How and Why Do Consumers Choose Their Payment Methods?

By Stacey L. Schreft
April 2006
RWP 06-04
Research Division
Federal Reserve Bank of Kansas City


Abstract

This essay provides an overview of the literature on consumer payment behavior. It considers the state of our understanding of how and why consumers choose their payment methods and what is needed to make more headway in understanding consumer payment decisions. It closes by discussing the policy issues that require that we make progress with payments research.

Keywords: payments, means of payment, consumer choice behavior

JEL classification: D11, D12, D14, E41


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