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The Impact of Contactless Payment on Spending

Author

Listed:
  • Tobias Truetsch

    (University of St.Gallen)

Abstract

This paper estimates the effect of contactless payment on the spending ratio in terms of transactions for different transaction types at the point-of-sale. The specifc devices that are investigated are debit and credit cards, to which the feature is embedded. Data is drawn from a national representative survey on consumer payment behavior in the US in 2010. Using propensity score matching to control for selection, the estimation shows that the contactless feature yields to a signifcant increase in the spending ratio at the point-of-sale for both payment methods. The average treatment effect on the treated for credit and debit cards is roughly 8 and 10 percent, respectively. These fndings indicate that the private industry can highly benefit from the innovation with respect to new revenue streams. This paper contributes to the existing literature in payment economics by analyzing one of the most recent payment products.

Suggested Citation

  • Tobias Truetsch, 2014. "The Impact of Contactless Payment on Spending," Proceedings of International Academic Conferences 0702228, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:0702228
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    References listed on IDEAS

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    More about this item

    Keywords

    contactless payment; payment innovation; spending habits; credit and debit cards; near-feld communication (NFC); propensity score matching;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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