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- Title
International payments: Current alternatives and their drivers.
- Authors
Milkau, Udo
- Abstract
As the traditional correspondent banking network is shrinking and becoming more concentrated due to increasing regulatory requirements, new alterna tives for international payments have emerged in recent years. On the one side, there are payment platforms such as AliPay, PayPal and AribaPay; on the other, there are token-based solutions such as Bitcoin. Announced in June 2019, Facebook's Libra initiative represents a culmination of these novel approaches. This paper will review the cur rent alternatives for international payments and the drivers behind these developments. The paper adopts a taxonomy to characterise money in the digital age and extends this in order to compare the different solutions. Three main dimensions can be applied to distinguish the concepts: tokens versus accounts; proprietary/closed-loop versus interopera ble; and settlement-based versus messages between local pools. While no current alternative could completely replace the existing system for the time being, close monitoring of the way forward and more research will be needed to derive more insight into this complex challenge.
- Subjects
PAYPAL (Web resource); ELECTRONIC money; PAYMENT; BITCOIN
- Publication
Journal of Payments Strategy & Systems, 2019, Vol 13, Issue 3, p201
- ISSN
1750-1806
- Publication type
Article