The Role of Convenience and Risk in Consumers' Means of Payment
AbstractUsing data from a 2004 survey of the Canadian public, the authors study the role of convenience and risk in consumers' use of cash relative to debit and credit cards. The authors find that consumers who perceive debit cards and credit cards to be more convenient and less risky than cash use them more frequently. Even at low levels of perceived risk, consumers shift substantially away from cash and towards alternative payment methods. However, the authors' results reveal that there exists a lower bound for which cards can substitute for cash. Also, as other studies have shown, the relative use of cash is higher among older, less-educated, lower-income consumers.
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Bibliographic InfoPaper provided by Bank of Canada in its series Discussion Papers with number 09-8.
Length: 27 pages
Date of creation: 2009
Date of revision:
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Find related papers by JEL classification:
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
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- Arango, Carlos & Huynh, Kim P. & Sabetti, Leonard, 2011.
"How do you pay? The role of incentives at the point-of-sale,"
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- Scott Schuh & Joanna Stavins, 2012. "How consumers pay: adoption and use of payments," Working Papers 12-2, Federal Reserve Bank of Boston.
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