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Families' use of payment instruments during a decade of change in the U.S. payment system

  • Elizabeth Klee
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    In the U.S., the share of payments made "electronically"--with credit cards, debit cards, and direct payments--grew from 25 percent in 1995 to over 50 percent in 2002 (BIS, 2004). This paper frames this aggregate change in the context of individual behavior. Family level data indicate that the share of families using or holding these instruments also increased over the same period. The personal characteristics that predict use and holdings are relatively constant over time. Furthermore, the results indicate that the aggregate change may be correlated with a greater incidence in "multihoming", or use of multiple payment instruments. In addition, the paper offers evidence that the dimensions over which families multihome differ across payment instruments. The results presented in this paper document a significant change in the payment system, inform payment system policies, and provide evidence of technology adoption behavior more generally.

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    Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2006-01.

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    Date of creation: 2006
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    Handle: RePEc:fip:fedgfe:2006-01
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