Leo Van Hove

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• Professor of Economics
• Professor (Full) at Vrije Universiteit Brussel

Despite questions surrounding their reliability, much of the financial literacy literature continues to rely on simple metrics – without checking whether using an alternative might yield different findings. The present paper does just that: we replicate two prior studies and substitute the Standard & Poor’s indicator originally used with the Big Th...

Women tend to have higher inflation expectations than men. In a recent article, D’Acunto et al. (2021a) claim to show, with data for the US, that this ‘gender expectations gap’ results primarily, if not solely, from a higher exposure to volatile grocery prices, as women typically do more of the grocery shopping of their household. This note shows t...

Recent papers assume that whereas the value of ‘traditional’ communications networks follows Metcalfe's law – that is, grows with the square of the number of users – the value of group-forming network platforms should increase faster. The papers see evidence in the fact that the advertising revenues of platforms such as Facebook and Tencent follow...

Purpose: The goal of the present methodological note is to show that surveys which are not targeted at primary grocery shoppers risk substantially underestimating the uptake of e-grocery services. Research based on such data is also liable to mismeasure the impact of explanatory variables.Design/methodology/approach: I repurpose the data of a recen...

This note reports on an online, within-subjects experiment with a convenience sample of 206 respondents. The experiment consisted in having the same set of respondents taking not one but two of the financial literacy tests that are popular in the literature, namely the Big Three and the Standard & Poor’s. Disturbingly, we find that 37 per cent of t...

Gignac and Ooi (2022) show that financial literacy tests composed of fewer than ten questions suffer from low internal consistency reliability. This note shows that the issue also limits the reliability and relevance of country rankings based on such tests.

Mobile payments provide several benefits, for consumers and merchants alike. Yet, on a worldwide scale their usage is still low. Also, the barriers to mobile payment usage are still a rather unexplored topic in the literature, which is instead focused on adoption behavior. Accordingly, our objective is to investigate the factors that hinder mobile...

Gruntkowski and Martinez examined the impact of factors such as perceived risk and perceived usefulness on German consumers' intention to purchase groceries online once the COVID-19 pandemic had subsided. They also compared consumer perceptions before and during the COVID-19 outbreak. This comment shows that Gruntkowski and Martinez's research suff...

This article uses selected results of the Digital Payment Barometer-an annual, nationally representative survey among more than 1,100 Belgians-to document that there is a 'payments divide'. We use this term to refer to a situation where the majority of Belgian consumers are comfortable with-and increasingly use-electronic payment instruments at the...

This comment points out that Lopes and Gomes, in their study on Portugal, erroneously conclude from their results that "being female negatively influences the online grocery shopping experience during the COVID-19 pandemic". In fact, gender is insignificant.

Mobile payments provide several benefits, for both consumers and merchants, from increased convenience, security, and speed to reduced transaction costs and higher customer loyalty. Nevertheless, the usage of mobile payments worldwide is still low. Accordingly, the objective of this paper is to investigate the factors that hinder mobile payment usa...

The literature does not agree on the precise role of socio-demographic characteristics in the adoption of online grocery shopping. This methodological note reviews the literature and shows that the differences in empirical results can to a large extent be explained by the data that is used. In particular, what matters is whether or not the survey t...

This paper reports the first publicly available results of Belgium's newly created Digital Payment Barometer. The results show that, as in other countries, the COVID-19 pandemic triggered a shift towards contactless and, to a lesser extent, mobile payments at the point of sale. Strikingly , however, the biggest jumps in the use of contactless payme...

This paper investigates consumers’ willingness to pay (WTP) for click-and-collect grocery services. In particular, we analyze whether the time-pressed are willing to pay higher fees. We exploit a survey among 572 customers of two Belgian supermarket chains—both users and non-users. We test our model for three (increasingly narrow) samples: all resp...

Agarwal et al. ( 2019 ) analyze the impact of the introduction of quick response (QR) codes for mobile payments in Singapore. They find that this not only resulted in a significant increase in the use of mobile wallets, but that there was also a positive spillover effect on debit and credit card payments — in particular at small and new businesses....

This article presents and discusses selected results of the newly created Digital Payment Barometer, an annual nationally representative survey among more than 1,100 Belgians. As in other countries, in Belgium too the COVID 19 pandemic triggered a shift towards contactless payments at the point-of-sale. We analyse how this has affected Belgians’ ca...

