Debit Card Usage as a Rational Choice: The Moderating Effect of Cash Habit

Dung Phuong Hoang and Thong Huy Vu ()
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Dung Phuong Hoang and Thong Huy Vu: Vietnam Banking Academy, National Economics University

Journal of Economic Development, 2020, vol. 45, issue 1, 159-183

Abstract: This research takes a new perspective in explaining the willingness to use debit cards in which the use of debit cards is treated as a rational choice over cash, its alternative means of payment. Upon the adaption of rational choice theory, this study comprehensively identifies the costs and benefits associated with debit card usage and tests the effects of these forces on debit cardholders’ willingness to use the card. Moreover, this study also investigates the influence of cash habit on the willingness to use debit cards. This research employed both the qualitative method with in-depth interview to develop hypotheses and measurement scales and quantitative survey on 376 Vietnamese debit cardholders to test the conceptual model. The findings indicate that the willingness to use debit cards can be significantly encouraged by enhancing perceived benefits and reducing perceived adaptation costs associated with debit card usage. Moreover, although the habit of using cash does not directly affect willingness to use debit cards, it significantly weakens the positive impacts of perceived benefits and strengthens the negative impacts of perceived adaption costs on willingness to use debit cards.

Keywords: Debit Card; Cash Habit; Rational Choice (search for similar items in EconPapers)
JEL-codes: G21 G41 M31 (search for similar items in EconPapers)
Date: 2020
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