Research Discussion Papers, Bank of Finland
No 25/2004:
Multihoming in the market for 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
multihome and use many. As this pattern reflects the diffusion of new
payment media, we take a look at the determinants of the adoption of new
payment media through the window of multihoming. Using data on young
Finnish consumers, we find that one key determinant of multihoming
behaviour is consumer awareness. Our instrumental variable estimates
indicate that the better informed use 1.2–1.3 times more payment media than
the less informed. Because many payment method innovations are typically
first used simultaneously with established methods, our results suggest
that increasing consumer awareness could significantly speed up the
adoption of new means of payment, such electronic money and mobile
payments.
Keywords: payment media; multihoming; consumer awareness; adoption of financial technology; (follow links to similar papers)
JEL-Codes: E59; G20; (follow links to similar papers)
43 pages, October 13, 2004
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