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An Economic Analysis of the Single Euro Payments Area (SEPA)

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  • Guido K. Schaefer

Abstract

Under which conditions is it advantageous for countries to form a single payments area? This question is analyzed in a model of spatial bank competition to understand better the economic foundations of the Single Euro Payments Area (SEPA). An economic research perspective on the mostly informal policy debates about SEPA is developed. The analysis suggests that expectations about the positive effects of SEPA may be exaggerated as most channels for enhancing public welfare seem rather weak. Still the project may be worthwhile undertaking if the cost of creating SEPA-compliant systems is reduced by extending the time frame for the implementation phase and if the use of electronic payments is promoted.

Suggested Citation

  • Guido K. Schaefer, 2008. "An Economic Analysis of the Single Euro Payments Area (SEPA)," FIW Working Paper series 011, FIW.
    • Handle: RePEc:wsr:wpaper:y:2008:i:011
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    1. repec:zbw:bofrdp:2008_022 is not listed on IDEAS
    2. Kemppainen, Kari, 2008. "Integrating European retail payment systems: some economics of SEPA," Bank of Finland Research Discussion Papers 22/2008, Bank of Finland.
    3. Kemppainen, Kari, 2008. "Integrating European retail payment systems : some economics of SEPA," Research Discussion Papers 22/2008, Bank of Finland.
    4. Bita Shabgard, 2021. "Single euro payment area (SEPA) and banking industry: discriminatory pricing vs. non-discriminatory pricing," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(3), pages 355-383, September.
    5. Bolt, Wilko & Schmiedel, Heiko, 2009. "SEPA, efficiency, and payment card competition," Working Paper Series 1140, European Central Bank.
    6. Avadanei, Anamaria & Ghiba, Nicolae, 2010. "Implication of Single Euro Payments Area for financial services market. The case of Romania," MPRA Paper 28614, University Library of Munich, Germany.

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    More about this item

    Keywords

    SEPA; Optimum Payments Areas; Payment System; Payment Area;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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