Cash Management and Payment Choices: A Simulation Model with International Comparisons Staff Working Paper 2013-53 Carlos Arango, Yassine Bouhdaoui, David Bounie, Martina Eschelbach, Lola Hernández Despite various payment innovations, today, cash is still heavily used to pay for low-value purchases. This paper develops a simulation model to test whether standard implications of the theory on cash management and payment choices can explain the use of payment instruments by transaction size. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Financial services, International topics JEL Code(s): C, C6, C61, E, E4, E41, E47
The Impact of Retail Payment Innovations on Cash Usage Staff Working Paper 2012-14 Ben Fung, Kim Huynh, Leonard Sabetti Many predict that innovations in retail payment may render cash obsolete. We investigate this possibility in the context of recent payment innovations such as contactless-credit and stored-value cards. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial services, Payment clearing and settlement systems JEL Code(s): C, C3, C35, C8, C83, E, E4, E41
Why Is Cash (Still) So Entrenched? Insights from the Bank of Canada’s 2009 Methods-of-Payment Survey Staff Discussion Paper 2012-2 Carlos Arango, Dylan Hogg, Alyssa Lee The authors present key insights from the Bank of Canada’s 2009 Methods-of-Payment survey. In the survey, about 6,800 participants completed a questionnaire with detailed information regarding their personal finances, as well as their use and perceptions of different payment methods. Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Financial services JEL Code(s): D, D1, D12, E, E4, E41, L, L8, L81
How Do You Pay? The Role of Incentives at the Point-of-Sale Staff Working Paper 2011-23 Carlos Arango, Kim Huynh, Leonard Sabetti This paper uses discrete-choice models to quantify the role of consumer socioeconomic characteristics, payment instrument attributes, and transaction features on the probability of using cash, debit card, or credit card at the point-of-sale. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Econometric and statistical methods, Financial services JEL Code(s): C, C3, C35, C8, C83, E, E4, E41
Money and Costly Credit Staff Working Paper 2011-7 Mei Dong I study an economy in which money and credit coexist as means of payment and the settlement of credit requires money. The model extends recent developments in microfounded monetary theory to address the choice of payment methods and the effects of inflation. Whether a buyer uses money or credit depends on the fixed cost of credit and the inflation rate. Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Inflation: costs and benefits JEL Code(s): E, E4, E41, E5, E50
The Role of Convenience and Risk in Consumers' Means of Payment Staff Discussion Paper 2009-8 Carlos Arango, Varya Taylor Using data from a 2004 survey of the Canadian public, the authors study the role of convenience and risk in consumers' use of cash relative to debit and credit cards. The authors find that consumers who perceive debit cards and credit cards to be more convenient and less risky than cash use them more frequently. Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes JEL Code(s): E, E4, E41, L, L2
Merchant Acceptance, Costs, and Perceptions of Retail Payments: A Canadian Survey Staff Discussion Paper 2008-12 Carlos Arango, Varya Taylor Using the results of a survey on accepted means of payment, the authors examine merchant preferences and perceptions of retail payment reliability, risk, and costs; the share of each type of payment method over total sales; and the costs involved in accepting payments. Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes JEL Code(s): E, E4, E41, L, L2
Endogenously Segmented Asset Market in an Inventory Theoretic Model of Money Demand Staff Working Paper 2007-46 Jonathan Chiu This paper studies the effects of monetary policy in an inventory theoretic model of money demand. In this model, agents keep inventories of money, despite the fact that money is dominated in rate of return by interest bearing assets, because they must pay a fixed cost to transfer funds between the asset market and the goods market. Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy framework, Monetary policy transmission JEL Code(s): E, E3, E31, E4, E41, E5, E50
Money Demand and Economic Uncertainty Staff Working Paper 2004-25 Joseph Atta-Mensah The author examines the impact of economic uncertainty on the demand for money. Content Type(s): Staff research, Staff working papers Topic(s): Monetary aggregates JEL Code(s): E, E4, E41, E5, E50
The Demand for Money in a Stochastic Environment Staff Working Paper 2004-7 Joseph Atta-Mensah The author re-examines the demand-for-money theory in an intertemporal optimization model. The demand for real money balances is derived to be a function of real income and the rates of return of all financial assets traded in the economy. Content Type(s): Staff research, Staff working papers Topic(s): Monetary aggregates JEL Code(s): E, E4, E41, E5, E50, G, G1, G11