Understanding Preferences for Payment Cards using Household Scanner Data

October 2025

Understanding Preferences for Payment Cards using Household Scanner Data

Marc Rysman, Shuang Wang, and Krzysztof Wozniak

Abstract:

We use consumer panel scanner data to examine households' payment choices, a new application of such data. In particular, we study the long-term shift towards payment cards, as well as the role of transaction size in determining choices. We find that idiosyncratic household preferences are a key driver of payment choice. Our estimates suggest that transaction size, while important, may have a smaller effect on payment choice than previously thought, and that the effect varies substantially across households. Our results further suggest that idiosyncratic household preferences evolve slowly over time, explaining only a third of the increase in card use over the seven-year period in our data. Taken together, our findings have potential policy implications not just for the adoption of new methods such as instant payments, but also around potential costs to households from sun-setting older payment methods such as checks.

Keywords: Credit Cards, Heterogeneity, Households, Panel Data, Payment Choice

DOI: https://doi.org/10.17016/FEDS.2025.096

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