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Briefing
Developments of QR Code-Based Mobile Payments in East Asia
Initiatives facilitating QR code-based mobile payments in Japan, Singapore, and Hong Kong may address some pain points of banks, nonbanks, and merchants, but whether they address consumers’ depends on factors such as fragmentation and overall digital commerce experience
Working Paper
Defining Households That Are Underserved in Digital Payment Services
US households that lack digital means of making and receiving payments cannot participate fully in an increasingly digitized economy. Assessing the scope of this problem and addressing it requires a definition of households that are underserved in digital payments. Traditional definitions of households underserved in the banking system—those that are unbanked and those that are underbanked—do not account for the ownership of nonbank transaction accounts that can be used to make and receive digital payments. In this paper, we define households underserved in digital payments by considering ...
Journal Article
Interchange fees in Australia, the UK, and the United States : matching theory and practice
Interchange fees are an integral part of the pricing structure of credit and debit card industries. While in recent years the theoretical literature on interchange fees, and payment cards in general, has grown rapidly, the empirical literature has not. There are several reasons for this. First, comprehensive data are hard to obtain. Second, the industries are very complicated, and empirical models need to incorporate many industry-specific features, such as payment-card network rules and government regulations. And third, empirical studies may require a generalized empirical model since, ...
Briefing
Assessing the Case for Retail CBDCs: Central Banks’ Considerations
Many central banks around the world have been researching, experimenting, or developing central bank digital currencies (CBDCs). Although central banks in several emerging markets and developing economies have implemented or plan to implement a general-purpose, or retail, CBDC to promote financial inclusion and improve their payment systems, central banks in many advanced economies have not yet found a compelling case for a retail CBDC.
Working Paper
Faster payments in the United States: how can private sector systems achieve public policy goals?
Consumers and businesses are increasingly expecting faster payments. While many countries have already developed or are in process of developing faster payments, the availability of these payments is fragmented in the United States. The recently released paper by the Federal Reserve encourages private sector participants to provide faster payment services. However, private-sector faster payments systems will face significant challenges in achieving public policy goals of ubiquity, safety, and efficiency unless system governance represents broad public interests. One way to better align ...
Journal Article
Mobile payments : merchants’ perspectives
Journal Article
Measuring the costs of retail payment methods
In the last two decades, retail payments have experienced a dramatic shift from paper-based payment methods to electronic methods. Accurate cost information for the two types of methods would help central banks decide how hard to push for a complete transition to electronic methods and which methods to promote. ; To obtain such information, a number of central banks have recently conducted comprehensive studies of the costs of retail payment methods. Differences in the results of these studies suggest a need for each central bank to conduct its own study. ; Hayashi and Keeton, however, find ...
Working Paper
Financial Literacy, Risk Tolerance, and Cryptocurrency Ownership in the United States
Cryptocurrency owners without sufficient financial literacy and risk tolerance may be financially vulnerable, as the cryptocurrency market is highly volatile and lacks consumer protections. Our study divides cryptocurrency owners into three groups based on their purpose for holding cryptocurrencies—for investment only (investors), for transactions only (transactors), and for a mix of investment and transactions (mix users)—and examines how each group correlates with financial literacy and risk tolerance compared to consumers who do not own cryptocurrencies (nonowners). Using the 2022 ...
Working Paper
Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in the United States and Canada
Using data from the United States and Canada, we quantify consumers’ net pecuniary cost of using cash, credit cards, and debit cards for purchases across income cohorts. The net cost includes fees paid to financial institutions, rewards received from credit or debit card issuers, and the merchant cost of accepting payments that is passed on to consumers as higher retail prices. Even though credit cards are more expensive for merchants to accept compared with other payment methods, merchants typically do not differentiate prices at checkout, but instead pass through their costs to all ...