Merchants' Costs of Accepting Means of Payment: Is Cash the Least Costly?

Carlos Alberto Arango and Varya Taylor
Additional contact information
Varya Taylor: Bank of Canada, https://www.bankofcanada.ca/

Bank of Canada Review, 2008, vol. 2008-2009, issue Winter, 17-25

Abstract: In a competitive sales environment, merchants are compelled to offer consumers the option of paying for goods and services using a variety of payment methods, including cash, debit card, or credit card. Each method entails different costs and benefits to merchants. To better understand the costs of accepting retail payments, the Bank of Canada surveyed over 500 Canadian merchants and found that most consider cash the least costly. This article investigated this perception by calculating the variable costs per transaction of accepting different means of payment. The findings are that costs for each payment method vary by merchant and transaction value, with debit cards the least costly payment for a broad cross-section of merchants.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://www.bankofcanada.ca/wp-content/uploads/2010/06/arango_taylor.pdf full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bca:bcarev:v:2009:y:2009:i:winter08-09:p:17-25

Access Statistics for this article

More articles in Bank of Canada Review from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().