Time is Money: A Survey of the Social Cost of Payment Instruments

Vivien Deak (), Laszlo Kajdi (), Istvan Nemecsko () and Tamas Vegso ()
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Vivien Deak: Magyar Nemzeti Bank
Laszlo Kajdi: Magyar Nemzeti Bank
Istvan Nemecsko: Magyar Nemzeti Bank
Tamas Vegso: Magyar Nemzeti Bank

Financial and Economic Review, 2022, vol. 21, issue 2, 5-36

Abstract: The number of payment transactions in Hungary has increased by almost one and a half times over ten years. The use of electronic payment instruments has grown dynamically, while only a moderate increase in cash use was observed. The analysis shows the evolution of the payments market and quantifies the social costs attached to the use of payment instruments. The value of the latter was HUF 832 billion in 2019, representing real growth of 20 per cent over 10 years, mainly due to the costs of developing the acquiring infrastructure and the significant increase in the number of transactions. The real cost per transaction has fallen by 10 per cent for cash, by one half for cards and by one sixth for credit transfers, reflecting the improved efficiency. As electronic payment is now available in most retail payment situations, the cost per transaction is expected to decrease further in the coming years as volume increases.

Keywords: payments; payment instrument; social cost; unit cost (search for similar items in EconPapers)
JEL-codes: D12 D23 D24 E42 (search for similar items in EconPapers)
Date: 2022
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