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Payment Instruments as Perceived by Consumers - a Public Survey

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  • Nicole Jonker

Abstract

Survey results show that Dutch consumers perceive paying in cash as an inexpensive way to pay, while they regard electronic payment cards as relatively expensive. This finding partly explains the low usage of electronic payment cards in point-of-sale (POS) payments. The survey also highlights several non-price features that contribute to the unpopularity of electronic payment cards. The objective of the survey was to identify price and non-price features of payment instruments that can be used to stimulate the use of electronic payment cards. Their attractiveness can be increased, through 1) technological modifications to e-purses and debit cards that enhance their convenience, 2) by increasing the number of acceptance points and 3) by drawing public attention to the speed of e-purse payments. Making it more expensive for consumers to pay in cash could also increase the usage of electronic payment instruments.

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Paper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 053.

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Date of creation: Sep 2005
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Handle: RePEc:dnb:dnbwpp:053
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Web page: http://www.dnb.nl/en/

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Keywords: household survey; cost efficiency; retail payments; payment instruments; nonprice features;

Find related papers by JEL classification:

  • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
  • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
  • G20 - Financial Economics - - Financial Institutions and Services - - - General

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  1. Dotsey, Michael, 1988. "The Demand for Currency in the United States," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(1), pages 22-40, February.
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  6. Fischer, Björn & Köhler, Petra & Seitz, Franz, 2004. "The demand for euro area currencies: past, present and future," Working Paper Series 0330, European Central Bank.
  7. 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.
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Cited by:

  1. Nicole Jonker & Thijs Kettenis, 2007. "Explaining cash usage in the Netherlands: the effect of electronic payment instruments," DNB Working Papers 136, Netherlands Central Bank, Research Department.
  2. Ron Borzekowski & K. Kiser Elizabeth & Ahmed Shaista, 2008. "Consumers' Use of Debit Cards: Patterns, Preferences, and Price Response," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(1), pages 149-172, 02.
  3. Abdullai, Besim, 2009. "The EPS as an e-commerce enabler: The Macedonian perspective," MPRA Paper 13996, University Library of Munich, Germany, revised 05 Mar 2009.
  4. Wilko Bolt & David B. Humphrey & Roland Uittenbogaard, 2005. "The effect of transaction pricing on the adoption of electronic payments: a cross-country comparison," Working Papers 05-28, Federal Reserve Bank of Philadelphia.
  5. Fumiko Hayashi & Joanna Stavins, 2012. "Effects of credit scores on consumer payment choice," Research Working Paper RWP 12-03, Federal Reserve Bank of Kansas City.
  6. Ching, Andrew T. & Hayashi, Fumiko, 2010. "Payment card rewards programs and consumer payment choice," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1773-1787, August.
  7. W. Scott Frame & Lawrence J. White, 2014. "Technological Change, Financial Innovation, and Diffusion in Banking," Working Papers 14-02, New York University, Leonard N. Stern School of Business, Department of Economics.
  8. Ron Borzekowski & Elizabeth K. Kiser, 2006. "The choice at the checkout: quantifying demand across payment instruments," Finance and Economics Discussion Series 2006-17, Board of Governors of the Federal Reserve System (U.S.).
  9. Charles Sprenger & Joanna Stavins, 2008. "Credit card debt and payment use," Working Papers 08-2, Federal Reserve Bank of Boston.
  10. Filipa Lima, 2014. "The use of payments data to improve monetary and financial analysis," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Proceedings of the Porto Workshop on "Integrated management of micro-databases", volume 37, pages 111-114 Bank for International Settlements.
  11. Takala, Kari & Virén, Matti, 2008. "Efficiency and costs of payments : some new evidence from Finland," Research Discussion Papers 11/2008, Bank of Finland.
  12. 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.
  13. Kahn, Charles M. & Roberds, William, 2009. "Why pay? An introduction to payments economics," Journal of Financial Intermediation, Elsevier, vol. 18(1), pages 1-23, January.
  14. repec:hhs:bofrdp:2008_011 is not listed on IDEAS
  15. Marques Benton & Krista Blair & Marianne Crowe & Scott Schuh, 2007. "The Boston Fed study of consumer behavior and payment choice: a survey of Federal Reserve System employees," Public Policy Discussion Paper 07-1, Federal Reserve Bank of Boston.

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