Legal Seminar, Denver, CO
Challenges of Two‐Sided Markets • Consumer side: why use an electronic payment (instead of cash or another payment avenue)? – Consumer protection measures – Liquidity and access to funds (or credit) – Rewards and economic incentives • Economists tell us that consumer demand elasticity may be greater than that of merchants (due to greater flexibility) – That means consumers are likely in the driver seat. Challenges of Two‐Sided Markets • Merchants. – Enhanced transaction volumes – Outsourced credit decisions – Payment security (vs. credit as benchmark) – Costs of participation must not outweigh benefits • If Merchants don’t adopt, consumers can’t use; if consumers don’t use, adoption is moot • But Merchants may have less flexibility to not adopt in face of consumer demand/competitive markets
Made with FlippingBook - Online magazine maker