The impact of mobile payment on payment choice

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.

Users Supporting Multiple (Mobile) Electronic Payment Systems in Online Purchases: An Empirical Study of Their Payment Transaction Preferences

“…Most studies of consumer payment behaviour attempt to understand how consumers choose between different payment methods [27], [32], [41], [42]. Hirschman [31] proved that consumers differentiate between diverse payment systems and they can evaluate these payment methods in different ways.…”

“…If the consumer does not find an acceptable means of payment, he/she may give up his/her attempt to purchase [7], [42], [43]. On the other hand, Trütsch [41] presented the impact of mobile payment on the choice of payment methods and offers another contributes to the economics payment with respect to consumer payment choice and highlighted the dynamics between mobile and traditional payment methods. Consequently, it appeared that the adoption and use of electronic payment instruments were primarily determined by personal, transactional and situational characteristics.…”

Electronic payment adoption and consumers’ spending growth: empirical evidence from Nigeria

“…Using a multiple regression analysis, the study finds that the marketing determinants do not significantly influence consumer purchase decision while both technological and cultural determinants do. On his part, Trutsch [38] examined the effect of contactless payment on the spending pattern of consumers using the debit and credit cards for different transaction types at the point of sales in the US in 2010. The survey method was used to achieve this objective and the study concludes that debit and credit cards usage leads to an increase in the ratio of spending by approximately 10 and 8% respectively.…”

Switching from cash to mobile payment: what's the hold-up?

“…In other words, using m-payment takes away the opportunity for consumers to use cash for a particular transaction. As Trütsch (2016) stated that m-payment complements credit/debit cards, this implies a shift rather than a switch. Additionally, it was found that those who use cards as one of their payment methods were less likely to adopt m-payment when compared to others who only use cash.…”