Payment Network Scale Economies, SEPA, and Cash Replacement
AbstractThe 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 cross-border 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 scale economies for Europe. These indicate substantial cost efficiency gains if processing is consolidated across borders rather than "piggy-backed" onto existing national operations. Cost reductions likely to induce greater replacement of small value cash transactions are also illustrated.
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Bibliographic InfoArticle provided by De Gruyter in its journal Review of Network Economics.
Volume (Year): 6 (2007)
Issue (Month): 4 (December)
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Web page: http://www.degruyter.com
Other versions of this item:
- Wilko Bolt & David Humphrey, 2007. "Payment network scale economies, SEPA, and cash replacement," Working Papers 07-32, Federal Reserve Bank of Philadelphia.
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