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Convergence of European retail payments

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  • Martikainen, Emmi
  • Schmiedel, Heiko
  • Takalo, Tuomas

Abstract

We estimate convergence in the European retail payments market during the period 1995–2011 for the most popular retail payment instruments: cash, debit card, credit card, direct debit, credit transfer, cheque and e-money. To estimate convergence, we employ the concepts of beta and sigma convergence. There is some evidence of convergence for all payment instruments, except for cheques and e-money. The results suggest that the cross-country dispersion of the use of payment instruments has declined over time in Europe, and the pace of convergence has picked up since the introduction of the single currency. We also find evidence for beta convergence for card payments, direct debits and credit transfers. The results indicate that convergence in European retail payments has progressed despite the financial crisis.

Suggested Citation

  • Martikainen, Emmi & Schmiedel, Heiko & Takalo, Tuomas, 2015. "Convergence of European retail payments," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 81-91.
  • Handle: RePEc:eee:jbfina:v:50:y:2015:i:c:p:81-91
    DOI: 10.1016/j.jbankfin.2014.09.021
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    Cited by:

    1. Krivosheya, Egor & Korolev, Andrew, 2016. "Benefits of the retail payments card market: Russian cardholders' evidence," Journal of Business Research, Elsevier, vol. 69(11), pages 5034-5039.
    2. Hasan, Iftekhar & Martikainen, Emmi & Takalo, Tuomas, 2014. "Promoting efficient retail payments in Europe," Research Discussion Papers 20/2014, Bank of Finland.
    3. Silva, Vânia G. & Ramalho, Esmeralda A. & Vieira, Carlos R., 2016. "The impact of SEPA in credit transfer payments: Evidence from the euro area," Research in International Business and Finance, Elsevier, vol. 38(C), pages 404-416.
    4. Vania Silva & Esmeralda Ramalho & Carlos Vieira, 2016. "Is EMV adoption changing card payments? Evidence from the European Union," CEFAGE-UE Working Papers 2016_05, University of Evora, CEFAGE-UE (Portugal).
    5. repec:spr:jbecon:v:87:y:2017:i:5:d:10.1007_s11573-017-0852-x is not listed on IDEAS
    6. repec:kap:openec:v:28:y:2017:i:3:d:10.1007_s11079-016-9412-1 is not listed on IDEAS
    7. Vânia G. Silva & Esmeralda A. Ramalho & Carlos R. Vieira, 2017. "The Use of Cheques in the European Union: A Cross-Country Analysis," Open Economies Review, Springer, vol. 28(3), pages 581-602, July.

    More about this item

    Keywords

    Retail payments; Convergence; Financial integration; SEPA;

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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