Our website will undergo scheduled maintenance on March 6th, 2024. During this time, connection to our website and some of its features may be unavailable. Thank you for your patience, and we apologize for any inconvenience.

Working Paper

Cashless Stores and Cash Users


Abstract: The emergence of cashless stores has led several cities and states to ban such stores. This article investigates this issue by characterizing consumers who pay cash for in-person purchases and consumers who do not have credit or debit cards. Using a random utility model, I estimate 1.3 to 30.9 percentage drop in average per-payment consumer surplus if all stores were to become cashless and when utility is measured by the cost of making a payment, security, and convenience. The conclusion provides a discussion of alternatives to cash for in-person purchases that may be needed before all brick-and-mortar stores become cashless.

Keywords: cashless stores; banning cashless stores; consumer payment choice; in-person purchases; alternatives to cash; random utility;

JEL Classification: D9; E42;

https://doi.org/10.29338/wp2019-11a

Access Documents

Authors

Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: FRB Atlanta Working Paper

Publication Date: 2019-08-01

Number: 2019-11

Pages: 26 pages