Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154005
Authors: 
Hasan, Iftekhar
De Renzis, Tania
Schmiedel, Heiko
Year of Publication: 
2013
Series/Report no.: 
ECB Working Paper 1572
Abstract: 
This paper examines the fundamental relationship between retail payments and the real economy. Using data from across 27 European markets over the period 1995-2009, the results confirm that migration to efficient electronic retail payments stimulates the overall economy, consumption and trade. Among different payment instruments, this relationship is strongest for card payments, followed by credit transfers. Cheque payments are found to have a relatively low macroeconomic impact. Retail payment transaction technology itself is also associated positively to real economic aggregates. We also show that initiatives to integrate and harmonise retail payment markets foster trade and consumption and thereby have a beneficial effect for whole economy. Additionally, the findings reveal that the impact of retail payments on the real economy is more pronounced in euro area countries. Our findings are robust to different regression specifications. The study supports the adoption of policies promoting a swift migration to efficient and harmonised electronic payment instruments.
Subjects: 
Financial Development
Real economy
Retail payments
JEL: 
G20
G21
Document Type: 
Working Paper

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