Analysis of the competition between cash and mobile payments in markets with mobile partnerships.

Abstract

In recent years, the market of retail payment solutions has experienced two major innovations since the introduction of bank cards in the 1960s. One of these innovations concerns the use of electronic money (e-money) recorded in prepaid cards (also called e-purses). As far as the second innovation is concerned, it is closely related to the use of mobile phones as a new means of payment via mobile payment applications (MPAs). Both electronic means ofpayment constitute alternatives to cash and have been designed for points of sale (POS) transactions. Today in retail, consumers can use cash or three electronic payment instruments: bank cards to transfer deposits, e-purses to transfer e-money and MPAs to transfer one or the either. These two kinds of scriptural money (deposits and e-money) which are transferred through a mobile device will be referred to as « mobile money » (M-money)throughout this paper