Research Discussion Papers, Bank of Finland
No 8/1999:
Forecasting the Electronification of Payments with Learning Curves: The Case of Finland
Jussi Snellman and Jukka Vesala ()
Abstract: This paper examines the electronification of noncash
payments in Finland and the extent to which noncash payment means are used
as substitutes for cash. We model the processes of cash substitution and
electronification of payments as 'S'-shaped learning curves and generate
forecasts by extrapolating these curves. The 'S'-shaped learning curves fit
the data well. Our results indicate that in Finland the cash substitution
process as a whole is approaching the saturation point. Although the
electronification process is clearly ongoing as regards larger-value bill
payments, for small-value point-of-sale payments we seem to have reached
saturation. Electronification of payments, having progressed swiftly and
extensively in Finland, is already beginning to slow down. We conclude the
paper with a discussion of the reasons for this turn of events and of the
different factors that affect the speed of diffusion of new means of
payment.
Keywords: payments; electronification; learning curves; (follow links to similar papers)
35 pages, July 20, 1999
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