Krivosheya (2020) finds that consumers’ use of financial innovations has a positive effect on the frequency with which they use a payment card at the point of sale. This comment argues that Krivosheya's results are a case of ‘correlation does not imply causation’.

In order to determine how sustainable online grocery shopping is as a practice, it is crucial to have an in-depth understanding of its drivers. This paper therefore validates the Unified Theory of Acceptance and Use of Technology (UTAUT2) in the context of e-grocery and enriches it with five constructs. We exploit a self-administered survey among 5...

Arce (Malware and market share. J Cybersecur 2018;4:tyy010) presents a game-theoretic model in which users select and hackers target one of two IT platforms based upon the platforms’ network benefits and security levels. Unfortunately, in modelling the network benefits, Arce misinterprets Metcalfe’s law. In particular, he assumes that the utility t...

Using payment diary data, Shy (2020) shows that the way Americans pay is affected by the denominations of the US dollar, and in particular by the availability, in ATMs, of the $20 note. Shy also proposes a model to provide intuition for this finding. Unfortunately, this model lacks generality.

We examine to what extent a specific aspect of national culture—uncertainty avoidance—can explain cross‐country variations in (dis)trust in banks. Relying on data from the World Values Survey, we find that trust in banks is lower in countries that score high for Hofstede's uncertainty avoidance index. Similarly, with Global Findex data, we find tha...

This paper explores how households organize the process of e-grocery buying in a click-and-collect context, down to the level of the two main subtasks: the online ordering and the picking-up. Self-collected survey data on 112 users of Belgian click-and-collect services first provide a quantitative perspective. But we primarily exploit in- depth int...

We examine to what extent (aspects of) national culture can explain cross-country variations in financial literacy. Our results, for a sample of 92 countries, show that Hofstede’s dimensions of power distance and individualism explain, respectively, over 40 and 60 per cent – which is substantially more than national cognitive scores and standard ec...

This qualitative paper examines the importance of both situational factors and adoption constructs in the decision to use online grocery services for the first time. To that end, we have conducted semi-structured in-depth interviews with (one or more representatives of) 15 households in Flanders (the Dutch-speaking part of Belgium), who all use Col...

Arce (2018) presents a game-theoretic model in which users select and hackers target one of two IT platforms based upon the platforms' network benefits and security levels. Unfortunately, in modelling the network benefits Arce misinterprets Metcalfe's law. In particular, he assumes that the utility that a user obtains from a platform increases quad...

Introduction - This paper analyses the cross-cultural website design strategy of a division of a single multinational company, namely Honda Cars. Method - We conducted a content analysis of sixty-one Honda Cars websites, each targeted at a different country. Analysis - We perform t-tests and compute Pearson correlations to verify and quantify the c...

We investigate the impact of the 2005–2007 cross-border bank takeovers in Ukraine – a country with poor institutional quality – on the performance of the target banks. Because acquirers targeted mainly larger, less-capitalised banks, we control for selection bias by combining propensity score matching and a difference-in-difference methodology. We...

Mobile financial services such as M-PESA in Kenya are said to promote inclusion. Yet only 7.6 per cent of the Kenyans in the 2013 Financial Inclusion Insights dataset have ever used an M-PESA account to save for a future purchase. This paper uses a novel, three-step probit analysis to identify the socio-demographic characteristics of, successively,...

This note revisits existing research on network effects in the mobile telephony industry. It highlights that – defined correctly – own-network and firm-level network externalities are two different concepts, and that mixing them up leads to inaccurate interpretations. In particular, I demonstrate that the ratio of cross- to own-network effects is a...

Using primary, individual-level survey data for Ghana, Apiors and Suzuki find, among other things, that mobile money use is not dependent on financial status and that mobile money users save more. This note argues that both conclusions have validity issues.

In a recent paper, Puccinelli et al. examine the effect of the color in which prices appear in print flyers on consumers’ perceived savings. Puccinelli et al. find that the effect is moderated by gender: unlike female consumers, men think they are being offered a better deal when prices are presented in red than when they are presented in black. Th...

The two-sided market theory holds that consumer adoption and merchant acceptance of payment cards are interdependent. However, empirical evidence on such network externalities is scarce, especially for the merchant side. This paper addresses this issue by examining merchant card acceptance in France. We exploit shopping diary data to construct a no...

The influence of electronic word-of-mouth (eWOM) on consumers’ online purchase decisions is well-documented. However, little is known about the impact of customer images, a recent form of eWOM. The present paper reports on an exploratory survey among 215 young users of the Chinese C2C shopping Web site Taobao.com. The idea was to test whether the s...

