Payment card associations offer both debit and credit cards and, until recently, engaged in a tie-in on the merchant side through the so-called honor-all-cards (HAC) rule. The HAC rule came under attack on the grounds that the credit and debit card markets are separate markets and that the associations lever their market power in the “credit card market” to exclude on-line debit cards and there...

When most cardholders swipe a card at a retailer to purchase goods and services, they are probably unaware of what happens behind the scenes between the time the card is swiped and when the merchant is finally paid. There is, however, a detailed set of arrangements between financial institutions that ensure that the merchant is paid and the cardholder’s account debited. Historically, these arra...

We study carding shops that sell stolen credit and debit card information online. By bypassing the anti-scrapping mechanisms they use, we find that the prices of cards depend heavily on factors such as the issuing bank, country of origin, and whether the card can be used in brick-and-mortar stores or not. Almost 70% of cards sold by these outfits are priced at or below the cost banks incur in r...

This case describes how banking in India has changed after developments in information technology in the last decade. The new private and foreign banks, which are strong in technology, are giving tough competition to old public sector banks. Private banks have pioneered Internet banking, phone banking, anywhere banking, mobile banking, debit cards, automatic teller machines (ATMs), and retail b...

Rapid innovation is changing the array of financial services and payment options available to customers. To examine the driving forces behind the surge of innovation and the adoption of new technology, the Payment Cards Center and the Research Department of the Federal Reserve Bank of Philadelphia hosted a conference on “Innovation in Financial Services and Payments” on May 16-17 of this year.

Responding to the PIN cracking attacks from Berkman and Ostrovsky (FC 2007), we outline a simple solution called salted-PIN. Instead of sending the regular user PIN, salted-PIN requires an ATM to generate a Transport Final PIN from a user PIN, account number, and a salt value (stored on the bank card) through, e.g., a pseudo-random function. We explore different attacks on this solution, and pr...

Despite growing evidence that many US households are liquidity constrained, there remains little consensus on the quantitative importance or nature of these constraints. This paper develops a new type of evidence on the impacts of consumer credit markets on behavior by examining household-level responses to an exogenous liquidity shock. A United States Supreme Court decision effectively deregul...

This paper describes an on-going e-government pilot project to implement an electronic child support disbursement system in the state of Indiana. The new electronic disbursement system is designed to replace the current paper-based check system with a dual electronic system of direct bank deposits for custodial parents with bank accounts and commercial debit cards with a MasterCard logo for unb...

Purpose: The study aimed to investigate Greek consumers' attitudes and actual behavior toward virtual bank cards show whether Experimental Economics can incentivize these banking products.Methodology: For data collection, a specially designed experiment was conducted among consumer samples according Nudging Theory principles. Econometric analysis through Multi-level Models Bivariate statistical...