Why are electronic payments preferred? Evidence from international data.

摘要

This paper investigates the relationship between payment methods (card, check, electronic giro, and paper giro) and a variety of explanatory variables, which are composed of macroeconomic factors, banking industry structure, availability of electronic payments, and information technology variables.;This paper uses the annual panel data, mainly constructed by the Bank for International Settlements (BIS) and the European Central Bank (ECB), containing all the comprehensive payment systems information of 37 advanced and developing countries over the period 1987--1999. This paper utilizes a newly developed econometric methodology, the generalized method of moments (GMM), in analyzing the main determinants that influence the use of electronic means of payment.;I also run the regressions using not only the GMM technique, but also OLS and 3SLS methods, in order to compare the results of each different estimation method. The results show that the GMM improves the regression estimates compared to the OLS and 3SLS estimations by curing simultaneous equation bias, fixed effects, and heteroskedasticity problems in the system equation.;The crucial finding is that network and information technology effects in the electronic payment system are very strong. It turns out that a smaller number of networks results in an increase in the use of electronic payments. The number of mobile phones, ATMs, and POS terminals has a positive effect on the widespread use of card and electronic giro transactions. This paper observes that a highly concentrated banking system and high interest margins are likely to encourage the intensive use of cards.;This paper finds that higher levels of GDP are associated with greater use of most non-cash payments, and that the interest rate has a negative effect on card and electronic giro payments as theoretical models show. It is also found that electronic payment modes are substitutes for paper giro in accordance with the previous literature. In addition, this paper observes a significant positive relationship between small bank notes and checks in line with earlier studies. This evidence supports the argument that small notes may not be an endangered species (Goodhart and Krueger, 2001).