In a recent paper in this journal [Zhou, W., Pu, Y., Dai, H., & Jin, Q. (2017). Cooperative interconnection settlement among ISPs through NAP. European Journal of Operational Research, 256, 991–1003], Zhou et al. propose a profit allocation method that encourages Internet Service Providers to interconnect through Network Access Points. Zhou et al.’...

This paper first analyses how socio-demographic characteristics impact the adoption of online grocery shopping and, in a second step, relies on the Motivation-Opportunity-Ability (MOA) model to explore what these socio-demographics actually capture and how they are linked with consumer motivations. We exploit a survey among 468 customers of Belgian...

By adding denominations to their coin and banknote series central banks can increase the efficiency of cash payments. In practice, however, they opt for a denominational structure with a relatively low density. The literature holds that this is because of the production costs involved. To test this proposition, we introduce a per-denomination fixed...

This paper examines the usage of internet banking by individuals, and does so from the perspective of technology acceptance theories. Previous studies have shown that both perceived usefulness and perceived ease of use are important drivers of the adoption of internet banking. Only a few studies examine the drivers of internet banking usage. We hav...

In recent years, regulators in various parts of the world have capped interchange fees on debit and credit cards. The justification for the caps rests to a large extent on the argument that these cards have, for certain merchants, become must-take cards rather than ‘wanna-take cards’. That is, there are merchants who accept payment cards not becaus...

A small but burgeoning body of literature has tried to assess whether Metcalfe's law provides a realistic yardstick for the value of specific networks. In this paper, I uncover a number of flaws in the extant tests. First, a proper test of Metcalfe's law—or of any of the competing “laws”—requires correct identification of the type(s) of network eff...

Fuentelsaz, Garrido and Maicas (2015) propose an “improved” measure of network value for the mobile telecommunications industry. Unfortunately, their measure has multiple issues. For one, it is biased against networks that are small and/or active in small markets. Also, it cannot adequately take into account intertemporal changes in mobile operator...

A 2013 article in Electronic Commerce Research and Applications (Cyr 2013) claims to demonstrate that user perceptions of website design are not only driven by national culture but also by country-level economic and technological parameters. This comment shows that the study's hypotheses should have been rejected and that the proposed dual framewor...

In recent years, regulators in various parts of the world have capped interchange fees on debit and credit cards. The justification for the caps rests to a large extent on the argument that these cards have, for certain merchants, become must-take cards rather than “wanna-take cards.” That is, there are merchants who accept payment cards not becaus...

We use logit analysis to exploit a self-collected dataset on the payment and delivery options offered by the vast majority of B2C websites in 5 Central Asian transition economies. Specifically, we conduct a supply-side test of (elements of) the Transaction Context Model, which highlights the role of perceived risk. Our results confirm that e-retail...

A growing body of central bank studies shows that cash payments are costly for society and that electronic payment instruments are more efficient. This Chapter tries to find out whether libertarian paternalism can offer novel ways to discourage the use of cash by consumers. Libertarian paternalism, or 'nudging', relies on insights from behavioural...

The European payment market has undergone rapid transformation in recent years due to changes in payment habits, new business rules and new legal frameworks and regulation. There has also been an advent of new technologies and payment solutions which has altered the European payments landscape drastically. This book provides an overview of the key...

Zhang et al. exploited data on Facebook and Tencent to validate Metcalfe’s law, which states that the aggregate value of a communications network is proportional to the square of the number of users. This note points out that the value of a social network may be driven not only by its size, but also by increases in the variety and quality of the se...

We investigate the impact of soft interventions – so-called nudges – on the way consumers pay at the point of sale. In particular, we set up an experiment in a university canteen frequented by both students and university personnel. In an attempt to steer consumers towards card payments, we administered two temporary interventions. In a first stage...

This paper models the banknote printing costs of a central bank in a society that uses progressively less cash. In such a setting, the central bank runs the risk of overinvesting when it introduces a new technology – for example when it switches from paper to polymer notes. I show that simple durability/cost rules-of-thumb are unhelpful in determin...

Menzies (2004) uses a ‘cohorts approach’ to model banknote printing costs. This paper proposes a ‘generational approach’ that allows for more realistic assumptions concerning currency growth and note replacement. The paper shows that Menzies’ claim that the case for polymer banknotes becomes stronger with higher currency demand is an artefact of hi...

