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Jurnal

Journal of Banking and Finance

Keyword

• Cash; • Debit and credit cards; • Reward programs; • Retail payment systems

Pengarang

  1. C. Arango
  2. K.P. Huynh
  3. L. Sabetti

    Subject

    1. BANKING
    2. FINANCE

      [Abstrak]

      Using transaction-level data from a three-day shopping diary, we estimate a model of consumer payment instrument choice that disentangles the effect of merchant card acceptance from credit card pricing incentives (rewards) at the point-of-sale. The lack of merchant card acceptance plays a large role in the use of cash, especially for low-value transactions (less than 25 dollars). Participation in a credit card rewards program induces a shift toward credit card usage at the expense of both debit cards and cash. In contrast, changes in the amount of rewards (ad valorem) has a small or inelastic effect on the probability of paying with credit cards. Our findings highlight the importance of the two-sided nature of retail payment systems and provide key insights into consumer and merchant behaviour.

      Periode

      Vol 55, Tahun 2015

      [Berkas]

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