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The impact of mobile payment on payment choice
Journal
Financial Markets and Portfolio Management
ISSN
1934-4554
Type
journal article
Date Issued
2016-07-19
Author(s)
Abstract
This paper investigates the effect of mobile payment on the adoption and use of traditional payment instruments such as cash, checks, and credit, debit and prepaid cards at the point of sale (POS). Data are from a 2012 representative survey on consumer payment choice in the United States. Using discrete-choice random utility models to simulate consumer behavior, the estimation provides two major findings. First, mobile payment does not replace physical payment cards, but is likely to substitute for paper-based payment methods such as cash and checks at the adoption stage. Second, mobile payment does not statistically significantly influence the choice of payment means at the POS in terms of usage. However, there is suggestive evidence that it is complementary to card payments and a substitute for paper-based payment instruments. The findings highlight the potential social welfare gains of mobile payment and provide key insights into challenging issues for the private industry sector.
This paper furthermore offers novel evidence on the impact of mobile payment on the use and adoption of existing payment instruments and contributes to the literature on consumer payment choice.
This paper furthermore offers novel evidence on the impact of mobile payment on the use and adoption of existing payment instruments and contributes to the literature on consumer payment choice.
Language
English
Keywords
Mobile payment
Payment behavior
Payment innovation
Retail
payments
payments
Payment cards
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Economic Policy
Refereed
Yes
Publisher
Springer
Publisher place
Heidelberg [u.a.]
Volume
30
Number
3
Start page
299
End page
336
Subject(s)
Division(s)
Eprints ID
248935