The Impact of Contactless Payment on Spending
Journal
International Journal of Economic Sciences
ISSN-Digital
1804-9796
Type
journal article
Date Issued
2014-12-20
Author(s)
Abstract
This paper estimates the effect of contactless payment on the spending ratio in terms of transactions for different transaction types at the point-of-sale. The specific devices that are investigated are debit and credit cards, to which the feature is embedded. Data is drawn from a national representative survey on consumer payment behavior in the US in 2010. Using propensity score matching to control for selection, the estimation shows that the contactless feature yields to a significant increase in the spending ratio at the point-of-sale for both payment methods. The average treatment effect on the treated for credit and debit cards is roughly 8 and 10 percent, respectively. These findings indicate that the private industry can highly benefit from the innovation with respect to new revenue streams. This paper contributes to the existing literature in payment economics by analyzing one of the most recent payment products.
Language
English
Keywords
contactless payment
payment innovation
spending habits
credit and debit cards
nearfield communication (NFC)
propensity score matching
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
IISES
Publisher place
Prague
Volume
3
Number
4
Start page
70
End page
98
Pages
29
Subject(s)
Division(s)
Eprints ID
238071