Consumer Use of Multiple Payment Methods

Oz Shy
Working Paper 2019-19
October 2019

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The paper investigates the degree to which buyers choose to diversify their use of payment methods for in-person purchases. Some buyers use only one payment instrument. Others combine the use of mostly cash, credit, debit cards, and a few paper checks and prepaid cards. To each survey respondent, I apply three concentration measures over the use of payment instruments. Results show that the degree of consumers' payment concentration exhibits almost no correlation with consumer demographics, payment volume, or aggregate value.

JEL classification: D9, E42

Key words: multiple payment methods, consumer payment choice, payment instruments, in-person purchases, concentration measures

https://doi.org/10.29338/wp2019-19Off-site link


The author thanks two anonymous referees and the editor for most valuable comments and suggestions on an earlier draft. The views expressed here are those of the author and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the author's responsibility.

Please address questions regarding content to Oz Shy, Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street NE, Atlanta, GA 30309, oz.shy@atl.frb.org.

Federal Reserve Bank of Atlanta working papers, including revised versions, are available on the Atlanta Fed's website at www.frbatlanta.org. Click "Publications" and then "Working Papers." To receive e-mail notifications about new papers, use frbatlanta.org/forms/subscribe.