In this keynote presentation, Bob Chakravorti discusses how FinTech and big tech firms are increasing competition in the payments space. Entry into payments, often allows these non-bank providers the ability to offer loans to underserved consumers and small merchants. In the rest of the talk, Chakravorti discusses the effectiveness of...
Using random forest estimation, we identify 14 key predictors out of 190 variables with the largest predictive power for MSMR adoption and usage of digital payments. Using conditional inference trees, we study the importance of sequencing and interactions of various factors such as public sector initiatives, technological advancements, and private...
The adoption of electronic payments and their frequent use is thought of as a first step for broader financial use for traditionally unbanked individuals and merchants. The purpose of this report is to analyze the design, implementation, and efficacy of many incentives implemented by different types of stakeholders around the...
In his testimony, Bob Chakravorti elaborated on the following areas: first, the state of the economic literature on the costs and benefits of capital regulation; second, the enormous changes that we have seen post-crisis in the bank capital regulatory landscape and the ensuing changes to the quality and quantity of...
Bob Chakravorti discusses surcharging and honor-all-cards rules for payment cards. Generally, merchants charge the same price regardless of the type of payment instrument used to make purchases. In many jurisdictions, merchants are not allowed to add a surcharge for payment card transactions because of legal (some states in the U.S...
While payment card usage has increased dramatically, the stock of outstanding currency has not declined as rapidly. Amromin and Chakravorti analyze changes in cash demand for 13 advanced economies from 1988 to 2003 by separating cash into three denomination categories to disentangle its store of wealth and payment functions. Defining...
Chakravorti and Jankowski summarize the 2005 Chicago Payments conference. The migration to more efficient payment mechanisms is affected by innovations, incentives, and regulations. While advances in technology have yielded numerous payment method alternatives, many have not been widely adopted. A Chicago Fed conference explored why certain payment innovations have been...
Chakravorti and Kobor provide a framework to study the creation and adoption of innovations by payment providers and processors. The authors identify several motivating factors for banks and nonbanks to invest in payment innovations. In addition, they discuss the evolutionary process of payment innovations from inception to commoditization and recognize...
Chakravorti and Emmons model side payments in a competitive credit‐card market. If competitive retailers absorb the cost of accepting credit cards by charging a higher goods price to everyone, then someone must subsidize convenience users of credit cards to prevent them from defecting to merchants who do not accept cards...
Chakravorti investigates payments system reforms begun by the Bank of Mexico in 1994. The goals of these reforms are to reduce the amount of uncollateralized intraday credit extended by the Bank of Mexico (previously unlimited), to promote a market-based allocation of intraday credit for interbank payments, and to move large-value...