IDEAS home Printed from
   My bibliography  Save this article

Is the debit card revolution finally here?


  • John P. Caskey
  • Gordon H. Sellon


For three decades, experts on payments systems have forecast the imminent arrival of a completely electronic, paperless payment system. In this vision of the future, households, businesses, and government agencies would replace paper transactions with faster, more efficient electronic payments. The centerpiece of this new payment world is the debit card, a magnetically encoded plastic card that would eliminate cash, checks, and even credit cards in most retail transactions.> While some parts of this payment revolution have arrived, in many respects the forecasts have proved to be overly optimistic. The biggest disappointment, thus far, is the debit card. Despite claims of cost savings and greater efficiency, consumers and merchants have been reluctant to switch from traditional payment methods to the debit card.> Caskey and Sellon analyze the factors that have limited the debit card's success and examine prospects for future growth. They find that debit cards are likely to experience strongest growth where consumers find them more convenient than other payment methods, where merchants find them to be cost effective, and where consumers do not have access to a full range of payment alternatives.

Suggested Citation

  • John P. Caskey & Gordon H. Sellon, 1994. "Is the debit card revolution finally here?," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 79-95.
  • Handle: RePEc:fip:fedker:y:1994:i:qiv:p:79-95:n:v.79no.4

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. William Roberds, 1997. "What's really new about the new forms of retail payment?," Economic Review, Federal Reserve Bank of Atlanta, issue Q 1, pages 32-45.
    2. David B. Humphrey, 1996. "The economics of electronic benefit transfer payments," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 77-94.
    3. Ali Zaidi, Syed Najaf & Ali, Syed Babar, 2006. "Risk and Scope of Debit Check Card in Competitive Market of Pakistan," MPRA Paper 64456, University Library of Munich, Germany.
    4. Hancock, Diana & Humphrey, David B., 1997. "Payment transactions, instruments, and systems: A survey," Journal of Banking & Finance, Elsevier, vol. 21(11-12), pages 1573-1624, December.
    5. Santomero, Anthony M & Seater, John J, 1996. "Alternative Monies and the Demand for Media of Exchange," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 942-960, November.
    6. repec:rss:jnljms:v5i11p4 is not listed on IDEAS
    7. Hunt Robert M., 2003. "An Introduction to the Economics of Payment Card Networks," Review of Network Economics, De Gruyter, vol. 2(2), pages 1-17, June.
    8. Carow, Kenneth A. & Staten, Michael E., 1999. "Debit, credit, or cash: survey evidence on gasoline purchases," Journal of Economics and Business, Elsevier, vol. 51(5), pages 409-421, September.
    9. Amanda King & John King, 2011. "Golden eggs versus plastic eggs: hyperbolic preferences and the persistence of debit," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 35(1), pages 93-103, January.
    10. Robert M. Hunt, 2003. "Antitrust issues in payment card networks: can they do that? should we let them?," Business Review, Federal Reserve Bank of Philadelphia, issue Q2, pages 14-23.
    11. David Humphrey & Lawrence Pulley & Jukka Vesala, 2000. "The Check's in the Mail: Why the United States Lags in the Adoption of Cost-Saving Electronic Payments," Journal of Financial Services Research, Springer;Western Finance Association, vol. 17(1), pages 17-39, February.
    12. Brian Mantel & Timothy McHugh, 2001. "Competition and innovation in the consumer e-payments market? considering the demand, supply, and public policy issues," Occasional Paper; Emerging Payments EPS-2001-4, Federal Reserve Bank of Chicago.
    13. Nadia Piffaretti, 1998. "A Theoretical Approach to Electronic Money," Macroeconomics 9803005, EconWPA.

    More about this item


    Debit cards;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedker:y:1994:i:qiv:p:79-95:n:v.79no.4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LDayrit). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.