Measuring the costs of retail payment methods

In the last two decades, retail payments have experienced a dramatic shift from paper-based payment methods to electronic methods. Accurate cost information for the two types of methods would help central banks decide how hard to push for a complete transition to electronic methods and which methods to promote. ; To obtain such information, a number of central banks have recently conducted comprehensive studies of the costs of retail payment methods. Differences in the results of these studies suggest a need for each central bank to conduct its own study. ; Hayashi and Keeton, however, find that central banks wishing to conduct their own cost studies need not start from scratch. Central banks can learn many lessons from previous cost studies about how to measure and interpret costs and what kind of information to collect.