Briscoe et al. (2006) claim that Metcalfe’s law is “wrong”. One of their arguments is that “if Metcalfe's Law were true, then two networks ought to interconnect regardless of their relative sizes”. This paper shows that this argument is flawed.

Deze bijdrage gaat na welke socio-demografische kenmerken de adoptie van online boodschappendiensten door de Belgische consument kunnen verklaren. Wij hebben hiervoor gefocust op één bepaalde dienst. Omwille van zijn pioniersrol hebben we gekozen voor Collect & Go, de online besteldienst met afhaling van Colruyt. Concreet hebben we een enquête uitg...

The two-sided market theory holds that consumer adoption and merchant acceptance of payment cards are interdependent. However, empirical evidence on such network externalities is scarce, especially for the merchant side. This paper uses a logit model to explain merchant card acceptance in France. We exploit shopping diary data to construct a novel...

One of the most important results of theoretical research on currency systems is that spacing denominations apart by a factor of two is better than a factor of three as this lowers the average number of notes and coins exchanged in transactions. These theoretical studies also claim that an efficient denominational mix has the additional benefit of...

We develop an analytical framework that allows central banks to assess whether changing the manufacturing material of their tokens would be beneficial. Applied to the case of the U.S., we find that a complete adoption of plastic notes would save the Fed $140 million per year but would entail a substantial migration cost in case of a “big bang”. On...

In recent years, numerous central banks throughout the world have introduced plastic banknotes in order to combat counterfeiting and reduce their operating costs. In this paper, we provide an analytical framework that allows central banks to assess whether changing the manufacturing material of their coins or banknotes would be beneficial. We use t...

Introduction. Newspapers that have a Website with substantial content need to be sensitive to the danger that their print channel might be cannibalised by the online channel. Method. We visited the Websites of all eighty-two national newspapers in eight Western European countries and listed their relevant characteristics. We posit that newspapers'...

We investigate the impact of cross-border takeovers on target banks’ profitability, efficiency, and market share in Ukraine, an exemplar of a country with poor institutional quality. We rely on a combination of propensity score matching with the difference-in-difference methodology, and our main contribution lies in an additional sensitivity analys...

Willesson [(2009). Pricing of card payment services in Scandinavian banking. The Service Industries Journal, 29(3), 387–399] purports to demonstrate that when it comes to pricing of card payment services, Scandinavian banks with foreign operations will typically align themselves with the ‘pricing tradition’ in their foreign market(s). Unfortunately...

We investigate foreign banks’ interest in financing small and medium sized enterprises in Ukraine, a country where massive foreign bank entry took place in a late stage of transition. We use unique, self-collected bank-level data on banks’ involvement with SMEs in 2004, 2006, 2009, and 2010. We find that initially foreign banks were neither less no...

This paper aims to provide an integrative review of the experiment-based literature on the antecedents of initial trust in a business-to-consumer (B2C) e-commerce setting. To that end, we present a framework that classifies trust-inducing website features according to three broad dimensions, namely visual design, social cue design and content desig...

We investigate the impact of local banking market concentration on small and medium-sized enterprises’ access to finance in Ukraine, as an under-researched case of a country where crime and corruption rates are high. We combine firm-level observations from the EBRD’s BEEPS survey with unique, self-collected data on local banking markets. We take in...

This article tries to reveal why some newspaper Web sites rely on subscriptions, whereas others (also) offer pay-per-view. To that end, this study applies logit analysis to a unique dataset on 82 national newspapers from 8 countries. It was found that quality newspapers are more likely to offer site subscriptions and pay-per-view, whereas newspaper...

In an often-cited article, Caianiello et al. (1982) formulate a “principle of invariance” for currency systems. They build on this principle to explain the distribution of the coins and banknotes in circulation over the different denominations, and to analyze how a currency system adjusts to inflation. This paper shows that Caianiello et al.’s dist...

This paper analyses how e-purse developers have tried to penetrate international markets. The analysis covers the period between 1992 and 2006, and builds on 16 firm-level case studies that span developments in more than 30 countries around the globe. The paper uses a novel multi-dimensional framework to position the firms at different points in ti...

The payments market is a dynamic market. Novel payment instruments are being launched at a fast clip. Unfortunately, a classification that adequately distinguishes all possible payment instruments by their most relevant characteristics is missing in the literature. In this paper a classification system is introduced that – just like a matryoshka do...

