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Title:Why is cash (still) so entrenched? Insights from the Bank of Canada's 2009 methods-of-Payment survey PDF Logo
Authors:Arango,Carlos
Hogg, Dylan
Lee, Alyssa
Issue Date:2012
Series/Report no.:Bank of Canada Discussion Paper 2012-2
Abstract:The authors present key insights from the Bank of Canada's 2009 Methods-of-Payment survey. In the survey, about 6,800 participants completed a questionnaire with detailed information regarding their personal finances, as well as their use and perceptions of different payment methods. In addition, about 3,500 participants completed a 3-day diary recording information on each transaction, including the value and the payment instrument chosen. One of the main findings from the diaries is that, even though debit and credit cards account for close to 80 per cent of all transactions in terms of total value, cash is still the predominant payment method in terms of volume, accounting for 54 per cent of all transactions. Using the payment records from the diaries, the authors estimate a simple model of choice between cash and other payment methods. The results suggest that the main reasons why cash is still a popular payment instrument in Canada, especially for small-value transactions, are its wide acceptance among merchants, high ease of use or speed, low handling costs, simplicity as a tool to control spending, and anonymity.
Subjects:Bank notes
Financial services
JEL:E41
D12
L81
Document Type:Working Paper
Appears in Collections:Bank of Canada Discussion Papers

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