Losing contact: The impact of contactless payments on cash usage

Arbeitspapier

I investigate the impact of contactless credit cards (CTCs) on cash use in Canada, using panel data between 2010 and 2017. I show that ignoring unobserved heterogeneity would lead to overstating the impact of CTCs on cash usage in a linear model. Using finite mixture modelling, I provide evidence of the differential impacts of CTCs on the extensive versus intensive margins of cash usage. I use a two-part model, with an exclusion restriction for better identification, to model both margins separately. I obtain that CTC use negatively influences the intensive margin of cash usage but not its extensive margin. There is no clear evidence of an S-curve pattern in the impact of CTCs on cash usage over the sample period.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bank of Canada Staff Working Paper ; No. 2020-56

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Consumer Economics: Empirical Analysis ; Demand for Money
• Subject: Bank notes ; Digital currencies and fintech ; Econometric and statistical methods ; Financial services

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Felt, Marie-Hélène
• Event: Veröffentlichung
• (who): Bank of Canada
• (where): Ottawa
• (when): 2020

Further information

• DOI: doi:10.34989/swp-2020-56
• Handle: http://hdl.handle.net/10419/241222
• Last update: 10.03.2025, 11:43 AM CET