The law's role in payments
Technology's role in payments
Stored value cards: costly private substitutes for currency
A model in which both currency and stored value cards are used to make payments is presented. I compare steady-state equilibria with and without stored value cards. Stored value cards are beneficial because they help alleviate the deadweight loss due to inflation. When the nominal interest rate is greater than the government's resource cost of providing currency, the alternative means of payment may have larger real resource costs than the currency it replaces. Stored value results in either a net increase or a net decrease in economic welfare depending upon whether average costs are below or ...
Money in the twenty-first century.
What implications do 21st century monetary innovations bring for holdings of central bank money and standards of value? Emerging technologies such as cybercash, e-cash, and smart cards can be expected to reduce demand for central bank money, but the theoretical framework for monetary policy has not changed. The authors stress three points in this paper: 1) money innovations tend to reduce the demand for central bank money, but it remains to be seen whether the predictability of that demand, and thus the reliability of monetary policy, will decline in the coming century; 2) in principle, ...
Are we ready for the electronic finance revolution?
Network externalities: the catch-22 of retail payments innovations
An investigation of one of the reasons why electronic payments have not yet supplanted cash and checks in retail transactions: Consumers willingness to use an innovation depends on the number of merchants who have already adopted it, and merchants willingness to invest in the innovation depends on the number of consumers who are already using it.
Lessons learned from past payments experiences
An exploration of the issues that must be addressed if stored-value cards and other electronic money systems are to be major payment mechanisms in the global financial market.