Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211821 
Year of Publication: 
1998
Series/Report no.: 
Bank of Finland Discussion Papers No. 21/1998
Publisher: 
Bank of Finland, Helsinki
Abstract: 
We develop a theoretical framework aimed to model the pricing of electronic money (electronic cash cards) and the market domain in which it will be used.We first calculate the fee structures of electronic cash- and charge-card industries for the monopoly and competitive cases.We show that the different market structures do not affect the domain of electronic cash cards and the displacement of currency in daily transactions.We provide a welfare analysis to determine whether a market equilibrium generates an underutilization or overutilization of the electronic cash cards relative to currency.Finally, we evaluate the threshold investment costs, both general and POS-specific, which would prevent the emergence of this industry.
Subjects: 
Electronic Money
Smart Cards
Displacement of currency
Persistent Identifier of the first edition: 
ISBN: 
951-686-591-7
Document Type: 
Working Paper

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