Cost-Based Pricing of Payment Instruments: The State of the Debate

Posted: 30 Mar 2004

See all articles by Leo Van Hove

Leo Van Hove

Vrije Universiteit Brussel (VUB)

Abstract

Earlier I have argued in favour of explicit cost-based pricing of payment instruments. This article analyses new cost estimates for the Netherlands, and provides an overview of positions recently taken by important actors such as central banks and the European Commission. The new cost estimates strengthen the case for e-money. The central bank reports indicate that many are now convinced that a transparent pricing structure can increase efficiency. The Commission, on the other hand, seems unlikely to allow commercial banks to make a coordinated move towards cost-based pricing in order to break the deadlock in which they find themselves today.

Keywords: cash, cost-based pricing, electronic purse, electronic money, payment instruments

JEL Classification: E4

Suggested Citation

Van Hove, Leo, Cost-Based Pricing of Payment Instruments: The State of the Debate. Available at SSRN: https://ssrn.com/abstract=521302

Leo Van Hove (Contact Author)

Vrije Universiteit Brussel (VUB) ( email )

Department of Applied Economics (APEC)
Pleinlaan 5
Brussels, B-1050
Belgium
+32 2 614 84 49 (Phone)

HOME PAGE: http://research.vub.ac.be/applied-economics/members

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