Do Prices Reflect Costs? A study of the price- and cost structure of retail payment services in the Swedish banking sector 2002

Gabriela Guibourg () and Björn Segendorf ()
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Gabriela Guibourg: Financial Stability Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Björn Segendorf: Financial Stability Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden

No 172, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: We estimate private costs in the Swedish banking sector for the production of payment services and investigate to what extent the price structure reflects the estimated cost structure. We find that (i) banks tend to use two-part tariffs but (ii) variable costs are poorly reflected in transaction fees towards both consumers and corporate customers. (iii) there exist large cross subsidies between different payment services, foremost from acquiring card payments to cash distribution to the public, while payment services as a whole is not subsidized.

Keywords: retail payments; two-part tariffs; private costs; price structure; economies of scale (search for similar items in EconPapers)
JEL-codes: E58 G21 L11 L13 L14 L89 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2004-10-01
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0172

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