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Whither Loose Change: The Diminishing Demand For Small Denomination Currency
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...
Article
Who Pays for Credit Cards?
Chakravorti and Emmons model side payments in a competitive creditâcard 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...
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We are an innovative and creative economic strategy consulting firm that uses data-driven analysis to advise industry participants and policymakers on the evolving financial market services industry. Our experts advise public and private sector decision...
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Why Do Banks Reward Their Customers To Use Their Credit Cards?
Using a unique administrative level dataset from a large and diverse U.S. financial institution, Agarwal, Chakravorti, and Lunn test the impact of rewards on credit card spending and debt. Specifically, we study the impact of...
Article
Why Do We Still Write So Many Checks?
In this article, Chakravorti and McHugh address why consumers, merchants, and financial institutions are reluctant to embrace electronic payments even though electronic payment networks, such as the credit card and automated clearinghouse (ACH) networks, have...
Article
Why Has Stored Value Not Caught On?
In this article, Chakravorti asks why have general-purpose stored-value cards been unsuccessful in penetrating the U.S. market? Three necessary conditions for a payment instrument to be successful are discussed: consumers and merchants need to be...
Article
Why Invest in Payment Innovations?
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...