Consumer Credit and Payment Cards
November 7, 2011
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ECB has posted some new WP from a retail payment conference held in May this year. This paper explores why people still use so much cash, despite other and cheaper electronic alternatives are available. They find that the liquidity monitoring is better done with cash, i.e. you know what your remaining balance is, and that this function of cash is important for several liquidity pressed groups of the population. Still, they wonder about the large cross-country differences, where cultural tradition also plays a role. The paper should be of interest for those working in the payment system area, but it has also a greater interest for us all, since payment patterns shape the way banks do business and the way we as consumers adapt.