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The Cost of Consumer Payments in Sweden

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  • Segendorf, Björn

    ()
    (Financial Stability Department, Central Bank of Sweden)

  • Jansson, Thomas

    ()
    (Financial Stability Department, Central Bank of Sweden)

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    Abstract

    We estimate the social and private costs of consumer-to-business payments in Sweden in 2009. The combined social cost for these payments was 0.68 per cent of GDP. At the point of sale, cash is socially less costly than debit cards for payments below EUR 1.88 (SEK 20) and credit cards below EUR 42.37 (SEK 450). The corresponding thresholds for the individual consumer are higher for debit cards and much lower for credit cards. Using unique survey data we show that consumers’ payment behaviour is not consistent with what is socially optimal.

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    File URL: http://www.riksbank.se/Documents/Rapporter/Working_papers/2012/rap_wp262_120619.pdf
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    Bibliographic Info

    Paper provided by Sveriges Riksbank (Central Bank of Sweden) in its series Working Paper Series with number 262.

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    Length: 58 pages
    Date of creation: 01 Jun 2012
    Date of revision:
    Handle: RePEc:hhs:rbnkwp:0262

    Contact details of provider:
    Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
    Phone: 08 - 787 00 00
    Fax: 08-21 05 31
    Email:
    Web page: http://www.riksbank.com/
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    Related research

    Keywords: Cash payments; Card payments; Credit transfers; Direct debits; Social costs; Private costs;

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    1. 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.
    2. Humphrey, David & Willesson, Magnus & Bergendahl, Goran & Lindblom, Ted, 2006. "Benefits from a changing payment technology in European banking," Journal of Banking & Finance, Elsevier, Elsevier, vol. 30(6), pages 1631-1652, June.
    3. Garcia-Swartz Daniel D. & Hahn Robert W. & Layne-Farrar Anne, 2006. "The Move Toward a Cashless Society: A Closer Look at Payment Instrument Economics," Review of Network Economics, De Gruyter, De Gruyter, vol. 5(2), pages 1-24, June.
    4. Humphrey, David B & Kim, Moshe & Vale, Bent, 2001. "Realizing the Gains from Electronic Payments: Costs, Pricing, and Payment Choice," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 33(2), pages 216-34, May.
    5. Garcia-Swartz Daniel D. & Hahn Robert W. & Layne-Farrar Anne, 2006. "The Move Toward a Cashless Society: Calculating the Costs and Benefits," Review of Network Economics, De Gruyter, De Gruyter, vol. 5(2), pages 1-30, June.
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