Abstract

http://ssrn.com/abstract=2379233
 


 



The Ethics of Payments: Paper, Plastic, or Bitcoin?


James Angel


Georgetown University - Department of Finance

Douglas M. McCabe


Georgetown University - Department of Management

January 14, 2014


Abstract:     
Individuals and businesses make billions of payments every day in various forms. Payers have choices about what forms of payment they will make, and payees also have some flexibility on what they will accept. Different forms of payment involve different costs and benefits for both the payer and the payee. Can it be unethical to use a particular form of payment? Can a payment system like bitcoin be “evil,” as charged by Krugman (2013)? Or does it provide a means for a more trustworthy means of payment? What are the ethical implications of paying workers with one form of payment, such as a fee-laden payroll card, over another? What are the ethical implications of choosing a payment tool, such as a rewards credit card, that imposes higher costs on the merchant? The differential nature of bargaining power between the users and operators of the dominant payment networks also raise ethical questions regarding the fairness of charges in such asymmetric power situations. A payment system, like any tool, is not “evil” by itself; it is the use that matters.

Number of Pages in PDF File: 20

Keywords: Financial ethics, payments; interchange fees, debit cards, credit cards, payment cards, scrip, exploitation, bitcoin

JEL Classification: E42

working papers series


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Date posted: January 16, 2014  

Suggested Citation

Angel, James and McCabe, Douglas M., The Ethics of Payments: Paper, Plastic, or Bitcoin? (January 14, 2014). Available at SSRN: http://ssrn.com/abstract=2379233 or http://dx.doi.org/10.2139/ssrn.2379233

Contact Information

James J. Angel (Contact Author)
Georgetown University - Department of Finance ( email )
McDonough School of Business
Washington, DC 20057
United States
202-687-3765 (Phone)
202-687-4031 (Fax)

Douglas M. McCabe
Georgetown University - Department of Management ( email )
3700 O Street, NW
Washington, NY 20057
United States

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