Skip to main content
SpringerLink
Log in

Could “Nudges” Steer Us towards a Less-Cash Society?

  • Chapter
Transforming Payment Systems in Europe

Abstract

Every now and then academics write a popularising book on economics that effectively becomes wildly popular. Information Rules by Carl Shapiro and Hal Varian comes to mind, and in 2008 there was Nudge — Improving Decisions about Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein, a book described by one website as “the Harry Potter of the policy world this summer”.1 In the book, behavioural economist Thaler and law professor Sunstein, then both at the University of Chicago, argue that seemingly small changes in the choice context — “nudges” — can have massive effects on people’s behaviour. Other books, such as Daniel Kahneman’s (2011) Thinking, Fast and Slow and I’ll Have What She’s Having by Bentley, Earls and O’Brien (2011) have since ridden the wave of interest in behavioural economics.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 109.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 139.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Arango, C., and V. Taylor. 2008. “Merchant Acceptance, Costs, and Perceptions of Retail Payments: A Canadian Survey”, Discussion Paper 2008–12, Bank of Canada <http://www.bankofcanada.ca/2008/08/discussion-paper-2008-12/>. Accessed on November 3, 2015.

    Google Scholar 

  • Ardizzi, G., and P. Giucca. 2012. “The Social Costs of Payment Instruments in Italy. Surveys of Firms, Banks, and Payment Service Providers”, <https://www.bancaditalia.it/pubblicazioni/tematiche-istituzionali/2012-costo-sociale/social_costs_payment_instruments_Italy.pdf>. Accessed on November 3, 2015.

  • Aydogan, S. and L. Van Hove. 2014. “Nudging Consumers towards Card Payments: A Field Experiment”, in The Usage, Costs and Benefits of Cash — Revisited. Conference book of the 2014 International Cash Conference, Deutsche Bundesbank, 589–630.

    Google Scholar 

  • Banco de Portugal. 2007. Retail Payment Instruments in Portugal: Costs and Benefits <https://www.bportugal.pt/SiteCollectionDocuments/DPG-SP-PUB-Instrumentos-Pagamento-Retalho-Est-en.pdf>. Accessed on November 3, 2015.

  • Bank of England (BoE). 2015. “One Bank Research Agenda”, Discussion Paper <http://www.bankofengland.co.uk/research/documents/onebank/discussion.pdf>. Accessed on November 3, 2015.

  • Bentley, A., Earls M. and M. J. O’Brien. 2011. I’ll Have What She’s Having — Mapping Social Behavior, Cambridge: MA: MIT Press.

    Google Scholar 

  • Bergman, M., G. Guibourg, and B. Segendorf. 2007. “The Costs of Paying — Private and Social Costs of Cash and Card Payments”, Working Paper No. 212, Sveriges Riksbank.

    Google Scholar 

  • Bergman, M., G. Guibourg, and B. Segendorf. 2008. “Card and Cash Payments from a Social Perspective”, Economic Review, Sveriges Riksbank, 2, 42–59.

    Google Scholar 

  • Bolt, W., N. Jonker, and C. van Renselaar. 2008. “Incentives at the Counter: An Empirical Analysis of Surcharging Card Payment and Payment Behaviour in the Netherlands”, Working Paper No. 196, De Nederlandsche Bank.

    Google Scholar 

  • Bouhdaoui Y., Bounie, D., and L. Van Hove. 2011. “Central Banks and Their Banknote Series: The Efficiency-Cost Trade-off”, Economic Modelling, 28, 1482–1488.

    Article  Google Scholar 

  • Bounie, D., M. Bourreau, A. François, and M. Verdier, “La Détention et l’Usage des Instruments de Paiement en France”, Revue d’Economie Financière, 91, 2008, 53–76.

    Article  Google Scholar 

  • Bounie, D., J.-P. Buthion, and F. Abel. 2010. “Une analyse des facteurs de l’acceptation et de l’usage des instruments de paiement par les commerces en France”, Revue d’Economie Financière, 96, 187–213.

    Article  Google Scholar 

  • Buonomano, D. 2011. Brain Bugs: How the Brain’s Flaws Shape Our Lives, New York: Norton.

    Google Scholar 

  • Congressional Budget Office (CBO). 1996. “Emerging Electronic Methods for Making Retail Payments” <http://www.cbo.gov/doc.cfm?index=14>. Accessed on November 3, 2015.

