Keywords: Payment systems, consumer choice, technology adoption, multihoming
Abstract: In the U.S., the share of payments made "electronically"--with credit cards, debit cards, and
direct payments--grew from 25 percent in 1995 to over 50 percent in 2002 (BIS, 2004). This
paper frames this aggregate change in the context of individual behavior. Family level data
indicate that the share of families using or holding these instruments also increased over the
same period. The personal characteristics that predict use and holdings are relatively constant
over time. Furthermore, the results indicate that the aggregate change may be correlated with a
greater incidence in "multihoming", or use of multiple payment instruments. In addition, the paper
offers evidence that the dimensions over which families multihome differ across payment instruments.
The results presented in this paper document a significant change in the payment system, inform
payment system policies, and provide evidence of technology adoption behavior more generally.
Full paper (342 KB PDF) | Full Paper (Screen Reader Version)
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Last update: February 10, 2006