A growing body of central bank studies show that cash payments are costly for society and that electronic payment instruments are more efficient. This paper tries to find out whether Thaler and Sunstein's libertarian paternalism - as promoted in their 2008 book Nudge - can offer novel ways to discourage the use of cash. Libertarian paternalism, or...

This article brings together a number of recent studies for Belgium and the Netherlands in order to show that the War On Cash is a cause worth fighting for. It builds on two central bank studies to show that the social cost of cash is substantial, and that society would benefit from a switch to debit cards and electronic purses. As for the most eff...

This paper analyses 82 national newspaper sites from eight Western European countries (Belgium, the Netherlands, Luxembourg, France, Germany, Italy, Spain and the UK). These sites were checked as to whether the content is offered free or against payment, the payment instruments they accept are listed, and it is noted whether the sites rely on subsc...

This paper analyses the websites of 82 national daily newspapers in eight Western European countries, in order to determine their online revenue models. Overall, 80.5 per cent of our newspapers try to monetise (part of) their online content in direct ways. In doing so, the bulk of the paying sites rely on 'traditional' online subscriptions rather t...

On May 31st, MasterCard Europe announced that instead of applying SEPA fallback interchange rates for its Maestro debit card from 1 January 2008, it had decided to delay their introduction until further notice. MasterCard cited continued lack of clarity from competition authorities and opposition from certain merchant organisations. The latter had...

In this paper, we analyse 82 national newspaper sites from eight Western European countries (Belgium, the Netherlands, Luxembourg, France, Germany, Italy, Spain and the UK). For these sites, we checked whether the content is offered for free or against payment, we listed the payment instruments they accept, and we noted whether the sites rely on su...

Purpose This paper aims to provide a first overview of important implications of payment models for next‐generation mobile service platforms (NextGen MSPs). Design/methodology/approach The starting point of the paper is an existing set of mobile payment models. These models are modified and expanded on in order to be able to highlight implications...

This article analyses the competition between cash and payment cards against the backdrop of the dual role of central banks - as issuers of cash and as institutions with a mandate to foster the efficiency of payment systems in general. It is argued that this dual role results in a number of policy dilemmas, namely concerning pricing, traceability o...

This is a companion paper to Van Hove (2007). The latter paper builds on 16 firm-level case studies to examine the drivers behind the internationalization efforts of e-purse developers. Specifically, the paper tries to find out whether the approach proposed by Sarkar et al. (1999) for the telecom sector can be transposed to another network industry...

This paper is included in the First Monday Special Issue #3: Internet banking, e-money, and Internet gift economies, published in December 2005. Special Issue editor Mark A. Fox asked authors to submit additional comments regarding their articles. Back in 1998-1999, several players, including the European Commission, contended that the patchwork of...

This paper is included in the First Monday Special Issue #3: Internet banking, e-money, and Internet gift economies, published in December 2005. Special Issue editor Mark A. Fox asked authors to submit additional comments regarding their articles. The article below, which was written in 2000, showed that initial expectations about consumer uptake a...

This paper documents the recent performance of European electronic purses. It presents data on 16 such schemes, and compares their penetration and usage rates. These rates are shown to differ substantially. A number of schemes are doing increasingly well and in all probability are here to stay. These schemes have also received a boost from the intr...

Earlier I have argued in favour of explicit cost-based pricing of payment instruments. This article analyses new cost estimates for the Netherlands, and provides an overview of positions recently taken by important actors such as central banks and the European Commission. The new cost estimates strengthen the case for e-money. The central bank repo...

We are witnessing a shake-out in the European electronic purse market. Several cards that have been in the market for years have or are about to disappear. On the other hand, there are a number of schemes that are doing reasonably well, particularly in the Benelux. This article looks at the mixed experience with e-purses in Europe from a pragmatic...

The final stage of the changeover to the euro consisted of the introduction of euro coins and banknotes on 1 January, 2002. The national changeover plans, that provided the scenarios, were based on the exclusive transaction function of money. However, in most European countries high-denomination banknotes were significantly hoarded and/or used in t...

A number of recent articles argue that the "problem of Bachet" - the problem of finding the most efficient set of standard weights - can shed light on the problem of finding the optimal denominations of coins and bank notes. The present note opposes this view and shows that the two problems are different in a key way. It also argues that finding th...

The adoption of smart cards continues to be more interesting to those who market them than to the target population. A high-profile test of Mondex and Visa Cash stored-value cards ended in 1998 after a 15-month run on Manhattan's Upper West Side. The results were disappointing. This paper describes the organization of the trial, analyzes the result...