The Cost of Consumer Payments in Sweden

Riksbank Research Paper Series No. 93

Sveriges Riksbank Working Paper Series No. 262

51 Pages Posted: 27 Jun 2012

See all articles by Bjorn L. Segendorf

Bjorn L. Segendorf

Sveriges Riksbank

Thomas Jansson

Sveriges Riksbank - Research Division

Date Written: June 1, 2012

Abstract

We estimate the social and private costs of consumer-to-business payments in Sweden in 2009. The combined social cost for these payments was 0.68 per cent of GDP. At the point of sale, cash is socially less costly than debit cards for payments below EUR 1.88 (SEK 20) and credit cards below EUR 42.37 (SEK 450). The corresponding thresholds for the individual consumer are higher for debit cards and much lower for credit cards. Using unique survey data we show that consumers’ payment behaviour is not consistent with what is socially optimal.

Keywords: Cash payments, Card payments, Credit transfers, Direct debits, Social costs, Private costs

JEL Classification: D12, D23, D24

Suggested Citation

Segendorf, Bjorn L. and Jansson, Thomas, The Cost of Consumer Payments in Sweden (June 1, 2012). Riksbank Research Paper Series No. 93, Sveriges Riksbank Working Paper Series No. 262, Available at SSRN: https://ssrn.com/abstract=2092577 or http://dx.doi.org/10.2139/ssrn.2092577

Bjorn L. Segendorf (Contact Author)

Sveriges Riksbank ( email )

Brunkebergstorg 11
SE-103 37 Stockholm
Sweden
+46 8 787 0471 (Phone)
+46 8 21 05 31 (Fax)

Thomas Jansson

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden

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