  • Committee on Payment and Settlement Systems (CPSS). 2003a. “A Glossary of Terms Used in Payments and Settlement Systems” <http://www.bis.org/publ/cpss00b.htm>. Accessed on November 3, 2015.

  • Committee on Payment and Settlement Systems (CPSS). 2003b. “The Role of Central Bank Money in Payment Systems”, CPSS Publications 55 <http://www.bis.org/publ/cpss55.pdf>. Accessed on November 3, 2015.

  • De Nederlandsche Bank (DNB). 2004. “The Cost of Payments”, Quarterly Bulletin, March, 57–64.

    Google Scholar 

  • De Nederlandsche Bank (DNB). 2006. “Towards a Cashless Society?”, Quarterly Bulletin, March, 63–70.

    Google Scholar 

  • De Nederlandsche Bank (DNB). 2015. “Card or Cash? Customer Preferences Dictate Retailers’ Approach”, DNBulletin, 30 April <http://www.dnb.nl/en/news/news-and-archive/dnbulletin-2015/dnb321621.jsp>. Accessed on November 3, 2015.

  • De Ploey, W., T. Natale, and A. Proko. 2008. “Mission Impossible? The Cashless Payments Proposition for ‘Small-Ticket’ Merchants”, McKinsey on Payments, February, 38–43.

    Google Scholar 

  • EMEAP Working Group on Payment and Settlement Systems. 2002. “Payment Systems in EMEAP Economies”, Executives’ Meeting of East Asia-Pacific Central Banks and Monetary Authorities <http://www.emeap.org/wp-content/uploads/2015/04/redbook.pdf>. Accessed on November 3, 2015.

    Google Scholar 

  • Enge, A., and G. Øwre. 2006. “A Retrospective on the Introduction of Prices in the Norwegian Payment System”, Economic Bulletin, Norges Bank, 77, 162–172.

    Google Scholar 

  • Garcia-Swartz, D.D., R.W. Hahn, and A. Layne-Farrar. 2004. “The Economics of a Cashless Society: An Analysis of the Costs and Benefits of Payment Instruments”, Related Publication 04-24, AEI-Brookings Joint Center for Regulatory Studies.

    Google Scholar 

  • Garcia-Swartz, D.D., R.W. Hahn, and A. Layne-Farrar. 2006a. “The Move toward a Cashless Society: A Closer Look at Payment Instrument Economics”, Review of Network Economics, 5, 175–198.

    Google Scholar 

  • Garcia-Swartz, D.D., R.W. Hahn, and A. Layne-Farrar. 2006b. “The Move toward a Cashless Society: A Closer Look at Payment Instrument Economics of a Cashless Society: Calculating the Costs and Benefits”, Review of Network Economics, 5, 199–228.

    Google Scholar 

  • Garcia-Swartz, D.D., R.W. Hahn, and A. Layne-Farrar. 2007. “Further Thoughts on the Cashless Society: A Reply to Dr. Shampine”, Review of Network Economics, 6, 509–524.

    Article  Google Scholar 

  • Goldstein, D.G., E.J. Johnson, A. Herrmann, and M. Heitmann. 2008. “Nudge Your Customer toward Better Choices”, Harvard Business Review, December, 99–105.

    Google Scholar 

  • Górka, J. 2014. “Merchant Indifference Test Application — A Case For Revising Interchange Fee Level in Poland”, in The Usage, Costs and Benefits of Cash — Revisited. Conference book of the 2014 International Cash Conference, Deutsche Bundesbank, 75–151.

    Google Scholar 

  • Gresvik, O., and H. Haare. 2008a. “Payment Habits at Point of Sale. Different Methods of Calculating Use of Cards and Cash in Norway”, Staff Memo 6/2008, Norges Bank <http://www.norges-bank.no/upload/publikasjoner/staff%20memo/2008/staff_memo_2008_06.pdf>. Accessed on November 3, 2015.

    Google Scholar 

  • Gresvik, O., and H. Haare. 2008b. “Costs in the Norwegian Payment System 2007 — A Brief Overview of the Surveys and Results”, Staff Memo 9/2008, Norges Bank <http://www.norges-bank.no/upload/publikasjoner/staff%20memo/2008/staff_memo_0908.pdf>. Accessed on November 3, 2015.

