Cash or Card? Evidence from a Large‐Scale Field Experiment to Increase Consumers' Debit Card Use

Michael King (), Paolina Medina (), Roland Umanan () and Ray Charles Howard ()
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Michael King: Department of Economics, Trinity College Dublin
Paolina Medina: University of Houston
Roland Umanan: Department of Economics, Trinity College Dublin, University of Dublin
Ray Charles Howard: University of Virginia

Economic Papers from Trinity College Dublin, Economics Department

Abstract: Cash remains a dominant payment method in many markets despite the widespread availability of digital alternatives such as debit cards, creating costs for consumers, firms, and governments. This research examines which interventions most effectively increase debit‐card use, how effectiveness varies with incentive form and amount, and whether average effects conceal meaningful differences across customers. A large‐scale randomized field experiment with approximately 1.5 million customers of a Mexican bank tests cash and gift‐card incentives of 60 and 300 MXN, repeated benefit‐focused nudges, and combinations of nudges with cash incentives. Estimated treatment effects on debit‐card transaction frequency and spending range from approximately 0% to 5%, with larger incentives producing less‐than‐proportional gains in transaction frequency and incentive‐form effects varying across outcomes and incentive amounts. Causal‐forest estimates show substantial treatment‐effect heterogeneity: for example, the effect of the 300 MXN cash incentive is concentrated among customers with relatively high baseline debit‐card use, while some near‐zero average effects mask offsetting positive and negative subgroup responses. Nudges have small nonsignificant effects alone and no detectable incremental effect when combined with cash incentives. These findings show that effective payment‐activation strategies depend not only on intervention design but also on which customers receive them.

Keywords: Financial Inclusion; Debit Cards; Cash and In-kind Incentives; Nudges; Spillover Effects (search for similar items in EconPapers)
JEL-codes: C93 D12 D14 D18 G21 G51 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2026-08
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