Author(s): Sergey Sarkisyan
Looking for co-authors: No { message_status }
I study how financial technology reshapes competition among banks. I exploit quasi-random variation in exposure to the introduction of Brazil's Pix, an instant payment system, and show that instant payments increase deposit competition. Small bank deposits rise relative to large banks because Pix allows small banks to offer payment convenience more similar to large banks. Since they become more competitive providing payment services, small banks reduce deposit rates relative to large banks. Finally, I estimate a deposit demand model and find that depositors' welfare increases with Pix. These findings suggest that universally available payment systems can foster banking competition.
Repository Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4176990
Published: 2024-12-28 13:25:59 PT
Stage: Working Paper
Fields: Financial Economics, Industrial Organization
Research Group(s): Playground
Referee Reports: No referee reports yet. (Add your report)
Versions: v1 (12/28/2024)