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Show me how you pay and I will tell you who you are – Socio-demographic determinants of payment habits

Author

Listed:
  • Tamás Ilyés
  • Lóránt Varga

    (Magyar Nemzeti Bank)

Abstract

This study is intended to assist in understanding the current payment habits of Hungarian households and examine the extent to which these habits are affected by age, education, activity, income or residence. Our research analysed a representative household survey with a sample of 1,000 respondents using various statistical tools. The percentage of households holding bank accounts and bank cards is high and has not changed since 2010, while households’ use of cash has moderately declined in recent years. The socio-demographic variables under review have a limited impact on the use of cash-based payment methods. Accordingly, in terms of both number and value, a similar proportion of households pay their bills via postal cash payments, irrespective of age and income. The preference for the use of electronic payment methods is largely driven by education level. While the use of electronic payment methods generally increases in line with income, cash usage is still strongly over-represented among one fourth of households with higher-thanaverage income levels. Age, activity and residence also exert a significant impact on the adoption of electronic payment methods, but the payment habits of users of different electronic payment instruments do not generally show differences on the basis of these features.

Suggested Citation

  • Tamás Ilyés & Lóránt Varga, 2015. "Show me how you pay and I will tell you who you are – Socio-demographic determinants of payment habits," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 14(2), pages 25-61.
    • Handle: RePEc:mnb:finrev:v:14:y:2015:i:2:p:25-61
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    File URL: http://english.hitelintezetiszemle.hu/letoltes/2-ilyes-varga-en.pdf
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    References listed on IDEAS

    as
    1. Tamás Ilyés & Kristóf Takács & Lóránt Varga, 2014. "Changes in the fees on payment services and the structure of payments following the introduction of the financial transaction tax," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 9(1), pages 40-47, March.
    2. Carin van der Cruijsen & Mirjam Plooij, 2015. "Changing payment patterns at point-of-sale: their drivers," DNB Working Papers 471, Netherlands Central Bank, Research Department.
    3. Łukasz Goczek & Bartosz Witkowski, 2015. "Determinants of non-cash payments," NBP Working Papers 196, Narodowy Bank Polski.
    4. Éva Divéki & Dániel Listár, 2012. "Better safe than sorry: views of the Hungarian public on the security of payment instruments," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 7(3), pages 7-27, October.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. László Kajdi & Milán Kiss, 2022. "The impact of policy effects on the Hungarian payments card market," Journal of Banking Regulation, Palgrave Macmillan, vol. 23(2), pages 107-119, June.
    2. László Kajdi, 2017. "A Western Diet with Chinese Spices – The Specificities of Payments in China," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(Sepcial I), pages 140-169.
    3. Yulia Titova & Delia Cornea & Sébastien Lemeunier, 2021. "What Factors Keep Cash Alive in the European Union?," De Economist, Springer, vol. 169(3), pages 291-317, August.
    4. László Kajdi & István Nemecskó, 2020. "Regional Features of Card Payments in Hungary," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 19(1), pages 65-89.
    5. Ágnes Illés Belházy & Tamás Végsõ & Anikó Bódi-Schubert, 2018. "An Analysis of the Payment Habits of Hungarian Micro, Small and Medium-sized Enterprises – In Focus: Cash Usage," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 17(4), pages 53-94.
    6. Tamás Végsõ, 2020. "Comparative Analysis of the Changes in Cash Demand in Hungary," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 19(1), pages 90-118.

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    More about this item

    Keywords

    retail payments; payment habits; household behaviour; electronic payment methods; financial integration;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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