Template-type: ReDIF-Paper 1.0
Author-Name: Martin Brown
Author-Name-First: Martin
Author-Name-Last: Brown
Author-Person: pbr129
Author-Name: Laura Felber
Author-Name-First: Laura
Author-Name-Last: Felber
Author-Person: pfe607
Author-Name: Dr. Christoph Meyer
Author-Name-First: Christoph
Author-Name-Last: Meyer
Author-Person:  pme595
Title: Consumer adoption and use of financial technology: "tap and go" payments
Abstract: Financial intermediaries play an important role in consumer adoption and use of payment technology. Card schemes and card-issuing banks set rules for cashless payments between consumers and merchants. We document that these rules have a strong causal impact on the use of digital payment technology. We study an increase in the value limit for contactless cardholder verification (“tap-and-go” limit) that was introduced at the onset of the COVID-19 pandemic. Our analysis is based on anonymized, transaction-level data for a large sample of point-of-sale (POS) debit card payments between 2019 and 2021. We show that the increase in the “tap-and-go” limit caused a significant increase in the consumer use of contactless payments but only a minor increase in first-time adoption of this payment technology. Our results suggest that policy-makers are advised to consider the role of intermediaries and verification rules when evaluating payment innovations, such as instant payment systems or central bank digital currencies (CBDCs).

Length: 52 pages
Creation-Date: 2023
Contact-Email: forschung@snb.ch
File-URL: https://www.snb.ch/en/publications/research/working-papers/2023/working_paper_2023_08
File-Format: text/html
Number: 2023-08
Classification-JEL: D14, E42, G21, G23, G50, O33
Keywords: Payment choice, Financial intermediation, Technology adoption, Contactless payments, COVID-19
Handle: RePEc:snb:snbwpa:2023-08