Show me the money! Experimental evidence on preferences for cash vs. digital payment
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International Food Policy Research Institute
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In places such as rural Bangladesh, cash is the dominant medium for payments despite potential benefits of digital payments. We offer survey respondents an incentive-compatible choice for compensation: 200 Taka cash or randomly varied mobile money amounts (200-400 Taka). Only eight percent chose digital payment at parity and respondents exhibit an average willingness-to-pay of 43 percent of the payment value to receive cash payment. This preference persists across demographics, including among mobile money account holders. Within-household analysis reveals that 77 percent of the effect stems from individual-level rather than household-level factors, highlighting the importance of demand-side barriers on digital payments.
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rural areas, payment agreements, consumer behaviour, smartphones, digital technology, willingness to pay