Payment research and statistics and the involvement of stakeholders

1

• Payment research and statistics and the
  involvement of stakeholders
• Thijs Kettenis
• Third Macedonian Conference on Payment and
  Securities Settlement Systems
• Ohrid, 29 June 2010

2
Agenda

• Objectives of payments research
• Wholesale payments research
• General overview
• Retail payments research
• General overview
• Dutch Payments Reporting Model
• Involvement of stakeholders
• Why involve stakeholders?
• National Forum on the Payment System
• Results

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Introduction (1)

• Mission of DNB Payments Division
• being a strong and influential central bank which
  promotes the efficiency, safety and accessibility
  of the Dutch payment system
• One of the ingredients Payments Research
• To support our policy and visions
• DNB as a Knowledge Institution

4
Introduction (2)

• Objectives of payments research
• Monitoring and understanding developments
• Analysing consequences of policy alternatives
• Retail and wholesale payments

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Introduction (3)

• Outlets
• DNB policy notes
• DNB Working Paper Series
• DNB Occasional Studies Series
• DNB Quarterly Bulletin
• DNB Annual Report
• DNB Statistical Bulletin
• National and international journals
• Presentations at national and international
  conferences

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Agenda

• Objectives of payments research
• Wholesale payments research
• General overview
• Retail payments research
• General overview
• Dutch Payments Reporting Model
• Involvement of stakeholders
• Why involve stakeholders?
• National Forum on the Payment System
• Results

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Wholesale payments research (1)

• Objectives
• To monitor and understand interbank payment
  behaviour
• To gain an insight into the possible consequences
  of payment incidents
• Finding ways to detect payment stress ahead of
  time
• Types of research
• data analyses
• network topology
• scenario analyses
• experiments

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Wholesale payments research (2)

• Data sources
• TARGET2 transaction records
• Behavioural experiments
• Close cooperation with
• Other DNB divisions
• University of Amsterdam

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Wholesale payments research (3)

• Issues of interest
• How to detect stress in the interbank market
• Behaviour of banks in stress situations
• The impact of individual bank failures on the
  overall payment system
• The current network of financial institutions and
  its evolvement over time

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References

• Heijmans, R. (2009), Simulations in the Dutch
  interbank payment system sensititivity analysis,
  DNB Working Paper, No. 199, De Nederlandsche Bank
  NV, January 2009
• Heijmans, R. and R. Bosman (forthcoming),
  Disruptions in large value payment systems An
  experimental approach, DNB Working Paper in
  progress
• Ledrut, E. (2007), Simulating retaliation in
  payment systems Can banks control their exposure
  to a failing participant?, DNB Working Paper, No.
  133, De Nederlandsche Bank NV, March 2007
• Pröpper, M., I. van Lelyveld and R. Heijmans
  (2008),Towards a network description of interbank
  payment flows, DNB Working Paper, No. 177, De
  Nederlandsche Bank NV, May 2008

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Agenda

• Objectives of payments research
• Wholesale payments research
• General overview
• Retail payments research
• General overview
• Dutch Payments Reporting Model
• Measuring the number of cash payments
• Involvement of stakeholders
• Why involve stakeholders?
• National Forum on the Payment System
• Results

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Retail payments research (1)

• Objectives
• To monitor and understand payment behaviour of
  consumers, retailers and banks
• To anticipate future developments
• To analyse consequences of possible measures

Overview
Preview
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Retail payments research (2)

• Issues of interest
• Costs and benefits of payment instruments
• Perception and usage of payment instruments
• Focus on different consumer groups
• Acceptance of payment instruments by retailers
• Impact of safety and security
• The impact of surcharging
• SEPA Consumers desires and expected costs and
  benefits
• SEPA readiness of corporates and retailers
• Competition and price-making forces
• The role of non-banks
• Authenticity and appearance of banknotes

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Retail payments research (3)

• Data sources
• Consumer, retailer and bank surveys
• Online, telephone and face-to-face questionnaires
• University of Tilburg (DNB Household Panel)
• Research agencies
• National Forum on the Payment System
• Statistics supplied by banks, processors,
  creditcard companies and debitcard scheme
  owner
• Dutch Payments Reporting Model

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Dutch Payments Reporting Model (1)

• DNB is trusted party
• 8 major banks report quarterly on line to
  statistical department DNB
• Not mandatory
• Structured quality control
• Strict deadlines reminder procedures
• Output
• controlled individual data
• accumulated total data for all banks (leveled up
  for whole sector)

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Dutch Payments Reporting Model (2)

• Collected Data
• Credit transfers
• Direct debits
• Debit credit cards
• Accounts
• Infrastructure
• Differentiated
• Users consumers businesses
• Domestic cross border
• Volume value
• Choice of channel

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Dutch Payments Reporting Model (4)

• International contributions

• ECB
• EU
• Wholesale retail payments settlement systems
  
• 15 tables
• Country data
• Comparative data
• Statistical Data Warehouse

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Dutch Payments Reporting Model (5)

• International contributions

• BIS
• 13 developed countries (incl. US Japan)
• Euro area
• Wholesale retail payments,
  settlement data
• 11 tables
• Country data
• Comparative data

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References (1)

