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In love with the debit card but still married to cash

Author

Listed:
  • Carin van der Cruijsen
  • Lola Hernandez
  • Nicole Jonker

Abstract

Using shopping diary survey data we show that changing payment patterns is a challenging task; even when consumers have fallen in love with the debit card, they find it hard to divorce from cash. While seven out of ten Dutch consumers report to prefer using the debit card, only seven out of twenty actually mostly pay by debit card. The likelihood that reported preferences and actual behaviour do not match increases with income, education and age. Consumers with payments in cash-intensive sectors, where the wide acceptance of the debit card is a relatively recent phenomenon, are more likely to overestimate debit card usage than other consumers. The likelihood of a gap also increases with the amount of cash that consumers carry with them and decreases with the average transaction size. Our findings indicate that persistent habits are an important explanation why the substitution of cash by debit cards took place at a slower pace than was expected.

Suggested Citation

  • Carin van der Cruijsen & Lola Hernandez & Nicole Jonker, 2015. "In love with the debit card but still married to cash," DNB Working Papers 461, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:461
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    References listed on IDEAS

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    1. repec:kap:jfsres:v:52:y:2017:i:1:d:10.1007_s10693-017-0281-6 is not listed on IDEAS
    2. Laurent, Alain & Monvoisin, Virginie, 2015. "Les nouvelles monnaies numériques : au-delà de la dématérialisation de la monnaie et de la contestation des banques," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 18.
    3. Sinelnikova-Muryleva, Elena, 2018. "Analysis of the Consequences of the Development of Payment Systems for Monetary Policy in the Context of Deepening Financial Markets," Working Papers 031813, Russian Presidential Academy of National Economy and Public Administration.
    4. Esselink, Henk & Hernández, Lola, 2017. "The use of cash by households in the euro area," Occasional Paper Series 201, European Central Bank.
    5. Stavins, Joanna, 2017. "How do consumers make their payment choices?," Research Data Report 17-1, Federal Reserve Bank of Boston.
    6. Walter blocher & Andreas Hanl & Jochen Michaelis, 2017. "Revolutionieren Kryptowährungen die Zahlungssysteme?," MAGKS Papers on Economics 201748, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. Jonker, Nicole & Hernandez, Lola & de Vree, Renate & Zwaan, Patricia, 2017. "From cash to cards: how debit card payments overtook cash in the Netherlands," International Cash Conference 2017 – War on Cash: Is there a Future for Cash? 168371, Deutsche Bundesbank.

    More about this item

    Keywords

    payment patterns; cash; debit card; households; survey data; diary data; economic psychology;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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