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Paper or plastic? Payment instrument choice in Uruguay

Author

Listed:
  • Rodrigo Lluberas

    (Banco Central del Uruguay)

  • Joaquín Saldain

    (Banco Central del Uruguay)

Abstract

We study the drivers of Uruguayan households payment instrument choice using a new dataset from the Survey of Uruguayan Household Finances. Survey data and payment system aggregate data show that households are intensive in their use of cash while the use of credit and debit cards is low and stable. Our results show that household characteristics are important drivers of payment instrument choice: income, age and education increase the probability of using plastic. Access to financial services is an important determinant of using plastic over cash. Supply side conditions, like card acceptance at stores, also play a role.

Suggested Citation

  • Rodrigo Lluberas & Joaquín Saldain, 2014. "Paper or plastic? Payment instrument choice in Uruguay," Documentos de trabajo 2014007, Banco Central del Uruguay.
  • Handle: RePEc:bku:doctra:2014007
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    File URL: https://www.bcu.gub.uy/Estadisticas-e-Indicadores/Documentos%20de%20Trabajo/7.2014.pdf
    File Function: First version, 2014
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    References listed on IDEAS

    as
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    3. Marc Rysman, 2007. "An Empirical Analysis Of Payment Card Usage," Journal of Industrial Economics, Wiley Blackwell, vol. 55(1), pages 1-36, March.
    4. Graciela Sanromán & Guillermo Santos, 2014. "Who Holds Credit Cards and Bank Accounts in Uruguay? Evidence from Survey of Uruguayan Households Finances," Documentos de Trabajo (working papers) 0714, Department of Economics - dECON.
    5. Rodrigo Lluberas, 2014. "How people pay in Uruguay: the role of transaction characteristics," Documentos de trabajo 2014005, Banco Central del Uruguay.
    6. Borzekowski, Ron & Kiser, Elizabeth K., 2008. "The choice at the checkout: Quantifying demand across payment instruments," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 889-902, July.
    7. Schmidt-Dengler, Philipp & Stix, Helmut & Huynh, Kim P., 2014. "The Role of Card Acceptance in the Transaction Demand for Money," CEPR Discussion Papers 10183, C.E.P.R. Discussion Papers.
    8. Noelia Cámara & David Tuesta, 2018. "Measuring financial inclusion: a multidimensional index," IFC Bulletins chapters, in: Bank for International Settlements (ed.), The role of data in supporting financial inclusion policy, volume 47, Bank for International Settlements.
    9. Carlos A. Arango & Dylan Hogg & Alyssa Lee, 2015. "Why Is Cash (Still) So Entrenched? Insights From Canadian Shopping Diaries," Contemporary Economic Policy, Western Economic Association International, vol. 33(1), pages 141-158, January.
    10. Schuh, Scott & Stavins, Joanna, 2010. "Why are (some) consumers (finally) writing fewer checks? The role of payment characteristics," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1745-1758, August.
    11. Cohen, Michael & Rysman, Marc, 2012. "Payment Choice with Consumer Panel Data," Working Paper series 148348, University of Connecticut, Charles J. Zwick Center for Food and Resource Policy.
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    Citations

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    Cited by:

    1. Rodrigo Lluberas, 2018. "The effect of government intervention on households' payment instrument choice," Documentos de trabajo 2018010, Banco Central del Uruguay.
    2. Rodrigo Lluberas, 2014. "How people pay in Uruguay: the role of transaction characteristics," Documentos de trabajo 2014005, Banco Central del Uruguay.
    3. Gustavo A. Del Angel, 2016. "Cashless Payments and the Persistence of Cash: Open Questions About Mexico," Economics Working Papers 16108, Hoover Institution, Stanford University.
    4. Elizabeth Bucacos, 2015. "Impact of international monetary policy in Uruguay: a FAVAR approach," Documentos de trabajo 2015003, Banco Central del Uruguay.

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    More about this item

    Keywords

    Payment systems; payment instruments; multihoming;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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