Cash or Card? Retail Payments in Armenia

Kristina Shvandar and Vsevolod Y. Cherkasov ()
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Vsevolod Y. Cherkasov: Financial Research Institute, Moscow 127006, Russia

Finansovyj žhurnal — Financial Journal, 2018, issue 6, 109-119

Abstract: The article discusses the problem of penetration of non-cash payment instruments into the retail market. Settlements without cash facilitate transparency of transactions. Limitation of the allowable amount of cash payment for retail purchases, which has examples in the world, can facilitate counteraction to transactions that hide criminal activity and tax evasion. However, the grounds for large cash payments limitation are convincing when non-cash instruments have penetrated deeply into the small transactions market. Payment cards compete with cash in transactional costs, and their competitiveness depends on the size of interchange fee. The authors assume, that restricting the allowable amount of cash payments would be a rational step for Armenia to restrain shadow economic activity, but non-cash payment instruments should penetrate deeper into the retail market at first. Efficient solutions could be facilitated by a study of costs in the payment system.

Keywords: non-cash payments; restrictions on cash payments; costs; interchange fee; Armenia (search for similar items in EconPapers)
JEL-codes: E42 E51 H26 J33 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:fru:finjrn:180609:p:109-119

DOI: 10.31107/2075-1990-2018-6-109-119

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