Cashless Stores and Cash Users
27 Pages Posted: 21 May 2019 Last revised: 16 Feb 2021
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Cashless Stores and Cash Users
Cashless Stores and Cash Users
Date Written: February 14, 2021
Abstract
The emergence of cashless stores has led several cities and states to ban such stores. This article investigates this policy issue by characterizing consumers who pay cash for in-person purchases and banked and unbanked consumers who do not have credit or debit cards. Using a random utility model, I simulate the effects on consumer welfare caused by a hypothetical complete transition to cashless stores. The simulations show that the burden from this transition on consumers with no credit or debit cards is seven times higher than the burden on consumers who have both cards. The conclusion lists policy options for alternatives to cash that may be needed before all brick-and-mortar stores become cashless.
Keywords: Cashless stores, , policy options for alternatives to cash, banning cashless stores, consumer payment choice, in-person purchases.
JEL Classification: D9, E42
Suggested Citation: Suggested Citation