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Payment choice and currency use: Insights from two billion retail transactions

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  • Wang, Zhu
  • Wolman, Alexander L.

Abstract

Using three years of transactions data from a discount retailer with thousands of stores, we study payment variation along three dimensions: transaction size and location; weekly and monthly frequencies; and longer time horizons. In each case, we connect empirical patterns to theories of money demand and payments. We show that cross-sectional and time-series payment patterns are consistent with a theoretical framework in which individual consumers choose between cash and non-cash payments based on a threshold transaction size, and we evaluate factors that may account for the variation in threshold distributions across locations and time.

Suggested Citation

  • Wang, Zhu & Wolman, Alexander L., 2016. "Payment choice and currency use: Insights from two billion retail transactions," Journal of Monetary Economics, Elsevier, vol. 84(C), pages 94-115.
    • Handle: RePEc:eee:moneco:v:84:y:2016:i:c:p:94-115
    DOI: 10.1016/j.jmoneco.2016.10.005
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    References listed on IDEAS

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