    Google Scholar 

  • Gresvik, O., and H. Haare. 2009. “Costs in the Norwegian Payment System”, Staff Memo No. 4/2009, Norges Bank, <http://www.norges-bank.no/upload/publi-kasjoner/staff%20memo/2009/staff_memo_0409.pdf>. Accessed on November 3, 2015.

    Google Scholar 

  • Hakkarainen, P. 2009. “The Future of Retail Banking: More Competition Needed, Settlements, Payments, E-money & E-trading Development (SPEED), 4, 34–39.

    Google Scholar 

  • Jonker, N. 2013. “Social Costs of POS Payments in the Netherlands 2002–2012: Efficiency Gains from Increased Debit Card Usage”, Occasional Studies, 11(2), De Nederlandsche Bank.

    Google Scholar 

  • Jonker, N., M. Plooij, and J. Verburg. 2015. “Does a Public Campaign Influence Debit Card Usage? Evidence from the Netherlands”, Working Paper No. 470, De Nederlandsche Bank.

    Google Scholar 

  • Jacobsen, J.G.K., and A.M. Pedersen. 2012. “Costs of Cash and Card Payments in Denmark”, Monetary Review, Danmarks Nationalbank, 2nd Quarter, 109–121.

    Google Scholar 

  • Kahneman, D. 2011. Thinking, Fast and Slow, New York: Farrar, Straus & Giroux.

    Google Scholar 

  • Krueger, M. 2008. “Cash — The Familiar Stranger”, European Card Review, 15(5), September/October, 30–34.

    Google Scholar 

  • Krueger, M., and F. Seitz. 2014. Costs and Benefits of Cash and Cashless Payment Instruments — Module 1: Overview and Initial Estimates, Frankfurt am Main, Germany: Deutsche Bundesbank.

    Google Scholar 

  • Lam, T., and C. Ossolinski. 2015. “The Value of Payment Instruments: Estimating Willingness to Pay and Consumer Surplus”, Research Discussion Paper 2015–03, Reserve Bank of Australia.

    Google Scholar 

  • Latvijas Banka. 2013. The Bank of Latvia Review of Social Costs of Retail Payment Instruments in Latvia.

    Google Scholar 

  • Leenheer, J., M. Elsen, and R. Pieters. 2012. “Consumentenprikkels voor Efficiënt Betalen — Management Summary”, CentERdata, Tilburg.

    Google Scholar 

  • Leinonen, H. 2008. “Could Transparent Pricing Increase Payment Efficiency and Competition at Point of Sale?”, mimeo, Bank of Finland, 3 November.

    Google Scholar 

  • Liikanen, E. 2015. “Enhancing Reliability and Efficiency of Future Payments: Five Criteria”, speech at the joint European Central Bank and Bank of Finland Retail Payment Conference, Helsinki, 4 June.

    Google Scholar 

  • Maatschappelijk Overleg Betalingsverkeer (MOB). 2007. “Rapportage Maatschappelijk Overleg Betalingsverkeer 2006”, report to the Minister of Finance <http://www.dnb.nl/binaries/Rapportage%20MOB%202006%20-%20april%202007_tcm46-153444.pdf>. Accessed on November 3, 2015.

  • National Bank of Belgium. 2006. “Costs, Advantages and Drawbacks of the Various Means of Payment”, Economic Review, National Bank of Belgium, 41–47.

    Google Scholar 

  • National Bank of Belgium. 2015. Annual report.

    Google Scholar 

  • Reserve Bank of Australia. 2007. “Payment Costs in Australia” <http://www.rba.gov.au/payments-system/resources/publications/payments-au/paymts-sys-revconf/2007/7-payment-costs.pdf>. Accessed on November 3, 2015.

  • Rogoff, K. S. 2014. “Costs and Benefits to Phasing out Paper Currency”, Working Paper 2016, National Bureau of Economic Research.

    Book  Google Scholar 

  • Schautzer, A. 2007. “Cash Logistics in Austria and the Euro Area”, Monetary Policy & the Economy, Oesterreichische Nationalbank, No. 1, 138–149.

    Google Scholar 

  • Schlag, P. 2010. “Nudge, Choice Architecture, and Libertarian Paternalism”, Michigan Law Review, 108, 913–924.

    Google Scholar 

  • Schmiedel, H., G. Kostova, and W. Ruttenberg. 2012. “The Social and Private Costs of Retail Payment Instruments: A European Perspective”, Occasional Paper Series No. 137, European Central Bank.

