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.
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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.:
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