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The Effects of E-payment Instruments on Cash Usage: Thailand’s

By Rungsun Hataiseree and Wachirawat BanchuenRungsun Hataiseree and Wachirawat Banchuen

Abstract

The effects of e-payment instruments on cash use are examined for Thailand. The examination is undertaken using quarterly data from 2005-2010. The results shows that some forms of e-payment instruments like debit cards, have negatively affected currency in circulation, while GDP and interest rates are found to exert significant influence on currency demand as expected from the theory. The estimated coefficient of cash-card substitution of 0.15 suggests that a 10 % increase in debit cards transactions would result in the reduction of demand for cash transactions of around 1.5%. However, given the low degree of debit card usage for making payments and the slow change in the payment behavior, it is unlikely that this development will have noticeable impact on the future use of cash and the implementation of monetary policy. This suggests that payments by cash continue to be strong at around 8-10 % of GDP for foreseeable future. Nevertheless, given the relatively high cost of currency provision and usage, our findings of certain degree of cash-card substitution can provide positive influence on the future reduction of the country’s resource costs i

Topics: Recent Evidence and Policy Implications
Year: 2010
OAI identifier: oai:CiteSeerX.psu:10.1.1.189.4666
Provided by: CiteSeerX
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