The Costs of Paying - Private and Social Costs of Cash and Card Payments

37 Pages Posted: 17 Oct 2007

See all articles by Mats Bergman

Mats Bergman

Södertörn University, Stockholm

Gabriela Guibourg

Sveriges Riksbank - Research Division

Bjorn L. Segendorf

Sveriges Riksbank

Date Written: September 2007

Abstract

Despite the central role of payments in theoretical and policy oriented economics, there is surprisingly little known about the costs of different payment instruments. We estimate social and private costs of cash, debit and credit card payments in Sweden in 2002. The combined social cost of providing these payment services is approximately 0.4 per cent of GDP. Debit and credit cards are socially less costly than cash for payments above EURO 8 and EURO 18, respectively. Corresponding thresholds for consumers' private costs are somewhat higher. Data indicate a too extensive use of cash relative to card payments in terms of both private and social costs.

Keywords: Cash payments, Card payments, Social costs, Private costs

JEL Classification: D12, D23, D24

Suggested Citation

Bergman, Mats A. and Guibourg, Gabriela and Segendorf, Bjorn L., The Costs of Paying - Private and Social Costs of Cash and Card Payments (September 2007). Riksbank Research Paper Series No. 212, Available at SSRN: https://ssrn.com/abstract=1022266 or http://dx.doi.org/10.2139/ssrn.1022266

Mats A. Bergman (Contact Author)

Södertörn University, Stockholm ( email )

Alfred Nobels allé 7, Flemingsberg
Stockholm, Stockholm 14189
Sweden

Gabriela Guibourg

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden
+46 8 787 0234 (Phone)
+46 8 21 05 31 (Fax)

HOME PAGE: http://www.riksbank.com/research

Bjorn L. Segendorf

Sveriges Riksbank ( email )

Brunkebergstorg 11
SE-103 37 Stockholm
Sweden
+46 8 787 0471 (Phone)
+46 8 21 05 31 (Fax)

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