Competition in Bank-Provided Payment Services

28 Pages Posted: 11 May 2013  

Wilko Bolt

De Nederlandsche Bank (Dutch Central Bank); VU University Amsterdam

David B. Humphrey

Florida State University - Department of Finance

Multiple version iconThere are 3 versions of this paper

Date Written: May 4, 2013


Banks supply payment services that underpin the smooth operation of the economy. To ensure an efficient payment system, it is important to maintain competition among payment service providers, but data available to gauge the degree of competition are quite limited. We propose and implement a frontier- based method to assess relative competition in bank-provided payment services. Billion dollar banks account for around 90 percent of assets in the U.S., and those with around $4 to $7 billion in assets turn out to be both the most and the least competitive in payment services, not the very largest banks.

Keywords: Payments, competition, banks, frontier analysis

JEL Classification: G21, L80, L00

Suggested Citation

Bolt, Wilko and Humphrey, David B., Competition in Bank-Provided Payment Services (May 4, 2013). FRB of Philadelphia Working Paper No. 13-17. Available at SSRN: or

Wilko Bolt (Contact Author)

De Nederlandsche Bank (Dutch Central Bank) ( email )

P.O. Box 98
1000 AB Amsterdam

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV

David B. Humphrey

Florida State University - Department of Finance ( email )

Tallahassee, FL 32306-1042
United States
850-644-7899 (Phone)
850-668-6696 (Fax)

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