Choosing How to Pay: The Influence of Home Country Habits

36 Pages Posted: 27 Dec 2011

See all articles by Anneke Kosse

Anneke Kosse

Government of Canada - Bank of Canada

David-Jan Jansen

De Nederlandsche Bank ; Vrije Universiteit Amsterdam, School of Business and Economics; Tinbergen Institute

Date Written: December 27, 2011

Abstract

Is having a foreign background a relevant factor in choosing between payment instruments in consumer point-of-sale transactions? We analyze this question using a unique diary survey in which both participants with a Dutch and a foreign background documented their daily purchases. Payment habits acquired in home countries continue to affect the mode of payment after migration. First generation migrants born in cash-oriented economies are more likely to use cash in point-of-sale transactions. However, the second-generation has similar payment habits as individuals with a Dutch background. This finding suggests that payment behavior is not passed on from generation to generation, but molded by host country payment habits. Finally, we suggest that special information campaigns to increase debit card usage will not have clear net social benefits.

Keywords: consumer payments, habits, debit card, cash, migration

JEL Classification: C25, D12

Suggested Citation

Kosse, Anneke and Jansen, David-Jan, Choosing How to Pay: The Influence of Home Country Habits (December 27, 2011). De Nederlandsche Bank Working Paper No. 328, Available at SSRN: https://ssrn.com/abstract=1977192 or http://dx.doi.org/10.2139/ssrn.1977192

Anneke Kosse (Contact Author)

Government of Canada - Bank of Canada ( email )

234 Wellington Street
Ontario, Ottawa K1A 0G9
Canada

David-Jan Jansen

De Nederlandsche Bank ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

HOME PAGE: http://sites.google.com/site/djansenresearch

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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