Do Credit Cards Really Reduce Aggregate Money Holdings?

Yang, Bill Z.; King, Amanda S.

doi:10.1007/s11293-010-9254-y

Cited by 1 publication

(4 citation statements)

References 7 publications

(5 reference statements)

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“…In Table 8, the volume of credit card transactions (CCVOLCARD) is negatively related to currency demand (CURSAV) in the long run. This is consistent with the previous findings, such as those by Duca and Whitesell (1995), and differs from the findings of Yang and King (2011). The main difference between Yang and King (2011) and this study is the distinctive economic and banking structures in this article’s sample.…”

Section: Estimation Results and Discussionsupporting

confidence: 91%

“…This is consistent with the previous findings, such as those by Duca and Whitesell (1995), and differs from the findings of Yang and King (2011). The main difference between Yang and King (2011) and this study is the distinctive economic and banking structures in this article’s sample. Yang and King (2011) take their samples from the US economy which has a strong cheque culture whereas this study’s sample is a cash-based economy.…”

Section: Estimation Results and Discussionsupporting

confidence: 91%

“…The main difference between Yang and King (2011) and this study is the distinctive economic and banking structures in this paper's sample. Yang and King (2011) take their samples from the US economy which has a strong cheque culture whereas this study's sample is a cashbased economy. The use of cheques has been widespread for some time in the US.…”

Section: The Effect Of Card Usage To the Currency Holdingsmentioning

confidence: 77%

“…Turning to the investigation on credit card holding and the household demands for currency, Duca and Whitesell (1991) argue that credit card ownership affects a lower demand for currency and demand deposits with no effect on small time deposits. However, Yang and King (2011) have a different view regarding the ability of credit cards to reduce currency demand. The presence of ATMs, online banking and electronic funds transfer reduce the cost of having to visit banks.…”

Section: The Role Of Payment Systems In Financial Intermediationmentioning

confidence: 99%

See 3 more Smart Citations

Gauging the Impact of Payment System Innovations on Financial Intermediation: Novel Empirical Evidence from Indonesia

Lubis

Alexiou

Nellis

2019

Journal of Emerging Market Finance

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In this article, the relationship between innovations in the payment systems and financial intermediation is explored. By focusing on excess reserves and currency demand we provide evidence on the extant transmission mechanism. In this direction, a generalised method of moments (GMM) and vector error correction model (VECM) techniques are applied to a data set collated for Indonesia. We find that financial intermediation is affected by currency demand while we observe a limited role of excess reserves affecting financial intermediation. Credit card payments are found to have a statistically significant effect on currency demand, whereas debit card payments only influence financial intermediation in the long run. In addition, the real-time gross settlement (RTGS) exerts an upward pressure on excess reserves. The findings are of great importance as they provide support to policies that favour payment migration to an electronic platform, particularly that of card-based payment systems. JEL Classification: E42, E58, N25, G21

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Section: Estimation Results and Discussionsupporting

confidence: 91%