Payments and banking with mobile personal devices
Communications of the ACM - Wireless networking security
An empirical study of smart card technology
Information and Management
Competitive One-to-One Promotions
Management Science
Product Customization and Price Competition on the Internet
Management Science
Reengineering money: the Mondex stored value card and beyond
International Journal of Electronic Commerce
Factors affecting payment choices in online auctions: a study of eBay traders
Decision Support Systems
NetPay: An off-line, decentralized micro-payment system for thin-client applications
Electronic Commerce Research and Applications
Personalized Pricing and Quality Differentiation
Management Science
Customer-centric marketing with Internet coupons
Decision Support Systems
Research Note---When Is Versioning Optimal for Information Goods?
Management Science
Adoption of Information Technology Under Network Effects
Information Systems Research
Electronic Payment Systems Evaluation: A Case Study to Examine System Selection Criteria and Impacts
International Journal of Strategic Information Technology and Applications
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With advances in information and other technologies, newer forms of electronic payment schemes such as Google Checkout, NetPay, WebMoney, etc., have emerged over the last decade. These payment schemes are cheaper for sellers as compared to traditional payment schemes such as credit cards. Further, the convenience of credit cards over these alternative payment schemes is not valued the same by all consumers. Inspite of the cost differences between these payment schemes and the consumer heterogeneity in their relative valuations, sellers typically charge the same price from consumers irrespective of the payment scheme. We develop an economic model to examine a seller's incentive to offer discounts to consumers to encourage the use of alternative payment schemes. We find that while a monopolistic seller does find it optimal to offer a discount, offers of such discounts are almost never optimal when two vertically-differentiated sellers compete with each other. Overall, we demonstrate that sellers' desire to not intensify price competition may partly explain why they do not encourage use of newer and cheaper alternative payment schemes by offering discounts to consumers.