The impact of retail payment innovations on cash usage

Fung, Ben; Huynh, Kim P.; Sabetti, Leonard

doi:10.21314/jfmi.2014.034

Cited by 32 publications

(32 citation statements)

References 16 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Our methodological contribution is to provide identification of a three-period attrition probability function, and to discuss how to control simultaneously for non-ignorable attrition and item non-response. We find that, in contrast with the findings of Fung, Huynh and Sabetti (2014), SVCs lower cash usage in volume by about 2%, whereas no significant effects are found for contactless terminal cards (CTCs). These estimates illustrate that retail payment innovations have not yet made large inroads on cash usage.…”

Section: Introductioncontrasting

confidence: 99%

“…Fung, Huynh, and Sabetti (2012) use the 2009 Bank of Canada Method-of-Payments (MOP) survey and find that the use of contactless credit cards results in a decrease in cash usage of about 10 to 14 percent in terms of volume and value of transactions, respectively. These results are based on only one cross-section from 2009 and may be biased due to the presence of unobservable characteristics.…”

Section: Introductionmentioning

confidence: 99%

“…However, there are few empirical estimates of the effects of these retail payment innovations on cash usage. Fung, Huynh and Sabetti (2014) used the 2009 Bank of Canada method-of-payments (MOP) survey and found that the use of contactless credit cards results in a decrease in cash usage of about 10% and 14% in terms of volume and value of transactions respectively. These results are based on cross-sectional data from 2009 and may be biased because of unobserved heterogeneity.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Retail Payment Innovations and Cash usage: Accounting for Attrition by using Refreshment Samples

Chen

Felt

Huynh

2016

Journal of the Royal Statistical Society Series A: Statistics in Society

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. iii Terms of use: Documents in AbstractWe exploit the panel dimension of the Canadian Financial Monitor (CFM) data to estimate the impact of retail payment innovations on cash usage. We estimate a semiparametric panel data model that accounts for unobserved heterogeneity and allows for general forms of non-random attrition. We use annual data from the CFM on the methods of payment and cash usage for the period 2010-12. Estimates based on crosssectional methods find a large impact of retail payment on cash usage (around 10 percent). However, after correcting for attrition, we find that contactless credit cards and multiple stored-value cards (reloadable) have no significant impact on cash usage, while single-purpose stored-value cards reduce the usage of cash by 2 percent in terms of volume. These results point to the uneven pace of the diffusion of payment innovations, especially contactless credit.

show abstract

Section: Introductioncontrasting

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Retail Payment Innovations and Cash usage: Accounting for Attrition by using Refreshment Samples

Chen

Felt

Huynh

2016

Journal of the Royal Statistical Society Series A: Statistics in Society

View full text Add to dashboard Cite

show abstract

“…Further work by von Kalckreuth, Schmidt, and Stix (2014b) uses payment diary data for DE to show that cash is used as a method to monitor expenditures (pocket-watching). Fung, Huynh, and Sabetti (2012) investigate the effect of retail payment innovations (i.e., contactless credit cards and stored-value cards) on cash usage and find that there is a reduction. Finally, Bounie, Francois, and Waelbroeck (2013) and Huynh, Schmidt-Dengler, and Stix (2014) study the impact of card acceptance on cash usage.…”

Section: Consumer Cash Usagementioning

confidence: 99%

Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data

et al. 2014

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. iii Terms of use: Documents in AbstractWe measure consumers' use of cash by harmonizing payment diary surveys from seven countries. The seven diary surveys were conducted in 2009 (Canada), 2010 (Australia), 2011 (Austria, France, Germany and the Netherlands), and 2012 (the United States). Our paper finds cross-country differences -for example, the level of cash usage differs across countries. Cash has not disappeared as a payment instrument, especially for low-value transactions. We also find that the use of cash is strongly correlated with transaction size, demographics, and point-of-sale characteristics such as merchant card acceptance and venue.

show abstract

“…This objective is shared by the electronic payment systems promoting the use of debit and credit cards (Borzekowski et al, 2008), and the adoption of innovations such as prepaid cards (Shy and Tarkka, 2002) and contactless cards (Fung et al, 2012). However, despite the huge investments in promoting multiple technological innovations, cash is still the main payment instrument used to pay for low-value transactions in most developed countries.…”

Section: Introductionmentioning

confidence: 99%

Cash Management and Payment Choices: A Simulation Model with International Comparisons

et al. 2014

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. iii Terms of use: Documents in AbstractDespite various payment innovations, today, cash is still heavily used to pay for lowvalue purchases. This paper develops a simulation model to test whether standard implications of the theory on cash management and payment choices can explain the use of payment instruments by transaction size. In particular, using diary survey data from Canada, France, Germany and the Netherlands, we test the assumption that cash is still the most efficient payment instrument, and the idea that people hold cash for precautionary reasons when facing uncertainty about their future purchases. The results of the simulations show that these two factors are significant determinants of the high shares of low-value cash payments in Canada, France and Germany. Yet, they are not so crucial in the Netherlands, which exhibits a significant share of low-value card transactions. We discuss how the differences in payment markets across countries may explain the differences in the performance of the model.

show abstract

The impact of retail payment innovations on cash usage

Cited by 32 publications

References 16 publications

Retail Payment Innovations and Cash usage: Accounting for Attrition by using Refreshment Samples

Retail Payment Innovations and Cash usage: Accounting for Attrition by using Refreshment Samples

Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data

Cash Management and Payment Choices: A Simulation Model with International Comparisons

Contact Info

Product

Resources

About