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    The document discusses whether prices reflect costs in the Swedish payment market and analyzes the Riksbank's interest in monitoring payment market developments. It finds that consumers do not receive accurate price signals when choosing payment instruments, as prices do not equal marginal costs and cross subsidies exist. This likely leads consumers to choose cash and credit/charge cards over more efficient options like debit cards and electronic payments.

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    The document discusses whether prices reflect costs in the Swedish payment market and analyzes the Riksbank's interest in monitoring payment market developments. It finds that consumers do not receive accurate price signals when choosing payment instruments, as prices do not equal marginal costs and cross subsidies exist. This likely leads consumers to choose cash and credit/charge cards over more efficient options like debit cards and electronic payments.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    12 views6 pages

    The Swedish Payment

    Uploaded by

    mohislhad
    The document discusses whether prices reflect costs in the Swedish payment market and analyzes the Riksbank's interest in monitoring payment market developments. It finds that consumers do not receive accurate price signals when choosing payment instruments, as prices do not equal marginal costs and cross subsidies exist. This likely leads consumers to choose cash and credit/charge cards over more efficient options like debit cards and electronic payments.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    of 6

    Do Prices

    Reflect Costs
    in the Swedish
    Payment
    Market?
    Gabriela Guibourg, November 10 2004
    Why is the Riksbank
    interested in this issue?
    „ Oversight responsibility – monitor
    developments in the market
    „ Policy goals: stability and efficiency
    „ Crude efficiency indicators:
    - use of cash
    - share of electronic payments
    „ Swedish performance different from other
    Nordic countries
    The evolution of the card payment
    market in the Nordic countries
    100 100

    80 80

    60 60

    40 40

    20 20

    0 0
    1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

    Sweden Finland Norway Denmark


    The use of cash – M0/GDP
    5% 5%

    4% 4%

    3% 3%

    2% 2%

    1% 1%

    0% 0%
    1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
    Sweden Finland Norway Denmark
    Do users get correct price signals
    in the choice of payment
    instruments?
    „ Efficiency: price = marginal cost
    „ Is not true for a large number of payment
    instruments
    „ Private customers get worse information
    through the price structure than corporate
    customers
    „ Financing of payment services through
    cross subsidies.
    Policy discussion
    „ Consumers do not receive price signals in
    their choice of payment instrument.
    „ If they did, they would to a larger extent
    chose:
    - debit cards before cash
    - debit cards before credit/charge cards
    - direct debits and electronic credit
    transfers
    before paper based

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