- The effects of payment instruments on charitable giving: Evidence from a field experiment
- Number of pages
- Amsterdam: Faculteit Economie en Bedrijfskunde
- Document type
- Working paper
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
This study reports on a door-to-door field experiment on the effects of introducing portable debit terminals for mobile payment authorization on the contributions to charity. About 4,500 households are approached, randomly divided in three experimental treatments, distinguished by the possibility for respondents to pay with cash, by debit card, or both. The study answers three related questions. First, does the acceptance of the debit instrument increase the number of households that participate in the fund-raise? Second, does, conditional on participation, the average amount given change? Third, does the availability of the debit terminals increase payment efficiency in terms of the number of coins and notes involved in the transaction? I find that adding the option to pay electronically does not increase participation nor the amount raised. Compared with the treatments where cash is accepted, participation rates and gross proceeds are significantly lower in the debit-only treatment, although debit card use increases in the latter treatment relative to the combined treatment where almost none of the respondents uses the terminal. Young people are somewhat more likely to switch to electronic donations. Conditional on contributing, average donations of households that use their debit card are about twice as high as those of donors that pay cash. With regard to payment efficiency, I surprisingly find that the mere presence of the debit terminal induces small cash donors to donate more efficiently.
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