Payment Instrument Choice: The Case of Prepaid Cards

15 Pages Posted: 5 Jun 2006

See all articles by Sujit Chakravorti

Sujit Chakravorti

Chakra Advisors LLC

Victor Lubasi

Federal Reserve Bank of Chicago

Abstract

The costs and benefits to payment system participants can differ depending on which payment mechanism is used. The authors specifically explore the costs and benefits of prepaid card applications versus other payment instruments, such as cash, checks, and debit cards, for certain payment segments, including gift, payroll, and employer-initiated and government benefit programs.

Keywords: prepaid cards, payment systems, incentives, Central Banks and Their Policies, Transactional Relationships, Contracts and Reputation, Networks, Firm Behavior,

Suggested Citation

Chakravorti, Sujit and Lubasi, Victor, Payment Instrument Choice: The Case of Prepaid Cards. Economic Perspectives, Second Quarter, 2006, Available at SSRN: https://ssrn.com/abstract=906576

Sujit Chakravorti (Contact Author)

Chakra Advisors LLC ( email )

3445 Deer Ridge Drive
Danville, CA 94506
United States

Victor Lubasi

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States
312-322-2366 (Phone)

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