00000nam 2200000zi 4500 9.896273 CaOODSP 20221107174255 m o d f cr cn||||||||| 210208t20212021oncad ob f000 0 eng d CaOODSP eng rda CaOODSP n-cn--- n-us--- FB3-5/2021-8E-PDF Felt, Marie-Hélène, author. Distributional effects of payment card pricing and merchant cost pass-through in Canada and the United States / by Marie-Hélène Felt, Fumiko Hayashi, Joanna Stavins and Angelika Welte. Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2021. ©2021 1 online resource (ii, 65 pages) : illustrations, colour graphs. text txt rdacontent computer c rdamedia online resource cr rdacarrier Staff working paper = Document de travail du personnel, 1701-9397 ; 2021-8 "February 5, 2021." Cover title. Includes bibliographical references (pages 34-37). "Using data from Canada and the United States, we quantify consumers’ net pecuniary cost of using cash, credit cards, and debit cards for purchases across income cohorts. The net cost includes fees paid to financial institutions, rewards received from credit or debit card issuers, and the merchant cost of accepting payments that is passed on to consumers as higher retail prices. Even though credit cards are more expensive for merchants to accept compared with other payment methods, merchants typically do not differentiate prices at checkout, but instead pass through their costs to all consumers. As a result, credit card transactions are cross-subsidized by cheaper debit and cash payments. Card rewards and consumer fees paid to financial institutions are additional sources of cross-subsidies. We find that consumers in the lowest-income cohort pay the highest net pecuniary cost as a percentage of transaction value, while consumers in the highest-income cohort pay the lowest. This result is robust under various scenarios and assumptions, suggesting payment card pricing and merchant cost pass-through have regressive distributional effects in Canada and the United States"--Abstract, page ii. Merchants Fees Canada. Merchants Fees United States. Credit card fees Canada. Credit card fees United States. Commerçants Honoraires Canada. Commerçants Honoraires États-Unis. Cartes de crédit Frais Canada. Cartes de crédit Frais États-Unis. Bank of Canada, issuing body. Staff working paper (Bank of Canada) 1701-9397 ; 2021-8. (CaOODSP)9.806221 PDF 972 KB https://publications.gc.ca/collections/collection_2021/banque-bank-canada/FB3-5-2021-8-eng.pdf