Van Hove, Leo
Consumer and merchant uptake of European e-purses such as the GeldKarte has been disappointing. Survey results for Belgium show that this is not because consumers have a negative perception of purse technology, on the contrary. Consumers do, however, perceive e-purses as costly. Belgian merchants also perceive the cost of accepting e-purses as high compared to cash. This article stresses that these perceived private costs are not in line with the underlying social costs. The article builds on two recent central bank studies to show that increased usage of e-purses (and debit cards) would lower the social cost of our payment systems. It is therefore argued that e-purses should be promoted more forcefully by making their main competitor, cash, more expensive.