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Effects of direct pricing of retail payment methods in Norway

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  • Hromcová, Jana
  • Callado-Muñoz, Francisco J.
  • Utrero-González, Natalia

Abstract

In this paper we develop a model where agents can acquire goods using cash and two non-cash alternatives. We use it to study the effects of the pricing policy of payment methods implemented in Norway, carried out by individual banks and promoted by the authorities. We show that this policy induces a relative increase in the prices of checks with respect to the other means of payments (cash and cards) and leads to a fast switch towards cheaper electronic transactions. Our analysis shows that due to this policy welfare has diminished in the short run.

Suggested Citation

  • Hromcová, Jana & Callado-Muñoz, Francisco J. & Utrero-González, Natalia, 2014. "Effects of direct pricing of retail payment methods in Norway," Economic Modelling, Elsevier, vol. 37(C), pages 428-438.
    • Handle: RePEc:eee:ecmode:v:37:y:2014:i:c:p:428-438
    DOI: 10.1016/j.econmod.2013.11.036
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    More about this item

    Keywords

    Cash; Payments; Human capital; Cash-in-advance;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models

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