In love with the debit card but still married to cash

Abstract

Using shopping diary survey data we show that changing payment patterns is a challenging task; even when consumers have fallen in love with the debit card, they find it hard to divorce from cash. While seven out of ten Dutch consumers report to prefer using the debit card, only seven out of twenty actually mostly pay by debit card. The likelihood that reported preferences and actual behaviour do not match increases with income, education and age. Consumers with payments in cash-intensive sectors, where the wide acceptance of the debit card is a relatively recent phenomenon, are more likely to overestimate debit card usage than other consumers. The likelihood of a gap also increases with the amount of cash that consumers carry with them and decreases with the average transaction size. Our findings indicate that persistent habits are an important explanation why the substitution of cash by debit cards took place at a slower pace than was expected.

Drivers of Payment Patterns at the Point of Sale: Stable or Not?

“…This is in line with the finding of van der Cruijsen, Hernandez, and Jonker () that in September 2013, only 1% of consumers' payments could not be performed with consumers' preferred means of payment. The most common reason was that the payment instrument was not accepted.…”

“…This results in an S‐shaped adoption curve, starting with a small group of early movers, then moving through an acceptance stage in which adoption accelerates, and finally the maturity stage where the adoption rate slows down until the saturation point is reached (Rogers ). Moreover, due to persistent habits, the shift from cash to card payments may be slow even among those consumers who have a preference for cards (van der Cruijsen, Hernandez, and Jonker and van der Horst and Matthijsen ). Another contribution of our research is that, in contrast to Deutsche Bundesbank () and Mooslechner, Stix, and Wagner (), we estimate formal models and include perceptions of payment instruments as explanatory variables.…”

“…Although stated behavior differs from actual behavior (van der Cruijsen, Hernandez, and Jonker ), our key interest is in explaining developments over time.…”

The Cash Use of the Malaysian Ringgit: Can It Be More Efficient?

“…These notes and coins are ordered in a so-called denominational range, where sequences of 1, 2 and 5 can be used, although one also sometimes sees 1, 2.5 and 5, or (more rare) 1, 3 and 5. Paying with cash is still very common, even though at this time and age people also often use credit or debit cards, see Van der Cruijsen et al (2017). The creation and maintenance of banknotes and coins is a costly process, see for example Segendorf and Jansson (2012), and it is therefore important that the available notes and coins are used efficiently.…”

Cash Use of the Taiwan Dollar: Is It Efficient? †

“…For example, the Euro has banknotes 5, 10, 20, 50, 100, 200, and 500. Even though many people use credit cards or debit cards when making actual payments, the use of cash is still very popular (see for example, Van der Cruijsen et al 2017). Research on cash payments concerns the costs of cash payments (see for example, Segendorf and Jansson 2012) and how people perceive various payment modes (Khan et al 2015).…”