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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.

Suggested Citation

  • Nicole Jonker, 2005. "Payment Instruments as Perceived by Consumers - a Public Survey," DNB Working Papers 053, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:053
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    File URL: https://www.dnb.nl/binaries/Working%20Paper%2053_tcm46-146710.pdf
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    References listed on IDEAS

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    1. Seitz, Franz & Fischer, Björn & Köhler, Petra, 2004. "The demand for euro area currencies: past, present and future," Working Paper Series 330, European Central Bank.
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    3. 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.
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    5. Humphrey, David B & Pulley, Lawrence B & Vesala, Jukka M, 1996. "Cash, Paper, and Electronic Payments: A Cross-Country Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 914-939, November.
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    7. Hyytinen, Ari & Takalo, Tuomas, 2004. "Multihoming in the market for payment media : evidence from young Finnish consumers," Research Discussion Papers 25/2004, Bank of Finland.
    8. Humphrey, David B & Kim, Moshe & Vale, Bent, 2001. "Realizing the Gains from Electronic Payments: Costs, Pricing, and Payment Choice," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 216-234, May.
    9. W. Bolt, 2003. "Retail Payments in the Netherlands: some Facts and Some Theory," WO Research Memoranda (discontinued) 722, Netherlands Central Bank, Research Department.
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    11. 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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    Citations

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    Cited by:

    1. 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.
    2. Wilko Bolt & David Humphrey & Roland Uittenbogaard, 2005. "The Effect of Transaction Pricing on the Adoption of Electronic Payments: A Cross-Country Comparison," DNB Working Papers 071, Netherlands Central Bank, Research Department.
    3. 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, February.
    4. Charles Sprenger & Joanna Stavins, 2008. "Credit card debt and payment use," Working Papers 08-2, Federal Reserve Bank of Boston.
    5. 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.
    6. 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.
    7. 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.
    8. Takala, Kari & Virén, Matti, 2008. "Efficiency and costs of payments : some new evidence from Finland," Research Discussion Papers 11/2008, Bank of Finland.
    9. Fumiko Hayashi & Joanna Stavins, 2012. "Effects of credit scores on consumer payment choice," Public Policy Discussion Paper 12-1, Federal Reserve Bank of Boston.
    10. W. Scott Frame & Lawrence J. White, 2009. "Technological Change, Financial Innovation, and Diffusion in Banking," Working Papers 09-03, New York University, Leonard N. Stern School of Business, Department of Economics.
    11. 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.
    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. Daniele Di Giulio & Carlo Milani, 2013. "Plastic Money Diffusion and Usage: An Empirical Analysis on Italian Households," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 42(1), pages 47-74, February.
    14. 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.
    15. 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.

    More about this item

    Keywords

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

    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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