT NETWORK SCALE ECONOMIES , SEPA , AND CASH REPLACEMENT Wilko Bolt

The goal of SEPA (Single Euro Payments Area) is to facilitate the emergence of a competitive, intra-European market by making cross-border payments as easy as domestic transactions. With crossborder inter-operability for electronic payments, card transactions will increasingly replace cash and checks for all types of payments. Using different methods, we estimate card and other payment network ...

Payment Scale Economies , Competition , and Pricing

SePa, efficiency, and Payment card comPetition

This paper analyzes the welfare implications of creating a Single Euro Payments Area. We study the effects of increased network compatibility and payment scale economies on consumer and merchant card fees and its impact on card usage. In particular, we model competition among debit cards and between debit and credit cards. We show that competitive pressures dampen merchant fees and increase tot...

Digital Cash Payment Systems

The recent explosion in the popularity of the Internet has been accompanied by considerable interest in using this worldwide collection of interconnected computers as a medium for commerce. While electronic commerce in general is not itself a novel concept, the dizzying pace of change in the computer networking landscape of late promises to bring with it exciting new ways for individuals and co...

From Economies of Density and Network Scale to Multioutput Economies of Scale and Scope: a Synthesis

For more than twenty years, the cost structure of transport industries in general, and the airline industry in particular, has been analyzed through the calculation of two indices: returns to density (RTD) and returns to scale (RTS), which were originally proposed by Caves et al. (1984). During this period, there have been many observations, amendments, caveats and corrections about their calcu...