Thursday, May 27, 2004
Payment instruments and network effects: why Americans still write checks
The dissertation contains two models to further explore and explain network effects in payments and the stepwise innovation and adoption of technology. So after reading the dissertation one understands why:
- payment systems are national (as a result of the underlying transaction patterns),
- one single technology standard may not be the only equilibrium outcome on a national or European level,
- choices for technological innovation and adoption build upon previous choices and existing infrastructures,
- stepwise innovation is the way forward rather than paradigm shifts and payment systems that are built from scratch.
The theory is applied to a number of cases and thus allows testing and discussion on the basis of empirical data. And although some theoretic deliberations on network effects do actually reach this more detailed level, the adapted models of Leibbrandt provide more insight into the subject matter and are more close to reality in the payments industry.
In sum, the dissertation makes particularly good reading for public policy makers in the payment industry as they might want to reconsider the popular one-single-standard idea (and some more issues...). Other than that, we can rest assured that the content of the work and its paradoxical copyright notice (in which copying, pasting, disseminating of the work is encouraged) will contribute to its visibility to both practicioners and academics.
Posted by Simon on 3:03 PM | link
Wednesday, May 26, 2004
The Myth of Systemic Risk
I also come from the perspective that "systemic risk" in banking is not a threat and has not been a great danger in world history. It is a scare term, much like the use of the word "fire" in a crowded theater. Systemic risk is used shamelessly by regulators to justify their own actions, and by novelists and movie script writers to provide plots for horror stories. This is my bottom line, and if I had two hours I could go on and give you all the evidence.
Posted by Simon on 3:05 PM | link
Tuesday, May 18, 2004
Dutch flavour of EU directives....
Apart from their observation, the Regulation 1/2003 holds promises for more competion in local markets. Market players may now take one another to court if they observe collusion/kartels. Interesting enough, this change has not received a lot of attention in the media.
Posted by Simon on 10:58 AM | link
Laws or self-regulation?
1-the cost of regulation are lower for self-regulation when compared to using laws and legal rules,
2-at the moment, the possibilities of self-regulation have not been explored/used to their fullest potential. Common choices for self-fegulation now often lead to a certification structure (with a transfer of compliance costs to the private sector),
3-in practice, there is still hardly a systematic discussion of the possible regulatory options: laws/rules vs self-regulation.
Posted by Simon on 10:32 AM | link
He provides (and illustrates) five arguments:
1-improved public discussions, deliberations and decision making due to the availablity of all information,
2-improved research, due to the scrutiny of the results by peer-researchers and the reputation effects of the publication,
3-citizens pay taxes for this research so they deserve to see the results of what has been paid for with their money,
4-improved confidence in government and elimination of the element of secrecy that now exists if government refuse to publish reports,
5-keeping it secret is impossible; one slip of the tongue/pen by the involved researchers/researched will lead to further questions about the nature of the research, its contents etc. And to the questions why the results are kept secret, which is the content of the reports etc..
Posted by Simon on 10:16 AM | link
Monday, May 17, 2004
Cost / income ratio flawed...?
Posted by Simon on 11:08 AM | link
Monday, May 10, 2004
Pre-paid funds of mobile operators are e-money (when used to pay others) !
The adapted infrastructures and billing engines from mobile phone network operators may fall under the future local legal implementation of the EMI-directive and (for the billing part of it) under local law with respect to payment instrument. It appears to be useful, therefore, for mobile phone operators and regulators to further consider and discuss the potential legal consequences of the current technical developments.
Regulators may benefit from this discussion and be better able to decide on the best local implementation of the EMI-directive. The mobile phone network operators may benefit by better understanding the supervisory consequences of some of the technical choices to be made.
Today, May 10, 2004 (more than 2 years after the obliged implementation date for the emi-directive), the European Commission releases a consultation paper on the treatment of mobile operators under the E-money Directive. Their conclusion is similar to mine:
According to Member States experts and the Commission services, pre-paid mobile phone cards are likely to be a form of electronic money when they are used to buy and pay third party products or services.
Assuming that it will take some 2-4 years to sort this stuff out, we will eventually have a level playing field for e-money players in 2008.
Better late than never ... (?)
Posted by Simon on 5:26 PM | link
What is play and what is reality in money and payments?
Posted by Simon on 1:50 PM | link
Current weblog List of publications
Retail payments are still very much influenced by local conventions, regulations etc.....
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This weblog serves as an archive of public events in retail payments. It is an individual account which should not be construed as a formal viewpoint of any organisation.
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