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7 Results

Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in Canada and the United States

Although credit cards are more expensive for merchants to accept than cash or debit cards, merchants typically pass through their costs evenly to all customers. Along with consumer card rewards and banking fees, this creates cross-subsidies between payment methods. Because higher-income individuals tend to use credit cards more than those with lower incomes, our results indicate that these cross-subsidies might lead to regressive distributional effects.

How Long Does It Take You to Pay? A Duration Study of Canadian Retail Transaction Payment Times

Staff Working Paper 2018-46 Geneviève Vallée
Using an exclusive data set of payment times for retail transactions made in Canada, I show that cash is the most time-efficient method of payment (MOP) when compared with payments by debit and credit cards. I model payment efficiency using Cox proportional hazard models, accounting for consumer choice of MOP.
November 16, 2017

Acceptance and Use of Payments at the Point of Sale in Canada

Merchants universally accept cash. Consumers widely hold cash but also carry debit and credit cards. The cost of using a method of payment has only a small influence on which method consumers use. Large merchants accept all payments, while only two-thirds of small and medium-sized businesses accept credit cards. Merchants report that credit cards are the costliest payment method compared with cash and debit cards. However, costs are not the only consideration. Merchant acceptance of credit accounts for the many con-sumers that want to use credit cards. This interaction between consumers and merchants is known as network externalities.

The Costs of Point-of-Sale Payments in Canada

Using data from our 2014 cost-of-payments survey, we calculate resource costs for cash, debit cards and credit cards. For each payment method, we examine the total cost incurred by consumers, retailers, financial institutions and infrastructures, the Royal Canadian Mint and the Bank of Canada.

Expropriation Risk and FDI in Developing Countries: Does Return of Capital Dominate Return on Capital?

Staff Working Paper 2017-9 M. Akhtaruzzaman, Nathan Berg, Christopher Hajzler
Previously reported effects of institutional quality and political risks on foreign direct investment (FDI) are mixed and, therefore, difficult to interpret. We present empirical evidence suggesting a relatively clear, statistically robust, and intuitive characterization.
November 13, 2014

Firm Strategy, Competitiveness and Productivity: The Case for Canada

At a time when the Bank is expecting a rotation of demand toward exports and investment, and transformative global trends are placing increasing emphasis on innovation, technology and organizational learning, an understanding of the competitiveness strategies of Canadian firms and the factors affecting them has become particularly relevant. This article summarizes findings from a Bank of Canada survey of 151 firms designed to extract signals on elements of firm strategy and organizational capital in order to help inform the macroeconomic outlook.

Labour Reallocation, Relative Prices and Productivity

Staff Working Paper 2010-2 Shutao Cao, Danny Leung
This paper documents the rate at which labour flows between industries and between firms within industries using the most recent data available. It examines the determinants of these flows and their relationship with the productivity growth.
Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Labour markets, Productivity JEL Code(s): D, D2, D23, E, E3, E32, J, J6