Choosing how to pay: The influence of foreign backgrounds

Is having a foreign background a relevant factor in choosing between payment instruments in consumer point-of-sale transactions after migration? We analyse this question using a unique diary survey in which both participants with a Dutch or a foreign background documented their daily purchases. We present several pieces of evidence suggesting that foreign backgrounds still influence the choice between payment instruments after migration to the Netherlands. For instance, we find that first-generation migrants from a number of countries that can be seen as cash-oriented are more likely to use cash in the Netherlands. At the same time, second-generation migrants have similar payment habits as individuals with a Dutch background. This finding suggests that payment behaviour is not passed on between generations, but moulded by host country payment habits. Finally, we suggest that, in this context, special information campaigns to increase debit card usage will not have clear net social benefits.