Privacy, Trust in Banks, and Use of Cash
8 Pages Posted: 24 Feb 2020 Last revised: 16 Nov 2020
Date Written: January 28, 2020
Abstract
This paper reports a cross-sectional study of the use of cash in retail transactions among 36 countries between 2010-17. The retail use of cash in increased with concern for privacy and decreased with trust in banks. An increase in concern for privacy by one standard deviation (equivalent to an increase from the level in France to that in Korea) would be associated with an increase in cash usage by 11.1 percentage points. An increase in trust in banks by one standard deviation (equivalent to an increase from the level in the United States to that in Finland) would be associated with a reduction in cash usage by 15.2 percentage points. These counterfactual estimates are substantial relative to the mean of 70.2 percent.
Keywords: Cash, privacy, trust, banks
JEL Classification: D14, E42
Suggested Citation: Suggested Citation