The Move Toward a Cashless Society: A Closer Look at Payment Instrument Economics

Daniel D. Garcia-Swartz 1 , Robert W. Hahn 2 ,  and Anne Layne-Farrar 3
  • 1 LECG
  • 2 American Enterprise Institute-Brookings Joint Center for Regulatory Studies,
  • 3 LECG

Ever since the first general-purpose charge card debuted in the early 1950s, pundits have been predicting the "cashless society". Over fifty years later, we may finally be getting close to that vision. This study is the first to examine empirically the move toward a cashless society using a cost-benefit framework. We find that when all key parties to a transaction are considered and benefits are added, cash and checks are more costly than many earlier studies suggest. In general, the shift toward a cashless society appears to be a beneficial one.

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Since 2002, the Review of Network Economics (RNE) has been a leading forum for new insights in network economics, providing essential reading for anyone interested in the economics of network industries. It seeks to help policy makers, academics, and practitioners keep informed of new research and policy debate in network economics and related subjects that are relevant to the study of network industries.