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How to become a cashless economy and what are the determinants of eliminating cash

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  • Josep Maria Raya
  • Claudia Vargas

Abstract

This paper aims to ascertain the determinants by which individuals decide to use credit cards as a payment method rather than cash; that is, to understand changes in socioeconomic factors on the long-term use of alternatives to cash. Using the data from the waves (2002–2017) of the Spanish Survey of Household Finances (SSHF) and a panel data estimation (static and dynamic), we identify education, age, income and wealth as the main drivers of credit cards as a payment method. We disentangle the effect of age and the cohort effect. We check for nonlinearity problems and card use persistence. A secondary aim is to establish, using a controlled experiment, some of the financial consequences of being a cashless economy.

Suggested Citation

  • Josep Maria Raya & Claudia Vargas, 2022. "How to become a cashless economy and what are the determinants of eliminating cash," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 543-562, December.
    • Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:543-562
    DOI: 10.1080/15140326.2022.2052000
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    1. Daniel Mider & Przemyslaw Potocki & Robert Staniszewski, 2023. "Cryptocurrencies and Other Forms of Payment in the Awareness of Poles: Declared Trust, Perceived Risk and Actual Victimization," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 480-491.
    2. Carbó-Valverde, Santiago & Cuadros-Solas, Pedro J. & Rodríguez-Fernández, Francisco & Sánchez-Béjar, José Juan, 2023. "Mobility restrictions and payment choices: The case of the Covid-19 pandemic," Journal of Behavioral and Experimental Finance, Elsevier, vol. 40(C).

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