The Costs of Point-of-Sale Payments in Canada
Heng Chen (),
Kerry Nield and
Angelika Welte ()
Discussion Papers from Bank of Canada
This study provides insight into the costs of cash, debit card and credit card payments made at the point of sale in Canada in 2014. For each payment method, it examines the total resource costs, which capture the overall use of resources by society as a whole. Using extensive survey data from retailers, financial institutions and cash transportation companies as well as internal and external data sources, the results show that the resource costs of payments in Canada are non-negligible (0.78 per cent of GDP). Credit cards are most costly in terms of resource costs per transaction, while cash carries the highest resource costs per dollar transacted. Debit cards are the least costly, both in terms of costs per transaction and costs per dollar in sales. The study also demonstrates how the costs vary with transaction sizes. Considering the variable resource costs only, cash is found to be cheapest for transactions up to $6, while debit cards are the least costly for transactions larger than $6. The study also looks into the total private costs, which are the costs incurred by each stakeholder, thereby providing insight into how costs are affecting the use and acceptance of payment methods.
Keywords: Bank notes; Financial Institutions; Payment clearing and settlement systemsing (search for similar items in EconPapers)
JEL-codes: D12 D23 D24 E41 E42 G21 L2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bca:bocadp:17-4
Access Statistics for this paper
More papers in Discussion Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().