Instant Payment Systems and Competition for Deposits

102 Pages Posted: 4 Aug 2022 Last revised: 27 Sep 2023

See all articles by Sergey Sarkisyan

Sergey Sarkisyan

The Wharton School, University of Pennsylvania

Date Written: September 25, 2023


How do instant payment systems impact the banking landscape? I exploit quasi-random variation in exposure to the introduction of Pix in Brazil, an instant payment technology, to estimate that instant payments increase deposit market competition – small bank deposits rise relative to large banks. Because instant payment systems allow small banks to offer greater payment convenience to depositors, small banks can reduce their deposit rates relative to large banks. I estimate the deposit demand model and show that the depositors' welfare increases by 10% after Pix. The findings suggest that the universally available instant payment systems can foster banking competition.

Keywords: Instant payment technologies, deposit market power, banking, Pix

JEL Classification: E42, G21, G11, E58

Suggested Citation

Sarkisyan, Sergey, Instant Payment Systems and Competition for Deposits (September 25, 2023). Jacobs Levy Equity Management Center for Quantitative Financial Research Paper, Available at SSRN: or

Sergey Sarkisyan (Contact Author)

The Wharton School, University of Pennsylvania ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics