Explaining cash usage in the Netherlands: the effect of electronic payment instruments
AbstractSince the mid-nineties, usage of the debit card by Dutch consumers has increased considerably. While accounting for three quarters of the total value of retail sales in the early nineties, in 2004 the value share of cash payments had fallen to about two quarters. If the cash to payment card ratio in 2004 had been the same as in 1990, the social costs of retail payments would have come out almost EUR 200 million higher. Consumers will have benefited from these savings through lower consumer prices and bank fees. Estimates indicate that the share of cash (in value terms) will decline further from 46% to about 20% in 2015. Changes in the payment infrastructure can yield even higher cost savings. This appears from the outcomes of fictitious scenarios in which the use of electronic means of payment is promoted by increasing the growth rate of the number of EFTPOS terminals and keeping the number of ATMs at their end-2004 level. The outcome in question is indicative of the effectiveness of any efficiency-enhancing measures that may betaken within the scope of the November 2005 Payment Covenant between banks and retailers. An increase in the number of EFTPOS terminals turns out to be especially effective.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 136.
Date of creation: Apr 2007
Date of revision:
cash usage; retail payments; cost efficiency;
Find related papers by JEL classification:
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-28 (All new papers)
- NEP-COM-2007-04-28 (Industrial Competition)
- NEP-MAC-2007-04-28 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paunonen, Heli & Jyrkönen, Hanna, 2002. "Cash usage in Finland – How much can be explained?," Research Discussion Papers 10/2002, Bank of Finland.
- Nicole Jonker, 2005. "Payment Instruments as Perceived by Consumers - a Public Survey," DNB Working Papers 053, Netherlands Central Bank, Research Department.
- Wilko Bolt & David Humphrey & Roland Uittenbogaard, 2005.
"The effect of transaction pricing on the adoption of electronic payments: a cross-country comparison,"
05-28, Federal Reserve Bank of Philadelphia.
- Wilko Bolt & David Humphrey & Roland Uittenbogaard, 2005. "The Effect of Transaction Pricing on the Adoption of Electronic Payments: A Cross-Country Comparison," DNB Working Papers 071, Netherlands Central Bank, Research Department.
- Hyytinen, Ari & Takalo, Tuomas, 2004.
"Multihoming in the Market for Payment Media: Evidence from Young Finnish Consumers,"
893, The Research Institute of the Finnish Economy.
- Hyytinen, Ari & Takalo , Tuomas, 2004. "Multihoming in the market for payment media: evidence from young Finnish consumers," Research Discussion Papers 25/2004, Bank of Finland.
- W. Bolt, 2003. "Retail Payments in the Netherlands: some Facts and Some Theory," WO Research Memoranda (discontinued) 722, Netherlands Central Bank, Research Department.
- repec:kap:decono:v:154:y:2006:i:3:p:345-372 is not listed on IDEAS
- Wilko Bolt & Nicole Jonker & Corry van Renselaar, 2008.
"Incentives at the counter: An empirical analysis of surcharging card payment and payment behaviour in the Netherlands,"
DNB Working Papers
196, Netherlands Central Bank, Research Department.
- Bolt, Wilko & Jonker, Nicole & van Renselaar, Corry, 2010. "Incentives at the counter: An empirical analysis of surcharging card payments and payment behaviour in the Netherlands," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1738-1744, August.
- Kosse, Anneke, 2013.
"Do newspaper articles on card fraud affect debit card usage?,"
Journal of Banking & Finance,
Elsevier, vol. 37(12), pages 5382-5391.
- Kosse, Anneke, 2011. "Do newspaper articles on card fraud affect debit card usage?," Working Paper Series 1389, European Central Bank.
- Anneke Kosse, 2012. "Do newspaper articles on card fraud affect debit card usage?," DNB Working Papers 339, Netherlands Central Bank, Research Department.
- Cronin, David & McGuinness, Anne, 2010. "Retail Payment Practices. How They Have Evolved in Recent Times and Where They Might Be Going," Quarterly Bulletin Articles, Central Bank of Ireland, pages 56-82, April.
- VAN HOVE, Leo, 2007. "Central Banks and Payment Instruments: a Serious Case of Schizophrenia," MPRA Paper 5281, University Library of Munich, Germany.
- Anneke Kosse & David-Jan Jansen, 2011. "Choosing how to pay: the influence of home country habits," DNB Working Papers 328, Netherlands Central Bank, Research Department.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rob Vet).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.