Economics at your fingertips  

How currency denomination and the ATM affect the way we pay

Oz Shy

Journal of Economics and Business, 2020, vol. 111, issue C

Abstract: I show how currency denomination and the ATM influence consumers’ choice of whether to pay cash for in-person purchases. I identify transaction values above which consumers switch from paying cash to paying with cards. The sharpest changes in the share of cash payments occur at $20 and $40 which coincide with the observation that most ATMs in the US dispense multiples of $20 bills. Other thresholds prevail at multiples of $5 and $10. The above thresholds generate asymmetries in consumer behavior where the share of cash payments increases for payments values just below the thresholds and decreases just above them.

Keywords: Currency denomination; Automated teller machines; ATM; Cash payments; Consumer payment choice; Payment methods; In-person purchases (search for similar items in EconPapers)
JEL-codes: D9 E42 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

DOI: 10.1016/j.jeconbus.2020.105908

Access Statistics for this article

Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter

More articles in Journal of Economics and Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-09-15
Handle: RePEc:eee:jebusi:v:111:y:2020:i:c:s0148619519302942