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How Are Payments Made in Austria?

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  • Peter Mooslechner

    ()
    (Oesterreichische Nationalbank)

  • Helmut Stix

    ()
    (Oesterreichische Nationalbank, Economic Studies Division)

  • Karin Wagner

    ()
    (Oesterreichische Nationalbank, Economic Analysis Division)

Abstract

This study presents the results of a survey conducted in fall 2005 on the payment habits of Austrian households, comparing its findings with those of similar surveys carried out in 1996 and 2000. The focus is to analyze changes in the use of payment means over time and, on this basis, to assess future trends. As the analysis in the 2005 survey shows, cash continues to dominate the structure of payment transactions, remaining by far the most important means of payment. Cash payments account for 86% of all direct payment transactions by Austrian households and for 70% of the total payment value. Compared with the previous surveys, however, the share of cash has contracted noticeably whereas the share of payments at point-of-sale (POS) terminals (via debit card payments) has more than doubled in the last five years to 11.5%. Although credit card payments have posted a slight increase, their share in the total volume still remains very low (1.3%). Overall, the results indicate the continuation of cash-card substitution. From a central banking perspective, assessing future trends in cash demand is a key monetary policy issue. The findings of this study suggest that Austrian households’ payment habits will not change abruptly, therefore, any impact on monetary policy can be expected to remain very limited.

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File URL: http://www.oenb.at/dms/oenb/Publikationen/Volkswirtschaft/Monetary-Policy-and-the-Economy/2006/Monetary-Policy-and-the-Economy-Q2-06/chapters/mop_2006_2_06_tcm16-45592.pdf
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Bibliographic Info

Article provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Monetary Policy & the Economy.

Volume (Year): (2006)
Issue (Month): 2 ()
Pages: 111–134

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Handle: RePEc:onb:oenbmp:y:2006:i:2:b:6

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Keywords: usage of payment means; demand for money; monetary policy.;

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References

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  1. Sheri M. Markose & Yiing Jia Loke, 2000. "Network effects on Cash-Card Substitution in Transactions and Low Interest Rate Regimes," Economics Discussion Papers, University of Essex, Department of Economics 507, University of Essex, Department of Economics.
  2. Mathias Drehmann & Charles Goodhart & Malte Krueger, 2002. "The challenges facing currency usage: will the traditional transaction medium be able to resist competition from the new technologies?," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 17(34), pages 193-228, 04.
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Citations

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Cited by:
  1. Anton Schautzer, 2007. "Cash Logistics in Austria and the Euro Area," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 138–149.
  2. Von Kalckreuth, Ulf & Schmidt, Tobias & Stix, Helmut, 2009. "Choosing and using payment instruments: evidence from German microdata," Working Paper Series, European Central Bank 1144, European Central Bank.
  3. Carlos Arango & Dylan Hogg & Alyssa Lee, 2012. "Why Is Cash (Still) So Entrenched? Insights from the Bank of Canada’s 2009 Methods-of-Payment Survey," Discussion Papers 12-2, Bank of Canada.
  4. Fernando Alvarez & Francesco Lippi, 2012. "The Demand of Liquid Assets with Uncertain Lumpy Expenditures," NBER Working Papers 18152, National Bureau of Economic Research, Inc.
  5. Takala, Kari & Viren, Matti, 2008. "Efficiency and costs of payments: some new evidence from Finland," Research Discussion Papers, Bank of Finland 11/2008, Bank of Finland.
  6. Helmut Stix & Karin Wagner, 2006. "How Do Austrians Pay for Online Purchases?," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 45–90.
  7. Yassine Bouhdaoui & David Bounie, 2012. "Modeling the Share of Cash Payments in the Economy: An Application to France," International Journal of Central Banking, International Journal of Central Banking, International Journal of Central Banking, vol. 8(4), pages 175-195, December.
  8. Bar-Ilan, Avner & Marion, Nancy, 2013. "Demand for cash with intra-period endogenous consumption," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 37(12), pages 2668-2678.
  9. Rita Odorán & Balázs Sisak, 2008. "Cash demand of the Hungarian economy – is the shadow economy still running smoothly?," MNB Bulletin, Magyar Nemzeti Bank (the central bank of Hungary), Magyar Nemzeti Bank (the central bank of Hungary), vol. 3(3), pages 19-25, December.
  10. Von Kalckreuth, Ulf & Schmidt, Tobias & Stix, Helmut, 2011. "Using cash to monitor liquidity - implications for payments, currency demand and withdrawal behavior," Working Paper Series, European Central Bank 1385, European Central Bank.
  11. Carlos Arango & Angelika Welte, 2012. "The Bank of Canada’s 2009 Methods-of-Payment Survey: Methodology and Key Results," Discussion Papers 12-6, Bank of Canada.
  12. VAN HOVE, Leo, 2007. "Central Banks and Payment Instruments: a Serious Case of Schizophrenia," MPRA Paper 5281, University Library of Munich, Germany.
  13. Hiroshi Fujiki & Migiwa Tanaka, 2009. "Demand for Currency, New Technology and the Adoption of Electronic Money: Evidence Using Individual Household Data," IMES Discussion Paper Series, Institute for Monetary and Economic Studies, Bank of Japan 09-E-27, Institute for Monetary and Economic Studies, Bank of Japan.

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