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Cost savings from electronic payments and ATMs in Europe

Author

Listed:
  • Goran Bergendahl
  • David B. Humphrey
  • Ted Lindblom
  • Magnus Willesson

Abstract

Electronic payments are considerably cheaper than their paper-based alternatives. Similarly, ATMs are a more cost-efficient way to deliver certain depositor services than are branch offices. As the share of electronic payments in 12 European countries rose from 0.43 in 1987 to 0.79 in 1999 and ATMs expanded while the number of branch offices was constant, bank operating costs are estimated to be $32 billion lower than they otherwise might have been, saving 0.38% of the 12 nations' GDP. The authors' results are robust to the form of cost function estimated-composite, Fourier, or translog. ; Also issued as Payment Cards Center Discussion Paper No. 03-14

Suggested Citation

  • Goran Bergendahl & David B. Humphrey & Ted Lindblom & Magnus Willesson, 2003. "Cost savings from electronic payments and ATMs in Europe," Working Papers 03-16, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:03-16
    as

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    File URL: https://www.philadelphiafed.org/-/media/frbp/assets/working-papers/2003/wp03-16.pdf
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    References listed on IDEAS

    as
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    7. Humphrey David & Willesson Magnus & Lindblom Ted & Bergendahl Göran, 2003. "What Does it Cost to Make a Payment?," Review of Network Economics, De Gruyter, vol. 2(2), pages 1-16, June.
    8. Kirstin E. Wells, 1996. "Are checks overused?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 20(Fall), pages 2-12.
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    Citations

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    Cited by:

    1. Marimon, Ramon & Nicolini, Juan Pablo & Teles, Pedro, 2003. "Inside-outside money competition," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1701-1718, November.
    2. Dhananjay Bapat, 2012. "Customer Relationship for Electronic Payment Products," Global Business Review, International Management Institute, vol. 13(1), pages 137-151, February.
    3. Abdullai, Besim, 2009. "The EPS as an e-commerce enabler: The Macedonian perspective," MPRA Paper 13996, University Library of Munich, Germany, revised 05 Mar 2009.
    4. Bingbing Dong, 2014. "Asset Pricing and Monetary Policy," 2014 Meeting Papers 881, Society for Economic Dynamics.
    5. Snellman, Heli, 2006. "Automated teller machine network market structure and cash usage," Scientific Monographs, Bank of Finland, number 2006_038.
    6. Cronin, David & McGuinness, Anne, 2010. "Retail Payment Practices. How They Have Evolved in Recent Times and Where They Might Be Going," Quarterly Bulletin Articles, Central Bank of Ireland, pages 56-82, April.
    7. repec:zbw:bofism:2006_038 is not listed on IDEAS

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    Keywords

    Automated tellers; Electronic funds transfers;

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