Efficient Pricing of Large Value Interbank Payment Systems

Jean Rochet and Cornelia Holthausen ()

No 3943, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper studies the efficient pricing of large-value payment systems in the presence of unobservable heterogeneity across banks. It is shown that the optimal pricing scheme for a public monopoly system involves quantity discounts in the form of a decreasing marginal fee. This is also true when the public system competes with a private system characterized by a lower marginal cost. In this case, however, optimal marginal fees in the public system are lower than its marginal cost, and fixed fees have to be levied. We also study the case of competition between several public systems. The structure of the optimal tariff depends on the willingness of Central Banks to allow by-pass.

Keywords: Payment systems; Non-linear pricing (search for similar items in EconPapers)
JEL-codes: E58 G28 (search for similar items in EconPapers)
Date: 2003-06
New Economics Papers: this item is included in nep-cfn
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Efficient Pricing of Large Value Interbank Payment Systems (2006)
Working Paper: Efficient Pricing of Large Value Interbank Payment Systems (2003)
Working Paper: Efficient pricing of large value interbank payment systems (2002)
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