Search Results
Journal Article
Mobile Banking Use and Consumer Readiness to Benefit from Faster Payments
The U.S. payments industry is currently implementing faster payments that will enable consumers and businesses to send and receive payments almost instantly at any time of day, any day of the year. Mobile banking in particular may allow consumers to realize the full benefits of faster payments. As a result, a consumer’s use of mobile banking is a good indicator of their readiness to benefit from faster payments.Fumiko Hayashi and Ying Lei Toh examine which consumer characteristics are associated with mobile banking use as well as what other factors may influence consumer readiness. They ...
Briefing
Combating Authorized Push Payment Scams in Fast Payment Systems
Fast payments can help consumers improve their cash flow, but the speed and irrevocability of these payments also make them a target for fraudsters seeking to commit authorized push payment (APP) scams. Combating APP scams is critical to ensuring the safety of fast payments and building and maintaining consumer confidence in fast payment systems.
Working Paper
Prior Fraud Exposure and Precautionary Credit Market Behavior
We study how past experiences with privacy shocks affect individuals’ likelihood to take precautionary behavior when faced with a new privacy shock in the context of credit markets. We focus on experiences with identity theft and data breaches, two kinds of privacy shocks that either directly lead to fraud or put an individual at an elevated risk of experiencing fraud. We show that immediately after the announcement of the 2017 Equifax data breach, individuals with either kind of prior fraud exposure were more likely to freeze their credit report and close credit card accounts than ...
Working Paper
Prior Fraud Exposure and Precautionary Credit Market Behavior
This paper studies how past experiences with privacy shocks affect individuals’ take-up of precautionary behavior when faced with a new privacy shock in the context of credit markets. We focus on experiences with identity theft and data breaches, two kinds of privacy shocks that either directly lead to fraud or put an individual at an elevated risk of experiencing fraud. Using the announcement of the 2017 Equifax data breach, we show that individuals with either kind of prior fraud exposure were more likely to freeze their credit report and close credit card accounts than individuals with ...
Journal Article
Addressing Traditional Credit Scores as a Barrier to Accessing Affordable Credit
Affordable credit enables consumers to better manage their finances, cope with unexpected emergencies, and pursue opportunities such as entrepreneurship or higher education. However, many consumers face difficulties obtaining the credit they need. A major impediment is lenders’ reliance on traditional credit scores to assess consumers’ creditworthiness. These credit scores affect not only loan approval decisions but also the interest rates consumers pay on their loans. While credit scores are intended to help lenders make informed decisions about consumers’ risk of default, they do not ...
Briefing
Promoting Payment Inclusion in the United States
In recent decades, entities in both the public and private sectors have worked to promote payment inclusion in the United States, whether by expanding the supply of transaction accounts or boosting consumer demand for them. However, more research and data collection are needed to better define and measure payment inclusion as well as evaluate how effective efforts have been to improve it.
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 ...
Working Paper
Privacy Regulation and Quality Investment
This paper analyzes whether a privacy regulation that restricts a dominant firm?s data disclosure level harms the firm?s incentives to invest in service quality and thereby harms social welfare. We study how the regulation affects the privacy and quality choices of a monopoly service provider, who derives revenues solely from disclosing user data to third parties, as well as how those choices in turn affect consumers? participation and information-sharing decisions. We show that the regulation does not always harm investment incentives; moreover, even when it does, it may still improve social ...