Template-Type: ReDIF-Paper 1.0
Author-Name: Tamás Ilyés
Author-X-Name-First: Tamás
Author-X-Name-Last: Ilyés
Author-Email: ilyest@mnb.hu
Author-Workplace-Name: Magyar Nemzeti Bank (Central Bank of Hungary)
Author-Name: Lóránt Varga
Author-X-Name-First: Lóránt
Author-X-Name-Last: Varga
Author-Email: vargalor@mnb.hu
Author-Workplace-Name: Magyar Nemzeti Bank (Central Bank of Hungary)
Title: A General Equilibrium Approach of Retail Payments
Abstract: In our paper, we introduce the Hungarian Payment System Model (HUPS), a computable general equilibrium model 
with detailed payment services which can be used for policy evaluation and forecast. In the last years, several studies 
investigated different aspects of payment systems and some papers used equilibrium theory to study a specific segment or 
question of retail payments. In our paper, we take a step forward as we extend this research using the general equilibrium 
approach. The HUPS model is a large and highly disaggregated computable general equilibrium model with 25 economic agents and 
nearly 100 payment services, which cover most of the payment system supply chain in Hungary. It contains 7 types of costs for 
each payment service, varying degree of economies of scale, oligopoly and cross-product pricing and agent behaviour adjustments 
to payment method costs. In our model, the payment sector is an integrated part of the economy as every actor has to make payment 
decisions related to its activities. As a result, the model can be used for thorough economic evaluation of many kinds of policies 
and other changes in the field of retail payments. The HUPS model is calibrated on the large and up-to-date information base of Hungarian 
payment statistics, surveys and studies – most notably the Hungarian cost of payments study – which makes it a powerful and robust 
modelling and forecasting tool.
Length: 56 pages
Creation-Date: 2015
File-URL: https://www.mnb.hu/letoltes/mnb-wp-2015-3-final-en.pdf
File-Format: Application/pdf
Number: 2015/3
Classification-JEL: C68, E27, E42.
Keywords: payment economics, CGE modelling, retail payments, cost of payments.
Handle: RePEc:mnb:wpaper:2015/3