Anneke Kosse

Do newspaper articles on card fraud affect debit card usage

This paper investigates the impact of newspaper articles about skimming fraud on debit card usage in the Netherlands, using daily transaction data and daily newspaper announcements from January 1st 2005 to December 31st 2008. Key finding is that articles about skimming fraud significantly affect same day debit card usage. The direction and strength of the media effects strongly depend on the specific characteristics of the publications, such as type of fraud addressed and their position in the newspaper, but above all by the frequency with which they come out. The effects, however, are economically small compared to other factors, such as calendar and holiday effects, and do not sustain or accumulate in the long run. Yet, some first cost calculations demonstrate that the impact of media attention on total retail payments efficiency is not to be underestimated.

Migrants' Choice of Remittance Channel: Do General Payment Habits Play a Role?

This paper investigates the determinants in migrants’ choice of payment channel when transferring money to relatives abroad. We analyze survey results on 501 migrants in the Netherlands, identifying five remittance channels: bank, money transfer operator, in-cash transfers via informal intermediaries, ATM withdrawals abroad, and carrying cash abroad. The results show that education, costs, access, and financial development in the recipient country are important determinants, while general cash preferences and internet banking usage play a limited role. Based on our findings, financial education, cost reduction, and increasing financial inclusion may serve a valuable role to increase the use of formal channels.

Choosing How to Pay: The Influence of Home Country Habits

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 behaviour is not passed on from generation to generation, but moulded by host country payment habits. Finally, we suggest that special information campaigns to increase debit card usage will not have clear net social benefits.

Cash versus Debit Card: The Role of Budget Control: Cash Versus Debit Card: The Role of Budget Control

Due to the financial crisis, an increasing number of households faces financial problems. This may lead to an increasing need for monitoring spending and budgets. We demonstrate that both cash and the debit card are perceived to be helpful in this respect. We show that on average consumers who are responsible for the financial decision making within a household consider the debit card to be more useful for monitoring the total value and nature of their expenses than cash. There are however important differences across individuals. In particular, low income people and the liquidity-constrained attach the greatest value to cash as a monitoring and budgeting tool. Finally, we present evidence that these preferences strongly affect consumers’ payment behaviour at an aggregated level. We herewith suggest that the substitution of cash by cards may slow down because of the financial crisis. Also, we show that cash still brings benefits that current electronic counterparts have not yet succeeded to provide. This suggests that consumers may be encouraged to use electronic payment instruments more frequently by incorporating enhanced budgeting and monitoring features.

Cash versus Debit Card: The Role of Budget Control

Due to the financial crisis, an increasing number of households face financial problems. This may lead to an increasing need for monitoring spending and budgets. We demonstrate that both cash and the debit card are perceived as helpful in this respect. We show that, on average, consumers responsible for the financial decision making within a household find the debit card more useful for monitoring their household finances than cash. Individuals differ in major respects, however. In particular, low earners and the liquidity-constrained prefer cash as a monitoring and budgeting tool. Finally, we present evidence that at an aggregated level, such preferences strongly affect consumer payment behaviour. We suggest that the substitution of cash by cards may slow down because of the financial crisis. Also, we show that cash still brings benefits that electronic alternatives have been unable to match. This suggests that inclusion of enhanced budgeting and monitoring features in electronic payment instruments may encourage consumers to use them more frequently.