• Bolt, W., D. Humphrey and R. Uittenbogaard
  (2008), Transaction pricing and the adoption of
  electronic payments a cross-country comparison,
  International Journal of Central Banking, March
  2008
• Bolt, W., and S. Chakravorti (2008), Consumer
  choice and merchant acceptance of payment media,
  DNB Working Paper, no. 197, De Nederlandsche Bank
  NV, December 2008
• Bolt, W., N. Jonker and C. van Renselaar (2009),
  Incentives at the counter An empirical analysis
  of surcharging card payments and payment
  behaviour in the Netherlands, DNB Working Paper,
  no. 196, De Nederlandsche Bank NV, December 2009
• Bolt, W. and H. Schmiedel (forthcoming) SEPA,
  Welfare and Payment Competition, ECB Working
  Paper in progress
• Brits, J.H. and C.C.A. Winder (2005), Payments
  are no free lunch, DNB Occasional Studies, vol.
  3/no. 2, De Nederlandsche Bank NV, Amsterdam.
• EIM (2007), Het toonbankbetalingsverkeer in
  Nederland kosten en opbrengsten van
  toonbankinstellingen in kaart gebracht,
  Zoetermeer
• Heij, de H. (2009), Banknote Design for the
  Visually Impaired, DNB Occasional Studies, vol.
  6, no. 2, De Nederlandsche Bank NV, Amsterdam
• Heij, de H. (2007), Public Feedback for better
  Banknote Design, DNB Occasional Studies, vol. 5,
  no. 2, De Nederlandsche Bank NV, Amsterdam

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References (2)

• Jonker, N., B. Scholten, M. Wind, M. van Emmerik,
  M. van der Hoeven (2006), Counterfeit or genuine
  can you tell the difference?, DNB Working Paper,
  No.121, De Nederlandsche Bank NV, December 2006,
• Jonker, N. (2007), Payment instruments as
  perceived by consumers a public survey, vol.
  155, issue 3, pages 271-303
• Jonker, N. and T. Kettenis (2007), Explaining
  cash usage in the Netherlands the effect of
  electronic payment instruments, DNB Working
  Paper, no. 136, De Nederlandsche Bank, March.
• Jonker, N. and A. Kosse (2008), Towards a
  European payments market survey results on
  cross-border payment behaviour of Dutch
  consumers, DNB Occasional Studies, Vol. 6, no. 1,
  Amsterdam.
• Jonker, N. and A. Kosse (2009), The impact of
  survey design on research outcomes a case study
  of seven pilots measuring cash usage in the
  Netherlands, DNB Working Paper, no. 221, De
  Nederlandsche Bank, August 2009
• McKinsey Company (2006), Payment services in
  the Netherlands, an analysis of revenues and
  costs for banks, Amsterdam.
• ECB-DNB (2009), Retail Payments Integration and
  Innovation, Conference proceedings of the joint
  conference organised by the ECB and DNB on 25-26
  May 2009

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Agenda

• Objectives of payments research
• Wholesale payments research
• General overview
• Retail payments research
• General overview
• Dutch Payments Reporting Model
• Involvement of stakeholders
• Why involve stakeholders?
• National Forum on the Payment System
• Results

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What is benefit of stakeholders sitting around
the table?

• A lot of market parties and financial authorities
  are involved in the national payment system
• Benefit for market parties
• For users better knowledge of developments and
  possibilities possibility to jointly express
  wishes and concerns
• For banks better knowledge and understanding of
  wishes, needs, possibilities and developments
  possibility to explain developments
• Benefit for central bank
• Not all needs are catered for in purely
  commercial context
• ? Need for cooperation!
• Role for central bank

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The National Forum on the Payment System

• Objective contributing to an efficient
  organisation of the Dutch retail payment system
  from a social point of view
• Issues regarding
• Accessibility
• Efficiency
• Security
• Technological developments

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Mission and objectives

• Making principle agreements about efficiency
  measures and measures with respect to the
  security, availability and accessibility of
  payment services, and standardisation (e.g.
  joint measures to stimulate the use of efficient
  payment products).
• Open and free exchange of ideas about policy
  issues in the area of payment services.
• Holding periodic consultations on the
  bottlenecks and social consequences of
  developments in the payment system.
• Co-operating on the compilation, analysis and
  publication of numerical, non-competitive data.

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Composition

• Chaired by DNB.
• Broadly composed of institutions representing
  providers and users of payment services.
• DNB also performs the secretariat function.
• The Forum meets twice a year.

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Criteria for acceptance

• Organisations need to
• Act on behalf of users or providers of payment
  services that represent the interests of a
  specific group
• Be representative
• Make a professional contribution to realisation
  of a socially efficient payment system

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Participants

• Netherlands Bankers Association
• Council of Dutch Retail Businesses
• Netherlands Association of Small and Medium-sized
  Enterprises
• User Platform for the Payment System
• Dutch Association of Catering Establishments
• Dutch Home Shopping Organisation
• Netherlands Petroleum Industry Association
• The National Consumers Organisation
• Senior citizens association
• Dutch Council of the Chronically Ill and the
  Disabled
• Dutch Organisation of Blind and Partially Sighted
  People
• Observers
• Ministry of Finance
• Ministry of Economic Affairs
• Currence

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Working groups

• The Working Group on Availability and
  Accessibility
• How to safeguard and improve the physical
  availability and accessibility of payment
  services for consumers and entrepreneurs.
• The Working Group on Social Efficiency
• How can social efficiency in the payment system
  be improved
• Cost structures and the effectiveness of
  incentives for efficient payment behaviour in the
  light of technological and social developments

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Working groups

• The Working Group on Security
• How to safeguard the security of the payment
  system, partly with a view to enhancement of
  social efficiency. Its operations encompasses
  both personal security and the security of
  payment products.
• The Consultation Group on SEPA
• To monitor and improve the process of the
  realization of a uniform European payments area,
  and to develop a national change-over and
  communication plan for SEPA

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Results of the National Forum

• Rounding-off to nearest 5 cents
• Solutions for bottlenecks regarding SEPA
  migration
• Agreement on speeding up EMV migration
• Monitoring reports on availability of banking
  services
• Guideline for user-friendly EFTPOS terminals
• Research
• Joint information brochures

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Questions?