How Do Debit Cards Affect Cash Demand? Survey Data Evidence
This paper analyzes how EFT-POS payments and ATM withdrawals affect purse cash demand. In particular, survey data about Austrian individuals are employed to estimate a cash demand equation which takes account of sample selection effects. The results reveal that purse cash demand is significantly affected by debit card usage and that there are significant differences in cash demand for individuals with different debit card usage frequencies. For example, the point estimates imply that individuals who pay frequently with their debit card hold about 20% less purse cash than all others while frequent ATM withdrawals are associated with about 18% less purse cash demand. Due to the relative small share of frequent users, currently, aggregate purse cash demand is not very strongly affected by EFT-POS payments. However, if usage behavior shifts towards higher usage frequencies, then the findings of this study suggest that purse cash demand will decrease substantially.
(This abstract was borrowed from another version of this item.)
References listed on IDEAS
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.:
- Sheri M. Markose & Yiing Jia Loke, 2003.
"Network Effects On Cash-Card Substitution In Transactions And Low Interest Rate Regimes,"
Royal Economic Society, vol. 113(487), pages 456-476, 04.
- Markose, Sheri M & Loke, Yiing Jia, 2000. "Network effects on Cash-Card Substitution in Transactions and Low Interest Rate Regimes," Economics Discussion Papers 3739, University of Essex, Department of Economics.
- John V. Duca & William C. Whitesell, 1991.
"Credit cards and money demand: a cross-sectional study,"
9112, Federal Reserve Bank of Dallas.
- Duca, John V & Whitesell, William C, 1995. "Credit Cards and Money Demand: A Cross-sectional Study," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 604-23, May.
- Orazio Attanasio & Luigi Guiso & Tullio Jappelli, 1998.
"The Demand for Money, Financial Innovation, and the Welfare Cost of Inflation: An Analysis with Households' Data,"
CSEF Working Papers
03, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Orazio P. Attanasio & Luigi Guiso & Tullio Jappelli, 2002. "The Demand for Money, Financial Innovation, and the Welfare Cost of Inflation: An Analysis with Household Data," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 317-351, April.
- Orazio Attanasio & Luigi Guiso & Tuillo Jappelli, 1998. "The Demand for Money, Financial Innovation, and the Welfare Cost of Inflation: An Analysis with Household Data," NBER Working Papers 6593, National Bureau of Economic Research, Inc.
- Attanasio, Orazio & Guiso, Luigi & Jappelli, Tullio, 1998. "The Demand for Money, Financial Innovation and the Welfare Cost of Inflation: An Analysis with Households' Data," CEPR Discussion Papers 1927, C.E.P.R. Discussion Papers.
- Mathias Drehmann & Charles Goodhart & Malte Krueger, 2002. "The challenges facing currency usage: will the traditional transaction medium be able to resist competition from the new technologies?," Economic Policy, CEPR;CES;MSH, vol. 17(34), pages 193-228, 04.
- Brian M. Doyle, 2000. ""Here, dollars, dollars ..."estimating currency demand and worldwide currency substitution," International Finance Discussion Papers 657, Board of Governors of the Federal Reserve System (U.S.).
- Paunonen, Heli & Jyrkönen, Hanna, 2002. "Cash usage in Finland : How much can be explained?," Research Discussion Papers 10/2002, Bank of Finland.
- Laura Rinaldi, . "Payment Cards and Money Demand in Belgium," International Economics Working Papers Series ces0116, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, International Economics.
- Jussi Snellman & Jukka Vesala & David Humphrey, 2001. "Substitution of Noncash Payment Instruments for Cash in Europe," Journal of Financial Services Research, Springer;Western Finance Association, vol. 19(2), pages 131-145, April.
When requesting a correction, please mention this item's handle: RePEc:kap:empiri:v:31:y:2004:i:2:p:93-115. 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: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.