Openness and technology diffusion in payment

We study the relationship between openness and payment system development. In particular, we analyze how the existence of technology diffusion from a more developed country fosters a transformation of payment choice in a less developed country. We apply our analysis to Mexico. Economic growth in Mexico was not high enough to cause a transformation of payment choice observed in the data after 2001. We argue that the switch towards electronic payments can be attributed to openness and related payment technology spillovers from the US in the context of NAFTA.

Human Capital, the Structure of Production, and Growth

Recent decisions by the Spanish national competition authority (TDC) mandate payment systems to include only two costs when setting their domestic multilateral interchange fees (MIF): a fixed processing cost and a variable cost for the risk of fraud. This artificial lowering of MIFs will not lower consumer prices, because of uncompetitive retailing; but it will however lead to higher cardholders fees and, likely, new prices for point of sale terminals, delaying the development of the immature Spanish card market. Also, to the extent that increased cardholders fees do not offset the fall in MIFs revenue, the task of issuing new cards will be underpaid relatively to the task of acquiring new merchants, causing an imbalance between the two sides of the networks. Moreover, the pricing scheme arising from the decisions will cause unbundling and underprovision of those services whose costs are excluded. Indeed, the payment guarantee and the free funding period will tend to be removed from the package of services currently provided, to be either provided by third parties, by issuers for a separate fee, or not provided at all, especially to smaller and medium-sized merchants. Transaction services will also suffer the consequences that the TDC precludes pricing them in variable terms.

Contagion and efficiency in gross and net interbank payment systems

The increased fragility of the banking industry has generatedgrowing concern about the risks associated with the paymentsystems. Although in most industrial countries differentinterbank payment systems coexist, little is really knownabout their propierties in terms of risk and efficiency. Wetackle this question by comparing the two main types ofpayment systems, gross and net, in a framework whereuncertainty arises from several sources: the time ofconsumption, the location of consumption and the return oninvestment. Payments across locations can be made either bydirectly transferrring liquidity or by transferring claimsagainst the bank in the other location. The two mechanism areinterpreted as the gross and net settlement systems ininterbank payments. We characterize the equilibria in the twosystems and identify the trade-off in terms of safety andefficiency.

Consumer Advisory Bulletin, Medicare Rx Drug Discount Cards: Check 'em out -- but Beware of Scams, May 2004

The Attorney General’s Consumer Protection Division receives hundreds of calls and consumer complaints every year. Follow these tips to avoid unexpected expense and disappointments. This record is about: Medicare Rx Drug Discount Cards: Check 'em out -- but Beware of Scams

Consumer Advisory Bulletin, Credit Cards on Student Incomes: Proceed With Caution – and Shop With Care, Fall 2007

The Attorney General’s Consumer Protection Division receives hundreds of calls and consumer complaints every year. Follow these tips to avoid unexpected expense and disappointments. This record is about: Credit Cards on Student Incomes: Proceed With Caution – and Shop With Care.

Consumer Advisory Bulletin, Health "Discount Cards" -- A Prescription for Wasting Money? ,January 2008

The Attorney General’s Consumer Protection Division receives hundreds of calls and consumer complaints every year. Follow these tips to avoid unexpected expense and disappointments. This record is about: Health "Discount Cards" -- A Prescription for Wasting Money?

Price regulation of plastic money: A critical assessment of Spanish rules

Recent decisions by the Spanish national competition authority (TDC) mandate paymentsystems to include only two costs when setting their domestic multilateral interchange fees(MIF): a fixed processing cost and a variable cost for the risk of fraud. This artificiallowering of MIFs will not lower consumer prices, because of uncompetitive retailing; but itwill however lead to higher cardholders fees and, likely, new prices for point of saleterminals, delaying the development of the immature Spanish card market. Also, to the extent that increased cardholders fees do not offset the fall in MIFs revenue, the task of issuing new cards will be underpaid relatively to the task of acquiring new merchants, causing an imbalance between the two sides of the networks. Moreover, the pricing scheme arising from the decisions will cause unbundling and underprovision of those services whose costs are excluded. Indeed, the payment guarantee and the free funding period will tend to be removed from the package of services currently provided, to be either provided by third parties, by issuers for a separate fee, or not provided at all, especially to smaller and medium-sized merchants. Transaction services will also suffer the consequences that the TDC precludes pricing them in variable terms.

