ATMs vs. POS Terminals
ATMs vs. POS Terminals

Author: Santiago Carbo-Valverde

Publisher:

Published: 2012

Total Pages: 23

ISBN-13:

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This paper analyzes the adoption, diffusion and interaction patterns of the widely observed expansion of ATM and point-of-sale (POS) devices in the banking industry. POS (debit and credit) card transactions are considered as a main paradigm of a welfare-improving transition from cash to electronic-based payment instruments. This transition, however, is following a slow path in many developed countries which can be, at least partially, due to the over time overlapping of the objectives of banks in deploying ATMs (moving some front-desk activities away from branches) and POS devices (increasing the use of cards for purchase transactions). The results of various empirical tests in this paper suggest that the adoption and diffusion of ATMs and POS machines at banks is mostly driven by rival precedence, network effects and market power while demand factors do not seem to be significant. The growth of ATMs is found to negatively affect POS adoption which, in turn, suggests that the promotion of cards relative to cash is diminished by the co-existence and joint promotion of these two rival technologies. Additionally, we provide estimates of the effects of these technologies on the demand for currency. The results show that POS devices and higher POS transactions may reduce significantly the demand for currency and offset the negative effects that the deployment of ATMs and ATM use may have on the demand for currency.

Regulating Communication Technology
Regulating Communication Technology

Author: William B. Trautman

Publisher:

Published: 1989

Total Pages: 112

ISBN-13:

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This research establishes a framework for analyzing the regulation of evolving communication technologies with a case study of automated teller machines (ATMs). The high fixed cost of communication technology may provide a basis for regulatory intervention, because it may enable large firms to gain a competitive advantage over small firms; it may also lead to efficiency. The regulatory issue is whether laws should be enacted that give competing firms access to existing technology, thus protecting the market share of small firms and enabling them to compete more equitably with large firms. Mandatory-access laws can impose a cost on society, however, by slowing the diffusion of technology and postponing the benefits associated with new communication services. This research provides empirical evidence that communication services are differentiated to a varying degree by location, suggesting that product differentiation may be relevant to regulation of mandatory access. The study presents a logistics model of ATM adoption by commercial banks. The model shows that the degree to which banks are differentiated on the dimension of location is an important determinant of ATM adoption, and that characterizations of competition that do not incorporate a measure of differentiation are not as good at predicting ATM adoption.