Card Acceptance Research Articles

SEPA, Efficiency, and Payment Card Competition

This paper analyzes the welfare implications of creating a Single Euro Payments Area. We study the effects of increased network compatibility and payment scale economies on consumer and merchant card fees and its impact on card usage. In particular, we model competition among debit cards and between debit and credit cards. We show that competitive pressures dampen merchant fees and increase total card acceptance. The paper argues that there is room for multilateral interchange fee arrangements to achieve optimal consumer and merchant fees, taking safety, income uncertainty, default risk, merchant's pricing power, and the avoided cost of cash at the retailers side into account. Consumers and merchants are likely to benefit the most from the creation of SEPA when sufficient payment card competition alleviates potential monopolistic tendencies.

Regulating Two-Sided Markets: An Empirical Investigation

We study the effect of government encouraged or mandated interchange fee ceilings on consumer and merchant adoption and usage of payment cards in an economy where card acceptance is far from complete. We believe that we are the first to use bank-level data to study the impact of interchange fee regulation. We find that consumer and merchant welfare improved because of increased consumer and merchant adoption leading to greater usage of payment cards. We also find that bank revenues increased when interchange fees were reduced although these results are critically dependent on merchant acceptance being far from complete at the beginning and during the implementation of interchange fee ceilings. In addition, there is most likely a threshold interchange fee below which social welfare decreases although our data currently does not allow us to quantify it.

Regulating Two-Sided Markets: An Empirical Investigation

We study the effect of government encouraged or mandated interchange fee ceilings on consumer and merchant adoption and usage of payment cards in an economy where card acceptance is far from complete. We believe that we are the first to use bank-level data to study the impact of interchange fee regulation. We find that consumer and merchant welfare improved because of increased consumer and merchant adoption leading to greater usage of payment cards. We also find that bank revenues increased when interchange fees were reduced although these results are critically dependent on merchant acceptance being far from complete at the beginning and during the implementation of interchange fee ceilings. In addition, there is most likely a threshold interchange fee below which social welfare decreases although our data currently does not allow us to quantify it. JEL Classification: L11, G21, D53

The choice at the checkout: Quantifying demand across payment instruments

Dramatic changes have occurred in the U.S. payment system over the past two decades, most notably an explosion in electronic card-based payments. This shift has led to a series of policy debates driven in part by consumers' choice of payment instruments. Using a new nationally representative survey, we transform consumer responses to open-ended questions into product rankings and estimate a characteristics-based rank-order logit model in order to quantify consumer substitution among payment methods. Our estimates are then used to conduct supply-driven and demand-driven counterfactual experiments in order to estimate market share and cost effects. From a counterfactual experiment in which merchants stop accepting credit cards, we predict merchant costs to decline substantially. Because merchants accept credit cards nonetheless, we regard our finding as evidence either that the credit card networks hold market power, or that merchants experience unmeasured intangible benefits from credit card acceptance. We also predict that contactless debit will take market share from cash, checks, and credit, and that the age/cohort effect alone is unlikely to cause debit card use to increase substantially over a 10-year period.

Developing Java Card Applications with B

This work proposes a methodology for the rigorous development of Java Card smart card applications, using the B Method. Its main feature is to abstract the particularities of Java Card and smart card aware applications from the specifier as much as possible. In the proposed approach, the specification of the aplication logic needs not be preoccupied with the specific aspects of the Java Card platform (in particular, communication between the card acceptance device and the smart card itself). Platform-specific code can then be automatically generated during the refinement and code generation process. An interesting side-effect of this approach is that the specification may be reused with any other platform of implementation.

