Convergence of European retail payments.

We estimate convergence in the European retail payments market during the period 1995–2011 for the most popular retail payment instruments: cash, debit card, credit card, direct debit, credit transfer, cheque and e-money. To estimate convergence, we employ the concepts of beta and sigma convergence. There is some evidence of convergence for all payment instruments, except for cheques and e-money. The results suggest that the cross-country dispersion of the use of payment instruments has declined over time in Europe, and the pace of convergence has picked up since the introduction of the single currency. We also find evidence for beta convergence for card payments, direct debits and credit transfers. The results indicate that convergence in European retail payments has progressed despite the financial crisis.