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Competition in bank-provided payment services

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  • Bolt, Wilko
  • Humphrey, David

Abstract

Banks supply payment services that underpin the smooth operation of the economy. To ensure an efficient payment system, it is important to maintain competition among payment service providers but data available to gauge the degree of competition are quite limited. We propose and implement a frontierbased method to assess relative competition in bank-provided payment services. Billion dollar banks account for around ninety percent of assets in the US and those with around to billion in assets turn out to be both the most and the least competitive in payment services, not the very largest banks. JEL Classification: G21, L80, L00

Suggested Citation

  • Bolt, Wilko & Humphrey, David, 2013. "Competition in bank-provided payment services," Working Paper Series 1539, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20131539
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    References listed on IDEAS

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    Cited by:

    1. Gabriel Garber & Márcio Issao Nakane, 2015. "The Break of Brand Exclusivity in Brazilian Credit Card Acquiring: effects and markup-cost decomposition in a price dispersion setting," Working Papers Series 390, Central Bank of Brazil, Research Department.

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    More about this item

    Keywords

    banks; competition; frontier analysis; payments;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • L00 - Industrial Organization - - General - - - General

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