CÍMLAP
Turján Anikó [et al.]
Nothing is free
CONTENTS, ABSTRACT
Contents
Abstract
Summary
1 Background, introduction
2 Turnover data for the main domestic payment instruments
3 General description of the methodology
3.1 Definition and participants of the payment chain
3.2 Social costs vs. private costs
3.3 Description of the methodology chosen by the ECB and the MNB
4 current cost situation
4.1 Cash
4.2 Payment cards (debit and credit cards)
4.3 Credit transfers
4.4 Direct debits
4.5 Business-to-business (B2B) direct debits
4.6 Postal inpayment money orders
4.7 Postal outpayment money orders for pensions
4.8 Summary of the estimated social cost of the analysed payment instruments
4.9 Summary of net private costs by stakeholder
5 Potential social savings (efficiency improvement) through the more efficient selection of payment instruments
5.1 High volume substitution of cash transactions with debit card transactions in the retail sector
5.2 Shifting of paper-based remote payment instruments orders to electronic channels in the private sector
5.3 Shifting of pension outpayments to bank accounts
5.4 Estimation of total savings achievable through the modernisation of payments
5.5 Other non-quantified improvements in efficiency
5.6 The hypothetical cost situation
6 Summary of international experience
6.1 Results of foreign social cost surveys
6.2 International regulatory initiatives and research serving the improvement of the efficiency of the choice of payment instruments
7 impeding factors identified in Hungarian legal regulations
7.1 Uncertainty linked to cash as legal tender
7.2 Regulation of the method of wage payment
7.3 Public utility and telecommunications services subject to administrative pricing
8 Policy conclusions
8.1 Substitution of cash payments in the retail sector with a maximum number of possible payment card payments
8.2 Improvement of the efficiency of remote payments
8.3 Development of infrastructure and legal environment
Annex
Annex 1: Questionnaires used in the survey
Annex 2: List of credit institutions and cash-in-transit companies participating in the survey
Annex 3: Sub-elements of the first and second round corporate sample
Annex 4: Household/consumer sample
Annex 5: Distribution of the social cost of payment instruments according to fixed and variable costs
References
Abstract
The study applies two approaches for the estimation of the social costs of main payment instruments (cash, debit card and credit card transactions, credit transfers, direct debits, business-to-business direct debits, postal inpayment money orders, postal outpayment money orders for pensions) used in Hungary in 2009. The first approach is based on the current payment structure, while the second approach is based on a more modern, hypothetical payment structure involving less cash, with no use of paper-based methods. In the first approach, the social cost amounts to HUF 388 billion, i.e. 1.49% of the GDP, while in the second approach, such cost amounts to HUF 285 billion, i.e. 1.09% of the GDP. In this context, social cost means the use of all resources (time, materials and money) necessary for the execution of payments, calculated as a net value (i.e. exclusive of fees paid for payment services). Thus, HUF 103 billion could be saved in social costs if the use of payment instruments were to be modified.