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Cash or Card? – An Explorative Analysis of Consumers’ Payment Behaviour in Hungary

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  • Végső, Tamás
  • Belházyné Illés, Ágnes
  • Bódi-Schubert, Anikó

Abstract

The main purpose of this study is to explore the payment patterns and cash usage behaviour of the Hungarian public and examine the effects of age, income, education and other socio-demographic factors on these habits. In this regard, we focus especially on the public’s general attitude towards cash and their subjective payment preferences. Our research is primarily based on data acquired from a questionnaire-based survey of 1,500 people, and we compare the lessons learned from it with international examples. We find that the Hungarian population is clearly pro-cash, and this is especially true for those with lower income and lower educational attainment, the economically inactive and the youngest and eldest age groups. A significant proportion uses cash only out of necessity due to the deficiencies of the payment infrastructure, but they are outnumbered by those who would not want to give up banknotes and coins in the future, for a variety of, typically, subjective reasons. The reasons include, for example, the quickness of cash payment and better control over spending, but habits also play a significant role in payment choices.

Suggested Citation

  • Végső, Tamás & Belházyné Illés, Ágnes & Bódi-Schubert, Anikó, 2018. "Cash or Card? – An Explorative Analysis of Consumers’ Payment Behaviour in Hungary," Public Finance Quarterly, Corvinus University of Budapest, vol. 63(4), pages 448-472.
    • Handle: RePEc:pfq:journl:v:63:y:2018:i:4:p:448-472
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    References listed on IDEAS

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    1. John Bagnall & David Bounie & Kim P. Huynh & Anneke Kosse & Tobias Schmidt & Scott Schuh, 2016. "Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data," International Journal of Central Banking, International Journal of Central Banking, vol. 12(4), pages 1-61, December.
    2. Kenneth S. Rogoff, 2016. "The Curse of Cash," Economics Books, Princeton University Press, edition 1, number 10798.
    3. Alvarez, Fernando & Lippi, Francesco, 2017. "Cash burns: An inventory model with a cash-credit choice," Journal of Monetary Economics, Elsevier, vol. 90(C), pages 99-112.
    4. Runnemark, Emma & Hedman, Jonas & Xiao, Xiao, 2014. "Do Consumers Pay More Using Debit Cards than Cash? An Experiment," Working Papers 2014:21, Lund University, Department of Economics.
    5. John Bagnall & David Bounie & Kim P. Huynh & Anneke Kosse & Tobias Schmidt & Scott Schuh, 2016. "Consumer Cash Usage: A Cross-Country Comparison with Payment Diary Survey Data," International Journal of Central Banking, International Journal of Central Banking, vol. 12(4), pages 1-61, December.
    6. Esselink, Henk & Gijsel, Lola Hernandez-van, 2017. "The use of cash by households in the euro area," Occasional Paper Series 201, European Central Bank.
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    More about this item

    Keywords

    cash circulation; consumer payment behaviour; cash usage; electronic payments;
    All these keywords.

    JEL classification:

    • 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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