Cash, Check or Bank Card? The Effects of Transaction Characteristics on the Use of Payment Instruments

Telecom Paris Economics and Social Sciences Working Paper No. ESS-06-05

26 Pages Posted: 25 Mar 2006

See all articles by David Bounie

David Bounie

Telecom ParisTech

Abel Francois

Strasbourg University, LARGE; EM Strasbourg Business School; Telecom ParisTech

Date Written: March 2006

Abstract

Exploiting a unique and original dataset of 11,945 payments made from March to May 2005, the paper estimates the determinants of the probability of a transaction being paid by cash, check or bank card at the point of sale. Controlling for individual characteristics, the main results of the paper are: 1) a differentiated effect of the transaction size regarding payment instruments; 2) a specialization effect between payment instruments according to the type of good and spending place; 3) a double supply-side effect due to a restriction of the payment choice and to the organization of the payment process. For the first time ever, detailed data on consumption and payment patterns make it possible to assess the role of transaction characteristics in the use of payment instruments.

Keywords: Payment instruments, money

JEL Classification: G2, E4

Suggested Citation

Bounie, David and Francois, Abel, Cash, Check or Bank Card? The Effects of Transaction Characteristics on the Use of Payment Instruments (March 2006). Telecom Paris Economics and Social Sciences Working Paper No. ESS-06-05. Available at SSRN: https://ssrn.com/abstract=891791 or http://dx.doi.org/10.2139/ssrn.891791

David Bounie (Contact Author)

Telecom ParisTech ( email )

46 rue Barrault
F-75634 Paris, Cedex 13
France

Abel Francois

Strasbourg University, LARGE ( email )

47 avenue de la foret Noire
Strasbourg, 67000
France

HOME PAGE: http://abelfrancois.wordpress.com/information/

EM Strasbourg Business School ( email )

PEGE
61 avenue de la ForĂȘt Noire
Strasbourg, 67000
France

HOME PAGE: http://abelfrancois.wordpress.com/information/

Telecom ParisTech

46, rue Barrault
Paris Cedex 13, F-75634
France

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