Greater digitization of commerce has brought enormous benefits to businesses and consumers. By using digital payment capabilities and online marketplaces, many micro, small, and medium enterprises (MSMEs) are more able to compete with larger firms through greater customer choice and reach. This paper examines the results of a Visa Economic...
In this report, Biasi and Chakravorti study the rapidly growing although extremely volatile initial coin offering (ICO) market. We identify which traditional markets are being disrupted by ICOs. We discuss the necessary infrastructure needed to support this market. We analyze market dynamics in terms of volatility, global presence, the impact...
A core function of any banking system is the provision of payments. However, a greater number of non-banks are becoming part of the payments landscape. Payments can be made via fiat or crypto currencies, bank credit or deposits, or funds transfers on the books of non-bank payment providers. Most of...
Carbó, Chakravorti, and Rodriguez study the impact of lowering interchange fees on consumer and merchant adoption and usage along with bank revenues during a ten-year period in Spain using bank-level data. Using cutting-edge econometric techniques, they are able to test two-sided market model predictions about payment card pricing policies. They...
Chakravorti and To construct a two-period model to study the interactions among consumers, merchants, and a card issuer. The model yields the following results. First, if the issuer's cost of funds is not too high and the merchant's profit margin is sufficiently high, in every equilibrium of our model the...
Over the last decade, consumers have tripled their use of credit cards as more merchants have increased their acceptance of them. This increase suggests that incentives in today’s marketplace favor greater credit card use by consumers and acceptance by merchants. In this paper, Chakravorti and Shah study the set of...