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Show me the money! Experimental evidence on preferences for cash vs. digital payment

Author

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  • Ambler, Kate
  • Bakhtiar, M. Mehrab
  • Bloem, Jeffrey R.
  • Uddin, Mohammad Riad

Abstract

In places such as rural Bangladesh, cash is the dominant medium for payments despite potential benefits of digital payments. We offer survey respondents an incentive-compatible choice for compensation: 200 Taka cash or randomly varied mobile money amounts (200-400 Taka). Only eight percent chose digital payment at parity and respondents exhibit an average willingness-to-pay of 43 percent of the payment value to receive cash payment. This preference persists across demographics, including among mobile money account holders. Within-household analysis reveals that 77 percent of the effect stems from individual-level rather than household-level factors, highlighting the importance of demand-side barriers on digital payments.

Suggested Citation

  • Ambler, Kate & Bakhtiar, M. Mehrab & Bloem, Jeffrey R. & Uddin, Mohammad Riad, 2025. "Show me the money! Experimental evidence on preferences for cash vs. digital payment," IFPRI discussion papers 2385, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:178890
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