Electronic Payments for Driver's Licensing Transactions,December 31, 2008

House File 2196 required the Department of Transportation (DOT) to study the acceptance of electronic payments at its customer service sites and sites operated by county treasurers. Specifically the legislation requires the following: “The department of transportation shall review the current methods the department employs for the collection of fees and other revenues at sites operated by county treasurers under chapter 321M and at customer service sites operated by the department. In conducting its review, the department, in cooperation with the treasurer of state, shall consider providing an electronic payment option for all of its customers. The department shall report its findings and recommendations by December 31, 2008, to the senate and house standing committees on transportation regarding the advantages and disadvantages of implementing one or more electronic payment systems.” This review focused on estimating the costs of providing an electronic payment option for customers of the DOT driver’s license stations and those of the 81 county treasurers. Customers at these sites engage in three primary financial transactions for which acceptance of electronic payments was studied: paying for a driver’s license (DL), paying for a non-operator identification card (ID), and paying certain civil penalties. Both consumer credit cards and PIN-based debit cards were reviewed as electronic payment options. It was assumed that most transactions would be made using a consumer credit card. Credit card companies charge a fee for each transaction for which they are used. The amount of these fees varies among credit card companies. The estimates for credit card fees used in this study were based on the State Treasurer of Iowa’s current credit card contract, which is due to expire in September 2009. Since credit card companies adjust their fees each year, estimates were based on the 2008 fee schedule. There is also a fee for the use of PIN-based debit cards. The estimates for PIN-based debit card transactions were based on information provided by Wells Fargo Merchant Services for current fees charged by debit card networks. Credit and debit card transactions would be processed through vendor-provided hardware and software. The costs would be determined through the competitive bidding process since several vendors provide this function; therefore, these costs are not reflected in this document.

Consumer Advisory Bulletin, Credit Cards vs. Debit Cards: They May Look the Same, But They’re Different!, March 2011

The Attorney General’s Consumer Protection Division receives hundreds of calls and consumer complaints every year. Follow these tips to avoid unexpected expense and disappointments. This record is about: Credit Cards vs. Debit Cards: They May Look the Same, But They’re Different!

Consumer Advisory Bulletin, Credit Cards vs. Nailing Down Home Repair Rip-Offs & Disputes, April 2011

The Attorney General’s Consumer Protection Division receives hundreds of calls and consumer complaints every year. Follow these tips to avoid unexpected expense and disappointments. This record is about: Nailing Down Home Repair Rip-Offs & Disputes

Report on a review of selected general and application controls over the Iowa Department of Administrative Service’s (DAS) Human Resource Information System (HRIS), Payroll, Integrated Information for Iowa (I/3) and E-Payment Engine Systems for the periods April 13, 2009 through May 15, 2009 and April 5, 2010 through May 7, 2010

Report on a review of selected general and application controls over the Iowa Department of Administrative Service’s (DAS) Human Resource Information System (HRIS), Payroll, Integrated Information for Iowa (I/3) and E-Payment Engine Systems for the periods April 13, 2009 through May 15, 2009 and April 5, 2010 through May 7, 2010

Agency Fact Sheet, Department of Human Services: Asst. Payment, FY2011

This document produced by the Iowa Department of Administrative Services has been developed to provide a multitude of information about executive branch agencies/department on a single sheet of paper. The facts provides general information, contact information, workforce data, leave and benefits information and affirmative action data.

Consumer Advisory Bulletin, Paper or Plastic? Gift Certificates & Gift Cards, February 2013

The Attorney General’s Consumer Protection Division receives hundreds of calls and consumer complaints every year. Follow these tips to avoid unexpected expense and disappointments. This record is about: Paper or Plastic? Gift Certificates & Gift Cards

Report on a review of selected general and application controls over the Iowa Department of Transportation’s Vendor Payment System for the period March 11, 2013 through April 12, 2013

Report on a review of selected general and application controls over the Iowa Department of Transportation’s Vendor Payment System for the period March 11, 2013 through April 12, 2013