    Google Scholar 

  • Segendorf, B. and T. Jansson. 2012. The Cost of Consumer Payments in Sweden. Working Paper 262, Sveriges Riksbank.

    Google Scholar 

  • Shampine, A. 2007. “Another Look at Payment Instrument Economics”, Review of Network Economics, 6, 495–508.

    Article  Google Scholar 

  • Simes, R., A. Lancy, and I. Harper. 2006. “Costs and Benefits of Alternative Payments Instruments in Australia”, Working Paper 2006–08, Melbourne Business School.

    Google Scholar 

  • Snellman, H., and M. Virén. 2009. “ATM Networks and Cash Usage”, Applied Financial Economics, 19, 841–851.

    Article  Google Scholar 

  • Steering Committee over de toekomst van de betaalmiddelen. 2005. “Kosten, Vooren Nadelen van de Verschillende Betaalmiddelen”, National Bank of Belgium.

    Google Scholar 

  • Stewart, C., I. Chan, C. Ossolinski, D. Halperin, and P. Ryan. 2014. “The Evolution of Payment Costs in Australia”, Research Discussion Paper 2014–14, Reserve Bank of Australia.

    Google Scholar 

  • Spencer, P. D. 2003. “Market Structure, Innovation and the Development of Digital Money”, in Balling, M., F. Lierman, and A. Mullineux (eds), Technology and Finance: Challenges for Financial Markets, Business Strategies and Policy Makers, Routledge, London, 302–313.

    Google Scholar 

  • Takala, K., and M. Virén. 2007. “Impact of ATMs on the Use of Cash”, Communications & Strategies — International Journal of Digital Economics, 66, 47–62.

    Google Scholar 

  • Takala, K., and M. Virén. 2008. “Efficiency and Costs of Payments”, Discussion Paper No. 11/2008, Bank of Finland.

    Google Scholar 

  • Thaler, R., and C. Sunstein. 2008. Nudge — Improving Decisions about Health, Wealth, and Happiness, New Haven & London: Yale University Press.

    Google Scholar 

  • van der Cruijsen, C., L. Hernandez, and N. Jonker. 2015. “In Love with the Debit Card but Still Married to Cash”, Working Paper No. 461, De Nederlandsche Bank.

    Google Scholar 

  • Van der Horst, F., and E. Matthijsen. 2013. “The Irrationality of Payment Behaviour”, Occasional Studies, 11(4), De Nederlandsche Bank.

    Google Scholar 

  • Van Hove, L. 2001. “Optimal Denominations for Coins and Bank Notes: In Defense of the Principle of Least Effort”, Journal of Money, Credit, and Banking, 33, 1015–1021.

    Article  Google Scholar 

  • Van Hove, L. 2002. “Electronic Money and Cost-based Pricing”, Wirtschaftspolitische Blätter, 49, 128–136.

    Google Scholar 

  • Van Hove, L. 2004. “Cost-Based Pricing of Payment Instruments: The State of the Debate”, De Economist, 152,1, 79–100.

    Article  Google Scholar 

  • Van Hove, L. 2005. “Making Electronic Money Legal Tender: Pros & Cons”, Working paper, Free University of Brussels, October.

    Google Scholar 

  • Van Hove, L. 2007. “Central Banks and Payment Instruments: A Serious Case of Schizophrenia”, Communications & Strategies — International Journal of Digital Economics, 66, 19–46.

    Google Scholar 

  • Van Hove, L. 2008. “On the War On Cash and Its Spoils”. International Journal of Electronic Banking, 1, 36–45.

    Article  Google Scholar 

  • Van Hove, L., and J. Vuchelen. 1996. “Who Needs High-Denomination Euro Banknotes? A Note on the Proposed Denominational Structure of the Euro”, Rivista Internazionale di Scienze Economiche e Commerciali, 43,4, 791–803.

    Google Scholar 

Download references

Authors
  1. Leo Van Hove
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. University of Warsaw, Poland

    Jakub Górka

Copyright information

© 2016 Leo Van Hove

About this chapter

Cite this chapter

Van Hove, L. (2016). Could “Nudges” Steer Us towards a Less-Cash Society?. In: Górka, J. (eds) Transforming Payment Systems in Europe. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9781137541215_3

Download citation

Publish with us

Policies and ethics

Search

Navigation