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Electronic Money and Payments: Recent Developments and Issues

Author

Listed:
  • Ben Fung
  • Miguel Molico
  • Gerald Stuber

Abstract

The authors review recent developments in retail payments in Canada and elsewhere, with a focus on e-money products, and assess their potential public policy implications. In particular, they study how these developments will affect the demand for bank notes, and the central bank’s balance sheet and its seigniorage revenue, which as a result might affect the central bank’s ability to implement and conduct monetary policy and to promote financial stability. Other public policy issues, such as safety and efficiency, and user protection as well as legal, security and law enforcement, are also considered. While the demise of cash is not imminent, it is important for the central bank to continue to evaluate its potential roles with regard to e-money.

Suggested Citation

  • Ben Fung & Miguel Molico & Gerald Stuber, 2014. "Electronic Money and Payments: Recent Developments and Issues," Discussion Papers 14-2, Bank of Canada.
    • Handle: RePEc:bca:bocadp:14-2
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    References listed on IDEAS

    as
    1. Freedman, Charles, 2000. "Monetary Policy Implementation: Past, Present and Future--Will Electronic Money Lead to the Eventual Demise of Central Banking?," International Finance, Wiley Blackwell, vol. 3(2), pages 211-227, July.
    2. Joshua S. Gans & Hanna Halaburda, 2015. "Some Economics of Private Digital Currency," NBER Chapters, in: Economic Analysis of the Digital Economy, pages 257-276, National Bureau of Economic Research, Inc.
    3. Warren E. Weber, 2014. "The Efficiency of Private E-Money-Like Systems: The U.S. Experience with State Bank Notes," Staff Working Papers 14-15, Bank of Canada.
    4. Carlos Arango & Angelika Welte, 2012. "The Bank of Canada’s 2009 Methods-of-Payment Survey: Methodology and Key Results," Discussion Papers 12-6, Bank of Canada.
    5. Ben Fung & Kim Huynh & Leonard Sabetti, 2012. "The Impact of Retail Payment Innovations on Cash Usage," Staff Working Papers 12-14, Bank of Canada.
    6. Carlos Arango & Kim Huynh & Ben Fung & Gerald Stuber, 2012. "The Changing Landscape for Retail Payments in Canada and the Implications for the Demand for Cash," Bank of Canada Review, Bank of Canada, vol. 2012(Autumn), pages 31-40.
    7. Freedman, 2000. "Monetary Policy Implementation: Past, Present and Future – Will Electronic Money Lead to the Eventual Demise of Central Banking?," International Finance, Wiley Blackwell, vol. 3(2), pages 211-227, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. G. Ardizzi & F. Crudu & C. Petraglia, 2015. "The Impact of Electronic Payments on Bank Cost Efficiency: Nonparametric Evidence," Working Paper CRENoS 201517, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    2. Warren E. Weber, 2014. "The Efficiency of Private E-Money-Like Systems: The U.S. Experience with State Bank Notes," Staff Working Papers 14-15, Bank of Canada.
    3. Carlos León, 2021. "The dawn of a mobile payment scheme: The case of Movii," Borradores de Economia 1157, Banco de la Republica de Colombia.
    4. Walter Engert & Ben Fung & Scott Hendry, 2018. "Is a Cashless Society Problematic?," Discussion Papers 18-12, Bank of Canada.
    5. Imola Drigă & Codruța Dura & Loredana Cristea, 2016. "Non-Cash Payments - Trends and Prospects," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 16(2), pages 13-20.
    6. Ben Fung & Hanna Halaburda, 2016. "Central Bank Digital Currencies: A Framework for Assessing Why and How," Discussion Papers 16-22, Bank of Canada.
    7. Jonathan Chiu & Tsz-Nga Wong, 2014. "E-Money: Efficiency, Stability and Optimal Policy," Staff Working Papers 14-16, Bank of Canada.
    8. Heng Chen & Marie-Hélène Felt & Kim P. Huynh, 2017. "Retail payment innovations and cash usage: accounting for attrition by using refreshment samples," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 180(2), pages 503-530, February.
    9. Laurent, Alain & Monvoisin, Virginie, 2015. "Les nouvelles monnaies numériques : au-delà de la dématérialisation de la monnaie et de la contestation des banques," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 18.
    10. Arango, Carlos & Huynh, Kim P. & Sabetti, Leonard, 2015. "Consumer payment choice: Merchant card acceptance versus pricing incentives," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 130-141.
    11. Walter Engert & Ben Fung, 2017. "Central Bank Digital Currency: Motivations and Implications," Discussion Papers 17-16, Bank of Canada.
    12. León, Carlos, 2021. "The adoption of a mobile payment system: the user perspective," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 2(4).
    13. Janet Hua Jiang & Enchuan Shao, 2020. "The Cash Paradox," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 36, pages 177-197, April.
    14. Christie Smith & Aaron Kumar, 2018. "Crypto‐Currencies – An Introduction To Not‐So‐Funny Moneys," Journal of Economic Surveys, Wiley Blackwell, vol. 32(5), pages 1531-1559, December.
    15. Victor L. Dostov & Pavel M. Shoust & Gleb V. Alekseev & Svetlana V. Krivoruchko, 2020. "Approaches to Regulating E-Money Market in the Eurasian Economic Community: Comparative Analysis," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 43-58, October.
    16. Warren E. Weber, 2015. "The Efficiency of Private E-Money-Like Systems: The U.S. Experience with National Bank Notes," Staff Working Papers 15-3, Bank of Canada.
    17. Zlatko BEZHOVSKI & Ljupco DAVCEV & Mila MITREVA, 2021. "Current adoption state of cryptocurrencies as an electronic payment method," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 13(1), pages 44-50, March.
    18. Warren E. Weber, 2015. "Government and private e-money-like systems: federal reserve notes and national bank notes," FRB Atlanta CenFIS Working Paper 15-3, Federal Reserve Bank of Atlanta.
    19. Janet Hua Jiang & Enchuan Shao, 2014. "Understanding the Cash Demand Puzzle," Staff Working Papers 14-22, Bank of Canada.

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    More about this item

    Keywords

    Bank notes; E-money; Financial services; Payment clearing and settlement systems;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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