In Love with the Debit Card But Still Married to Cash

40 Pages Posted: 21 Mar 2015

See all articles by Carin van der Cruijsen

Carin van der Cruijsen

De Nederlandsche Bank

Lola Hernández

De Nederlandsche Bank

Nicole Jonker

De Nederlandsche Bank (DNB); De Nederlandsche Bank

Date Written: February 26, 2015

Abstract

Using shopping diary survey data we show that changing payment patterns is a challenging task; even when consumers have fallen in love with the debit card, they find it hard to divorce from cash. While seven out of ten Dutch consumers report to prefer using the debit card, only seven out of twenty actually mostly pay by debit card. The likelihood that reported preferences and actual behaviour do not match increases with income, education and age. Consumers with payments in cash-intensive sectors, where the wide acceptance of the debit card is a relatively recent phenomenon, are more likely to overestimate debit card usage than other consumers. The likelihood of a gap also increases with the amount of cash that consumers carry with them and decreases with the average transaction size. Our findings indicate that persistent habits are an important explanation why the substitution of cash by debit cards took place at a slower pace than was expected.

Keywords: payment patterns, cash, debit card, households, survey data, diary data, economic psychology

JEL Classification: C25, D12

Suggested Citation

van der Cruijsen, Carin and Hernández, Lola and Jonker, Nicole, In Love with the Debit Card But Still Married to Cash (February 26, 2015). De Nederlandsche Bank Working Paper No. 461. Available at SSRN: https://ssrn.com/abstract=2580891 or http://dx.doi.org/10.2139/ssrn.2580891

Carin van der Cruijsen (Contact Author)

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

HOME PAGE: http://www.dnb.nl/en/onderzoek-2/onderzoekers/overzicht-persoonlijke-paginas/index.jsp

Lola Hernández

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Nicole Jonker

De Nederlandsche Bank (DNB) ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

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