Research Discussion Papers, Bank of Finland
No 2/2008:
Consumer awareness and the use of payment media: evidence from young Finnish consumers
Ari Hyytinen ()
and Tuomas Takalo ()
Abstract: In the market for payment media, some consumers use only
one medium when paying for their point-of-sale transactions, while others
use many. This pattern reflects the diffusion of new payment media, because
a payment method innovation is typically first used simultaneously with the
established methods. We study the use of multiple payment media by
employing data on young Finnish consumers. We find that the use of multiple
payment media is directly related to consumer awareness and that not
controlling for the endogeneity of awareness can bias its effect downwards.
These results suggest that increasing consumer awareness may have been
underlying the rise of debit card use around the world. It could also speed
up the adoption of new means of payment, such electronic money and mobile
payments. To the extent that antitrust concerns in the market for payment
media stem from the lack of information, improving consumer awareness could
be a remedy.
Keywords: payment media; consumer awareness; adoption of financial technology; (follow links to similar papers)
JEL-Codes: E59; G20; (follow links to similar papers)
34 pages, February 27, 2008
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