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Identity Theft and Consumer Payment Choice: Does Security Really Matter?

Kahn, Charles M and Liñares-Zegarra, José (2016) 'Identity Theft and Consumer Payment Choice: Does Security Really Matter?' Journal of Financial Services Research, 50 (1). 121 - 159. ISSN 0920-8550

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Abstract

Security is a critical aspect of electronic payment systems. In recent years, the phenomenon of identity theft has gained widespread media coverage and has grown to be a major concern for payment providers and consumers alike. How identity theft has affected consumer’s payment choice is still an open research question. We use the 2009 Survey of Consumer Payment Choice (SCPC) to study the effect of identity theft incidents on adoption and usage patterns for nine different payment instruments in the U.S. Our results suggest that certain types of identity theft incidents affect positively the probability of adopting money orders, credit cards, stored value cards, bank account number payments and online banking bill payments. As for payment usage, we find that particular types of identity theft incidents have a positive and statistically significant effect on the use of cash, money orders and credit cards and a negative and statistically significant effect on the use of checks and online banking bill payments. These results are robust across different types of transaction, after controlling for various socio-demographic characteristics and perceptions toward payment methods.

Item Type: Article
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Jose Linares Zegarra
Date Deposited: 08 Sep 2016 13:07
Last Modified: 26 Mar 2019 14:15
URI: http://repository.essex.ac.uk/id/eprint/17481

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