Retail payments: integration and innovation

A joint conference by the European Central Bank and De Nederlandsche Bank

Frankfurt am Main, 25 - 26 May 2009

About

The European retail payment market is in the middle of a transition phase. The creation of the Single Euro Payments Area (SEPA) represents an important step in the completion of Europe’s monetary union. SEPA will have a decisive influence on Europe’s future payments landscape as it accelerates the development of the continent’s retail payments market into increasingly integrated and consolidated market structures. The increasing speed of technological developments will require SEPA participants to be flexible in their business activities and to be open to new ideas.

Given these fundamental changes, it is important to understand the economics driving future developments and to take a forward-looking perspective anticipating the factors that are likely to affect payment developments.

The four major themes covered by the conference are:

• Theme 1: Relevance of retail banking and payments for banks’ profitability
• Theme 2: Integration, competition and regulation of the retail payments market
• Theme 3: Payment habits and adoption of payment innovations
• Theme 4: The future of the retail banking and payments market

Further information:

• The full programme of the conference
• The list of contributors

Opening remarks

Jean-Claude Trichet (President, European Central Bank) full speech

Theme 1: Relevance of retail banking and payments for banks’ profitability

Chair: Lucas Papademos (Vice-President, European Central Bank)

Keynote speech:

Profit earner or cost driver? A combined view of retail banking and payments

Bertrand Lavayssière (Capgemini)

Presentation

Academic session

Return to retail banking and payments

Iftekhar Hasan (Rensselaer Polytechnic Institute and Bank of Finland)
Heiko Schmiedel (European Central Bank)

Liang Song (Rensselaer Polytechnic Institute)

• Presentation
• Paper

Payment Scale Economies, Competition, and Pricing

David B. Humphrey (Florida State University)

• Presentation
• Paper

Comments

Barry Scholnick (University of Alberta)

Presentation

Theme 2: Integration, competition and regulation of the retail payments market

Academic session

Chair: Damien Neven (European Commission)

The costs and benefits of interchange fee regulation: An empirical investigation

Santiago Carbó Valverde (University of Granada and Federal Reserve Bank of Chicago)
Sujit Chakravorti (Federal Reserve Bank of Chicago)

Francisco Rodríguez Fernández (University of Granada)

• Presentation
• Paper

Credit card interchange fees

Jean-Charles Rochet (University Toulouse I)
Julian Wright (National University of Singapore)

• Presentation
• Paper

Comments

Charles M. Kahn (University of Illinois at Urbana Champaign)

Presentation

Academic session

Chair: Andreas Dostal (Oesterreichische Nationalbank)

Issues in retail payment systems in emerging markets: the World Bank perspective

Massimo Cirasino (The World Bank)

• Presentation
• Paper 1
• Paper 2

EU retail banking: measuring integration

Stefan Schäfer (Deutsche Bank Research)

• Presentation
• Paper

Comments

Nicole Jonker (De Nederlandsche Bank)

Presentation

Keynote speech

Competition and regulation in retail banking and payment markets

Neelie Kroes (Commissioner for Competition, European Commission)

Full speech

Panel session

The future of retail banking and payments - Developments in global markets and the role of central banks

Chair: Gertrude Tumpel-Gugerell (Member of the Executive Board, European Central Bank)
Pentti Hakkarainen (Deputy Governor, Bank of Finland) - Presentation
Thomas M. Hoenig (President, Federal Reserve Bank of Kansas City)

Randall S. Kroszner (University of Chicago)
LING Tao (Deputy Governor, The People’s Bank of China)

Academic session

Chair: Michele Bullock (Reserve Bank of Australia)

Pricing payment cards

Özlem Bedre (Toulouse School of Economics)
Emilio Calvano (Toulouse School of Economics and Harvard University)

• Presentation
• Paper

Payment card competition and SEPA

Wilko Bolt (De Nederlandsche Bank)
Heiko Schmiedel (European Central Bank)

• Presentation
• Paper

Comments

Jean-Charles Rochet (University Toulouse I)

Presentation

Academic session

Chair: Huw Pill (European Central Bank)

Costs in the Norwegian payment systems 2007

Olaf Gresvik (Norges Bank)
Harald Haare (Norges Bank)

• Presentation
• Paper

How effective are reward programs in promoting payment instruments: payment card usage? Empirical evidence

José M. Liñares-Zegarra (University of Granada)
Santiago Carbó Valverde (University of Granada and Federal Reserve Bank of Chicago)

• Presentation
• Paper

Comments

Harry Leinonen (Suomen Pankki)

Presentation

Dinner speech

Hermann-Josef Lamberti (Member of Management Board, Deutsche Bank)

Theme 3: Payment habits and adoption of payment innovations

Keynote speech

The impact of payment innovations on central banking

Lex Hoogduin (Member of the Executive Board, De Nederlandsche Bank)

Speech

Panel Session

New payment instruments - requirements and expectations of large users

Chair: Lance Blockley (Edgar, Dunn & Company)
Olivier Brissaud (European Association of Corporate Treasurers and Volkswagen Group Services)

Mark Buitenhek (ING)
Lucinio Muñoz Muñoz (Ministry of Economic Affairs and Finance, Spain)
Renzo Vanetti (SIA SSB)
Martin Winkler (Schwabe, Ley & Greiner) Presentation

Academic session

Chair: Charles M. Kahn (University of Illinois at Urbana Champaign)

Choosing and using payment instruments: Evidence from German micro-data

Ulf von Kalckreuth (Deutsche Bundesbank)
Tobias Schmidt (Deutsche Bundesbank)

Helmut Stix (Oesterreichische Nationalbank)

• Presentation
• Paper

Credit card use after the final mortgage payment: does the magnitude of income shocks matter?

Barry Scholnick (University of Alberta)

• Presentation
• Paper

Comments

Cyril Monnet (Federal Reserve Bank of Philadelphia)

Presentation

Academic session

Chair: Coen Voormeulen (De Nederlandsche Bank)

Reassessing the "threat" of e-money: New evidence from the euro area

Matthew Greenwood-Nimmo (Leeds University Business School)

• Presentation
• Paper

Factors determining the acceptance of payment methods by online shops in Poland

Michal Polasik (Nicolaus Copernicus University)
Piotr Fiszeder (Nicolaus Copernicus University)

• Presentation
• Paper

Comments

Leo van Hove (Free University of Brussels)

Presentation

Keynote speech

Innovations in retail payments

Lance Blockley (Edgar, Dunn & Company)

• Presentation
• Paper

Panel Session

Payment innovations - opportunities and challenges of new payment instruments

Chair: Daniela Russo (European Central Bank)
Brent Bellm (PayPal Europe)

Jürgen Bott (University of Applied Sciences, Kaiserslautern)
Gerard Hartsink (European Payments Council)
Maria Chiara Malaguti (University of Salento and World Bank)
Karim Taga (Arthur D. Little) Presentation

Theme 4: The future of the retail banking and payments market

Closing Panel

Lessons learned from the financial turmoil and outlook for the European retail banking and payments market

Chair: Gertrude Tumpel-Gugerell (Member of the Executive Board, European Central Bank)
Giovanni Carosio (Member of the Governing Board, Banca d’Italia)

Christian Noyer (Governor, Banque de France)
Peter Praet (Nationale Bank von België/Banque Nationale de Belgiuqe)
Ivan Šramko (Governor, Národná banka Slovenska) - Presentation

Further featured papers

What drives the network's growth? An agent-based study of the payment card market

Biliana Alexandrova-Kabadjova (Banco de Mexico)
José Luis Negrîn (Banco de Mexico)

Paper