The economics of bill payments: An empirical analysis

The growing economic literature dedicated to payment instruments mainly focuses on the point of sale payments. Yet, credit transfers and direct debits used in bill payments are much more used in the euro area than cheques, payment cards and other payment instruments. The main objective of this article is, therefore, to verify whether the theoretical standard framework stated for studying the choice of payment instruments at the point of sale is relevant to study bill payments. Using an original data set, we show that the main predictions of the standard model do not hold.