Dynamics of Consumer Adoption of Financial Innovation: The Case of ATM Cards

Abstract

for their helpful comments. We are grateful to Luigi Guiso for generously sharing the data on the number of ATMs. All remaining errors are ours.

Why Is Cash (Still) So Entrenched? Insights From Canadian Shopping Diaries

“…The impact of new payment technologies on cashmanagement decisions has received special attention recently. Attanasio, Guiso, and Jappelli (2002), Alvarez and Lippi (2009), and Yang and Ching (2013), for example, use the Bank of Italy's extensive biennial cross-section Survey of Household Income and Wealth (SHIW) to exploit developments in cash behavior and payment innovations over time in order to estimate the impact of the introduction of ATM debit cards on the demand for cash and the costs of adopting such technology. justifies our decision to focus on transactions made at a store, eliminating those channels where either cash or cards are most likely ruled out as options to be accepted by merchants (e.g., transactions made by phone, on the Internet or person-to-person).…”

Impact of Healthy Alternatives on Consumer Choice: A Balancing Act

“…We thus allow household preferences to be a mixture of segment level preferences and further extend the augmentation such that segment membership may be a function of household level demographics and psychographics or the concomitant latent class approach (Dayton and Macready 1988). The concomitant approach has been used in the more recent literature to segment consumers in various contexts such as the dynamic adoption of new financial services (Yang and Ching 2013), the use of "uso-graphics" in the absence of demographics (Wilbur, Xu, and Kempe 2013), and the use of consumer behavioral measures in order for the segmentation to be actionable (Cambra-Fierro, Melero, and Javier Sese 2014). Such a formulation allows us to extract latent segments of households as a function of choice behavior and individual level characteristics.…”

Effects of institutional environment and technology development on payment choice

“…Hayashi and Klee (2003) and Anguelov et al (2004) show that general technology adoption by consumers is positively related to the use of electronic payments. Similarly, Virén (2009), Ferrari et al (2010) and Yang and Ching (2013) have offered evidence on the impact that automatic teller machine (ATM) networks have in consumers' decisions. Further, Humphrey et al (2006) and Hasan et al (2012) found that the development in the use of electronic retail payment instruments is related to notable improvements in banking performance.…”