Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212014 
Authors: 
Year of Publication: 
2005
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 16/2005
Publisher: 
Bank of Finland, Helsinki
Abstract: 
The developed world exhibits substantial but poorly understood differences in the efficiency and quality of low-value payment services.This paper compares payments arrangements in the UK, Norway, Sweden, and Finland, and discusses the impact of network effects on incentives to adopt new payments technology.A model is presented, in which private benefits for investment in shared inter-bank payments infrastructure are weak.In contrast, due to 'account externalities', there are strong incentives for investment in intra-bank payment systems.These two features, distinguishing bank payments from other network industries, can help explain some of the observed cross country differences in payments arrangements.
Subjects: 
network effects
incentives
payment technology
externalities
JEL: 
G21
L14
Persistent Identifier of the first edition: 
ISBN: 
952-462-223-8
Document Type: 
Working Paper

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