Search Results
Briefing
Still on Trial? The Court’s Use of Economic Analysis in the American Express Case
In a 2018 antitrust case, the Supreme Court ruled that American Express did not break federal laws in prohibiting merchants from steering consumers to alternative payment methods. However, some antitrust scholars disagree with how the court defined the relevant market and determined anticompetitive effects, and are concerned that the decision will make it more difficult to bring antitrust cases against payment platforms in the future.
Journal Article
Pandemic Relief Has Aided Low-Income Individuals: Evidence from Alternative Financial Services
Although low-income individuals are more likely to have lost their jobs due to the COVID-19 pandemic, pandemic relief efforts may have helped prevent them from experiencing increased financial distress. Consumer interest in payday loans, title loans, and pawn loans have all declined since the onset of the pandemic, suggesting low-income individuals have been able to access credit and meet basic financial needs without the use of these alternative financial services.
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 ...
Briefing
How Do Consumers’ Fraud Experiences Vary with Their Financial Vulnerability?
A sizeable share of U.S. consumers has been exposed to financial fraud. According to the 2024 Survey of Household Economics and Decisionmaking (SHED), in 2023, 21 percent of U.S. consumers experienced financial fraud involving their credit cards, bank accounts, or other financial products. Fraud victims often lose money in a fraud incident and may not fully recover the money later, ultimately sustaining fraud losses. The adverse financial effects of fraud are likely to be most pronounced for financially constrained consumers, as these consumers tend to have little financial cushion to absorb ...
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 ...
Working Paper
Does Experience Matter? Past Fraud Experiences, Data Compromises, and Credit Market Behavior
We study how past experiences with fraud affect individuals’ likelihood of taking precautionary action in credit markets when faced with a new shock that raises their fraud risks. We focus on two kinds of past experiences with fraud: direct experience with fraud and a “near-miss” experience that increased fraud risk but did not directly lead to fraud. Using the 2017 Equifax data breach announcement, we show that individuals with either type of prior experience with fraud were more likely to take a precautionary action — freezing their credit report — than individuals with no prior ...
Briefing
When Paying Bills, Low-Income Consumers Incur Higher Costs
Low-income consumers are more likely to pay bills using costlier payment methods, even when they have access to cheaper bank account-based methods. Digital exclusion, cash flow constraints, and lack of trust in or familiarity with electronic payment methods may explain low-income consumers’ reliance on costlier bill payment methods.
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
Defining Households That Are Underserved in Digital Payment Services
U.S. 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—are not suitable because they 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 ...