Use of an infection control pocket reference card for healthcare providers in a university-based medical center

ISSUE: There is a great need for continual education and reinforcement of infection control (IC) practices that is rapid and easily accessible. This is particularly true in large medical centers where the number and turnover of house staff and employees is substantial. These issues contributed to the need for an easy, point-of-care reference card for isolation categories and IC policies. Enhanced collaboration between the healthcare providers and the IC team is also needed. PROJECT: Pocket-sized reference cards focused on IC topics were developed. Two versions were created, the first one aimed at physicians and the second at other frontline healthcare professionals, particularly nursing staff. Both versions of the card contain descriptions of the Centers for Disease Control and Prevention (CDC) isolation categories including organism-specific guidelines, the manner in which isolation may be discontinued, certain protocols, important reminders, and IC contact information. The physician card contained additional detailed information regarding Tuberculosis isolation. The cards were distributed at staff orientation, during formal educational lectures, and at the point of care by the IC team. The intent of the cards was to aid the healthcare provider in making accurate and timely decisions regarding IC at the point of care. RESULTS: To date, 600 physician and 1200 heathcare professional cards have been distributed throughout the medical center. The cards have been strongly accepted by the medical and nursing staff. Several patient care units requested additional cards and had them laminated for the staff. Subjectively, there has been a decrease in the number of calls to IC regarding basic isolation procedures. IC staff is beginning to be seen as an important part of the patient care team. This is imperative as governmental and patient safety organizations are looking for evidence that IC is an active member of the healthcare team. LESSONS LEARNED: The card's acceptance and ease of use demonstrates the need for more quick reference and educational material that focuses on IC policies and practices. The success of this basic intervention suggests that other modes of information delivery, such as use of personal data assistant (PDA) devices and an IC Website, may also be useful tools for dissemination of IC-related information.

A sociotechnical approach to smart card systems design: An Australian case study

Sociotechnical theory represents an important frontier as an effective design tool for new technology. This paper suggests a working model for adopting the objectives of sociotechnical principles for smart card systems design. As an example, a case study based on the collective design practices of Australian firms known to be using smart card is presented. It is found that we are witnessing the birth of a new capacity of Australian firms to understand in a practical way, how sociotechnical knowledge can be applied. It is concluded that current smart card design practices of Australian firms are not responsible for the limited success of attempts by Australian firms to introduce smart card technology. Rather, it is suggested that there are good economic and organizational reasons why smart card acceptance and use in Australia may have been inhibited. Some important challenges that must be addressed have been noted.

Correlates of credit card acceptance and usage in an advanced developing Middle Eastern country

Past studies indicate that there is a close relationship between spread of credit card usage in a country and its stage of socio‐economic development. With increased level of socio‐economic and technological development, credit card usage particularly increases in developing countries. Studies credit card usage behavior in an advanced developing country – Turkey. An empirical research study conducted in urban Turkey indicates that there are certain relationships between socio‐economic and demographic characteristics of Turkish consumers and their credit cardholding and usage behaviors. In light of the survey findings, offers a number of marketing strategy guidelines for credit card issuers in developing countries to remain competitive as well as creating more market growth opportunities in this growing service industry.

Bank Interchange of Transactional Paper: Legal and Economic Perspectives

Bank Interchange of Transactional Paper: Legal and Economic Perspectives

Stored Program Controlled Network: Calling Card Service-Human Factors Studies

Many new telephone services involve more customer-system interaction than ever before, and making these services easy to use and error-free is a major development goal. Properly designed dialing plans, announcements, timing, tones, and instructions increase customer acceptance and minimize errors. These new services are designed from systematic analyses of present services, interviews with customers, laboratory studies of user-system interactions, field trials, and product follow-ups. Calling Card Service automates credit card service and allows the customer to bill a call to a special billing number, without an operator, from Touch-Tone∗ dialing phones. Based on a series of studies, the market need for Calling Card Service was established and the customer-machine interface was designed. An analysis of operator-assisted credit card service indicated that credit card calls could be automated. Interviews with customers verified an interest in, and a need for, Calling Card Service. Moreover, laboratory studies indicated that customers could use the Calling Card Service successfully. In turn, these studies led to the design of a field trial, which combined and extended earlier studies and verified Calling Card Service performance and acceptance by customers.