Explaining the interplay between merchant acceptance and consumer adoption in two-sided markets for payment adoption / by Kim P. Huynh, Gradon Nicholls and Oleksandr Shcherbakov.: FB3-5/2019-32E-PDF
"The market for payment cards is inherently two sided. Consumers benefit from increased merchant acceptance of payment cards and vice versa. To quantify the interdependence of consumer and merchants or network externalities, we construct and estimate a structural two-sided model of a payment choice. We exploit a unique dataset consisting of the Bank of Canada's consumer methods-of-payment survey diaries and the Retailer Survey on the Cost of Payment Methods. We find that consumer adoption of payment cards is inelastic. When merchants face an increase in the usage cost of credit cards, they reduce their acceptance of credit cards in favor of debit cards, and there is a small increase in the share of cash-only businesses"--Abstract.
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| Department/Agency | Bank of Canada. |
|---|---|
| Title | Explaining the interplay between merchant acceptance and consumer adoption in two-sided markets for payment adoption / by Kim P. Huynh, Gradon Nicholls and Oleksandr Shcherbakov. |
| Series title | Bank of Canada staff working paper, 1701-9397 ; 2019-32 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | "August 2019." Includes bibliographical references (pages 30-31). |
| Publishing information | Ottawa : Bank of Canada, 2019. ©2019 |
| Author / Contributor | Huynh, Kim P., 1974- author. Nicholls, Gradon, author. Shcherbakov, Oleksandr, author. |
| Description | 1 online resource (ii, 32 pages) : figures. |
| Catalogue number |
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| Subject terms | Financial services Currency Banking |
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