Merchant Acceptance of Cash and Credit Cards at the Point of Sale
Ben Fung,
Kim Huynh,
Kerry Nield and
Angelika Welte
No 2018-1, Staff Analytical Notes from Bank of Canada
Abstract:
Recent data show that the use of credit cards in Canada has been increasing, while the use of cash has been declining. At the same time, only two-thirds of small or medium-sized businesses accept credit cards. To better understand future development of this trend, it is important to study whether a change in merchant fees will increase credit card acceptance and will thus further reduce cash use. In this note, we calculate the level of the merchant fee where a merchant would be indifferent to accepting a credit card or cash payment, using the merchant indifference test. We find that the results are sensitive to the underlying assumptions. Furthermore, we discuss several main issues of applying such a methodology to Canada.
Keywords: Bank notes; Digital Currencies; Econometric and statistical methods; Financial services (search for similar items in EconPapers)
JEL-codes: C2 D1 E41 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)
Downloads: (external link)
https://www.bankofcanada.ca/wp-content/uploads/2018/01/san2018-1.pdf Full text (application/pdf)
Related works:
Journal Article: Merchant acceptance of cash and credit cards at the point of sale (2018) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bca:bocsan:18-1
Access Statistics for this paper
More papers in Staff Analytical Notes from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().