Why are (Some) Consumers (Finally) Writing Fewer Checks?: The Role of Payment Characteristics

Schuh, Scott; Stavins, Joanna

doi:10.2139/ssrn.1354734

Cited by 60 publications

(108 citation statements)

References 34 publications

(10 reference statements)

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“…Income and education have been cited in the literature as important factors, with cash usage declining with higher income and education (e.g., for CA Arango, Huynh, and Sabetti (2011);for DE von Kalckreuth, Schmidt, and Stix (2014b); and for US Schuh and Stavins (2010); Cohen and Rysman (2013). Figure 3 confirms differences along income terciles with less cash usage by higher-income respondents.…”

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confidence: 60%

“…We can analyse this issue by looking at consumers' ratings of certain payment instrument attributes, which can be viewed as broad proxies for consumer preferences and which have been found to affect payment choice (e.g., Borzekowski, Kiser, and Shaista, 2008;Ching and Hayashi, 2010;Schuh and Stavins, 2010;Arango, Huynh, and Sabetti, 2011).…”

Section: Consumer Preferencesmentioning

confidence: 99%

“…More recent papers on this subject, such as Borzekowski, Kiser, and Shaista (2008), Ching and Hayashi (2010), Schuh and Stavins (2010), Arango, Huynh, andSabetti (2011), or von Kalckreuth, Schmidt, andStix (2014b), inter alia, add a variety of other explanatory variables to such regressions. Unlike most studies, which use data usually from one country or only a few countries, this harmonized diary database makes it possible to assess the extent to which the determinants of payment choice are specific to a particular country or are more general in nature.…”

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

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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.

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Section: Consumer Preferencesmentioning

confidence: 99%

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confidence: 99%

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

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“…In regressions of payment adoption and use, the perceived security of a payment method was found to be significant in some cases, although typically less important than other characteristics of payment methods, such as ease of use or cost (Koulayev et al 2016, Schuh and Stavins 2010, 2013, 2015b, Ching and Hayashi 2010.…”

Section: Literature Reviewmentioning

confidence: 99%

“…A substantial and growing body of payment literature has developed on the determinants of adoption and use of payment methods (Koulayev et al 2016, Schuh and Stavins 2010, 2013, Borzekowski and Kiser 2008. More recently, attention has focused on the role of fraud and security in driving payment choice (Kahn and Liñares-Zegarra 2015, Schuh and Stavins 2015b).…”

Section: Introductionmentioning

confidence: 99%

Are there Social Spillovers in Consumers’ Security Assessments of Payment Instruments?

2017

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Abstract:Even though security of payments has long been identified as an important aspect of the consumer payment experience, recent literature fails to appropriately assess the extent of social spillovers among payment users. We test for the existence and importance of such spillovers by analyzing whether social influence affects consumers' perceptions of the security of payment instruments. Based on a 2008−2014 annual panel data survey of consumers, we find strong evidence of social spillovers in payment markets: others' perceptions of security of payment instruments exert a positive influence on one's own payment security perceptions. The significant and robust results imply that a consumer's assessments of security converge to his peers' average assessment: a 10 percent change in the divergence between one's own security rating and peers' average rating will result in a 7 percent change in one's own rating in the next period. The results are robust to many specifications and do not change when we control for actual fraud or crime data.Our results indicate that spillovers rather than reflection appear to be the cause, although separating the two causes is very difficult (Manski 1993). In particular, the spillovers are stronger for people who experience an exogenous shock to security perception, people who have more social interactions, and younger consumers, who are more likely to be influenced by social media. We also examine the effects of social spillovers on payment behavior (that is, on decisions regarding payment adoption and use). Our results indicate that social spillovers have a rather limited impact on payment behavior, as others' perceptions seem to affect one's own payment behavior mainly indirectly through the effect on one's own perceptions. JEL Classifications: D12, G02, G20

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Lottery Payment Cards: A Study of Mental Accounting

Yang

2015

Intell. Sys. Acc. Fin. Mgmt.

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This study analyses the difficulties of using stored-value cards for noncash payment adoption and payment framing behaviour development. This study applies the Rasch model via mental accounting theory to identify unobservable and latent difficulties in adopting noncash payment instruments for lottery participation. Anonymity, a reduction in cash carrying, and convenient purchases have discouraged noncash payment adoptions. However, consumers prefer stored-value cards because they are easy to carry and reduce payment time and long waits. Consumers also develop payment framing behaviour difficulties from crediting up to the maximum stored value and fear of insufficient cash, with preferences for period purchases. Lower income significantly discourages noncash payment adoption and payment framing behaviour development, whereas being of a younger age causes significant payment framing difficulties. Regional variations differ in convenience, anonymity, stored value, balance checking, and indirect donations. The moderating effect between income and age also positively significantly influences noncash payment adoption and payment framing behaviour. payment cards may dominate the successful adoption of payment cards (Humphrey, 2010). However, latent or unobservable difficulties stemming from psychological judgments on cash and noncash payments that cause preliminary obstacles in adopting noncash payment instruments are sparsely discussed. In this study, I examine the hidden difficulties in adopting noncash payment instruments via mental accounting theory. The Rasch model is applied to analyse the difficulties of noncash payment adoption to forecast technology diffusion and saving behaviour, as well as to examine the possible social impact and changes. Self-reported data from holders of cash and of noncash payment instruments in Taiwan are used. The Rasch model is a unidimensional measurement scale that measures raw data based on respondent ability and task difficulty as well as provides reliable and valid results for a small sample size (Jackson et al., 2002;Moral et al., 2006).It is determined that consumers prefer stored-value cards and adopt saving behaviour because of anonymity, reduced cash carrying, convenience, maximum stored values, periodic purchases, and the absence of fear of insufficient cash at point of sale. However, stored-value cards are perceived as difficult to carry and incapable of reducing payment and wait times. The difficulties of using stored-value cards with respect to saving features include the inability to increase indirect donation, crediting small prize amounts, and using a card without an expiration date.Having lower income significantly discourages noncash payment adoption and saving behaviour development, whereas being of younger age significantly causes difficulties in the latter. However, gender, marital status, education, and older age indicate negligible difficulties related to noncash payment adoption and saving behaviour development. Regional variations result in significant difficu...

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Why are (Some) Consumers (Finally) Writing Fewer Checks?: The Role of Payment Characteristics

Cited by 60 publications

References 34 publications

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

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

Are there Social Spillovers in Consumers’ Security Assessments of Payment Instruments?

Lottery Payment Cards: A Study of Mental Accounting

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