Changing tides: how consumers and merchants are redefining the payment experience

Retail payments bring together retailers and consumers, and the two-sided nature of this market means that the design of payment methods must reflect the needs of both sides. Today, the competitive landscape for retail payments in Europe is rapidly transforming due to changing consumer preferences, technological progress, regulatory intervention and, most recently, the COVID-19 pandemic. How are the expectations of consumers and merchants redefining the payment experience?

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Paying up: the new economics of payment systems

Retail payments play an important role in the functioning of modern society. However, they are currently going through a period of upheaval due to changes in technology, consumer behaviour and regulation, and most recently the global COVID-19 pandemic. What are the underlying economics behind retail payment systems, and what are their implications for competition in the sector?

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Calculating the cover charge: business interruption insurance and COVID-19

The COVID-19 pandemic has had a major impact on businesses across the world. Many have turned to their insurance providers to claim compensation under their business interruption (BI) insurance. However, even if a firm is covered for financial losses caused by the pandemic, determining the compensation amount is far from straightforward. What are the challenges, from an economic and financial perspective, in determining the compensation for these policyholders?

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The rise of the cryptoexchange giants: what next for trading cryptocurrencies?

Since the inception of Bitcoin over a decade ago, trading in cryptocurrencies has exploded. There are now thousands of cryptocurrencies and hundreds of cryptoexchanges to trade on. What is the secret of the few big cryptoexchanges, and is the high number of smaller cryptoexchanges sustainable? We look at the current landscape and competitive dynamics of the fast-evolving cryptoexchange market

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Retail payments: a changing European landscape

The landscape for retail payments in Europe is going through a period of considerable upheaval due to technological developments and entry by new providers, supported by regulatory changes. What exactly are these changes, and what are their implications for the competitive dynamics and market outcomes in retail payments?

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Investing, insurance or gambling?

The distinction between investment, insurance and gambling is an essential one for policymakers and regulators. At the most basic level it is easy to see the differences between these products. But is it possible to extend the theoretical distinctions to more complex products and so give consumers clearer guidance? Fod Barnes, Senior Adviser at the UK Payment Systems Regulator, and previously a Senior Adviser at Oxera, explores the issues

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Conduct risk management—high five?

Financial services providers around Europe are subject to clear expectations from regulators regarding conduct risk (or ‘the risk of misconduct’ that can cause poor consumer outcomes or undermine market stability or competition). What are these expectations, and how can providers meet them? In our experience, managing conduct risk requires a new toolkit based on behavioural economics, business model analysis, machine learning, competition economics, and good governance.

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Unbundling: what’s the impact on equity research?

The EU’s second Markets in Financial Instruments Directive (MiFID II), introduced in January 2018, requires brokers to charge separate fees for trade execution and for research, thereby ‘unbundling’ them. Since these rules came into force, there have been concerns about their impact on the provision of research and, more generally, the development of capital markets. What market failures does the unbundling rule intend to address, and what are its potential unintended consequences?

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State aid spotlight on tax: the General Court’s judgments on Fiat and Starbucks

In 2015, the European Commission ordered Starbucks and Fiat to each pay €20m–€30m in the Netherlands and Luxembourg, respectively, as their tax arrangements were found to constitute illegal state aid. On 24 September 2019, the General Court upheld the Commission’s Fiat decision, but annulled the Starbucks decision. What were the key economic issues in these cases, and what are the implications of the judgments?

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