Could 'Nudges' Steer Us Towards a 'Less-Cash Society'?

A growing body of central bank studies show that cash payments are costly for society and that electronic payment instruments are more efficient. This paper tries to find out whether Thaler and Sunstein's libertarian paternalism - as promoted in their 2008 book Nudge - can offer novel ways to discourage the use of cash. Libertarian paternalism, or 'nudging', relies on insights from behavioural economics to assert that subtle changes to the choice context can change people's behaviour and steer them in the 'right' direction. The paper finds that the payments sector is not new to nudging, and comes up with a number of possible actions that seem to hold promise