The Impact of Contactless Payment on Spending

Tobias Truetsch (tobias.truetsch@unisg.ch)
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Tobias Truetsch: University of St.Gallen

No 702228, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: This paper estimates the effect of contactless payment on the spending ratio in terms of transactions for different transaction types at the point-of-sale. The specifc devices that are investigated are debit and credit cards, to which the feature is embedded. Data is drawn from a national representative survey on consumer payment behavior in the US in 2010. Using propensity score matching to control for selection, the estimation shows that the contactless feature yields to a signifcant increase in the spending ratio at the point-of-sale for both payment methods. The average treatment effect on the treated for credit and debit cards is roughly 8 and 10 percent, respectively. These fndings indicate that the private industry can highly benefit from the innovation with respect to new revenue streams. This paper contributes to the existing literature in payment economics by analyzing one of the most recent payment products.

Keywords: contactless payment; payment innovation; spending habits; credit and debit cards; near-feld communication (NFC); propensity score matching (search for similar items in EconPapers)
JEL-codes: C21 D12 D14 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-10
New Economics Papers: this item is included in nep-ban
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Published in Proceedings of the Proceedings of the 12th International Academic Conference, Prague, Oct 2014, pages 1307-1333

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iacpro:0702228

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