In 2010, the Department of Justice (DOJ) filed a lawsuit against the credit card networks American Express, MasterCard, and Visa for alleged antitrust violations. We evaluate the extent to which the recently proposed settlement between the DOJ and Visa and MasterCard (henceforth, Proposed...

Merchant fees and reward programs generate an implicit monetary transfer to credit card users from non-card (or cash) users because merchants generally do not set differential prices for card users to recoup the costs of fees and rewards. On average, each cash-using household pays $149 to...

This paper summarizes and outlines some interesting issues that arose during a recent workshop on Consumer Behavior and Payment Choice, hosted by the Federal Reserve Bank of Boston's Emerging Payments Research Group (EPRG) on July 25, 2008. Topics addressed are the consumer adoption of new...

The Emerging Payments Research Group (EPRG) at the Federal Reserve Bank of Boston sponsored a new conference, Consumer Behavior and Payment Choice: How and Why Do Consumers Choose Their Payment Methods? on October 27-28, 2005, at the Boston Fed. The conference brought together a diverse set of...

This paper summarizes the proceedings of the second Consumer Behavior and Payment Choice conference, held at the Federal Reserve Bank of Boston on July 2527, 2006. These conferences are unique in featuring the collaboration of two groups of payments experts the private-sector payments industry...

Cash users withdraw money from automated teller machines (ATMs) to finance cash payments. However, most ATMs in the United States dispense only multiples of $20 bills. The paper first constructs a consumer's optimization model showing how the precise denomination of dollar bills available from...

The emergence of cashless stores has led several cities and states to ban such stores. This paper investigates this issue by characterizing consumers who pay cash for in-person purchases and consumers who do not have credit or debit cards. I construct a model of consumer payment choice and use...

Sales tax is generally not included in the advertised price quoted to consumers in the United States. In contrast, value added taxes (VAT) are embedded into the price in most other countries. This article investigates how the two different pricing structures and consumers' decision-making...

The paper investigates the degree to which buyers choose to diversify their use of payment methods for in-person purchases. Some buyers use only one payment instrument. Others combine the use of mostly cash, credit, debit cards, and a few paper checks and prepaid cards. To each survey...

Low-income consumers are not only constrained with spending, but also with the type and variety of payment methods available to them. Using a representative sample of the U.S. adult population, this paper analyzes the low possession (adoption) of credit and debit cards among lowincome consumers...