Retail Payment Innovations and Cash Usage: Accounting for Attrition Using Refreshment Samples
Heng Chen (),
Marie-Helene Felt and
Kim Huynh ()
Staff Working Papers from Bank of Canada
We exploit the panel dimension of the Canadian Financial Monitor (CFM) data to estimate the impact of retail payment innovations on cash usage. We estimate a semiparametric panel data modelthat accounts for unobserved heterogeneity and allows for general forms of non-random attrition. We use annual data from the CFM on the methods of payment and cash usage for the period 2010–12. Estimates based on cross-sectional methods find a large impact of retail payment on cash usage (around 10 percent). However, after correcting for attrition, we find that contactless credit cards and multiple stored-value cards (reloadable) have no significant impact on cash usage, while single-purpose stored-value cards reduce the usage of cash by 2 percent in terms of volume. These results point to the uneven pace of the diffusion of payment innovations, especially contactless credit.
Keywords: Bank notes; E-Money; Econometric and statistical methods; Financial services (search for similar items in EconPapers)
JEL-codes: C35 E41 (search for similar items in EconPapers)
Pages: 74 pages
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Journal Article: Retail payment innovations and cash usage: accounting for attrition by using refreshment samples (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:14-27
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