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Card-sales response to merchant contactless payment acceptance

David Bounie and Youssouf Camara

Journal of Banking & Finance, 2020, vol. 119, issue C

Abstract: Disruptive innovations in digital payments are happening in a large number of countries around the world. In this paper, we investigate how merchants’ acceptance of a contactless card technology affects card sales. Using score matching and difference-in-difference techniques on a unique sample of about 275,580 merchants in France, we find that accepting contactless payments in 2018 increases the card-sales amount by 15.3 percent on average (and by 17.1 percent the card-sales count) compared to merchants who do not accept contactless payments. We also find evidence that accepting contactless payments exerts a positive spillover of about 1.3 percent in the amount of contact card sales, and thus significantly increases the average annual card-sales amount and count for small merchants and new entrepreneurs.

Keywords: Card acceptance; Contactless cards; Digital payments; Difference-in-difference (search for similar items in EconPapers)
JEL-codes: C21 E21 E42 O33 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:119:y:2020:i:c:s0378426620302004

DOI: 10.1016/j.jbankfin.2020.105938

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