Cashless Stores and Cash Users

Oz Shy

No 2019-11, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: The emergence of cashless stores has led several cities and states to ban such stores. This article investigates this issue by characterizing consumers who pay cash for in-person purchases and consumers who do not have credit or debit cards. Using a random utility model, I estimate 1.3 to 30.9 percentage drop in average per-payment consumer surplus if all stores were to become cashless and when utility is measured by the cost of making a payment, security, and convenience. The conclusion provides a discussion of alternatives to cash for in-person purchases that may be needed before all brick-and-mortar stores become cashless.

Keywords: cashless stores; banning cashless stores; consumer payment choice; in-person purchases; alternatives to cash; random utility (search for similar items in EconPapers)
JEL-codes: D9 E42 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2019-05-01
New Economics Papers: this item is included in nep-mac and nep-pay
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Cashless stores and cash users (2021)
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DOI: 10.29338/wp2019-11a

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