Point of Sale and Decision to Use e-Payment Channel
Keywords:
Point of Sale, Payment Channel, Perceived Convenience and Security, Hierarchical Elimination by Aspect, Nested Logit ModelAbstract
The purpose of this research was to determine the impact of network externality of e-payment channel and factors at the point of sale on the decision to use the e-payment channel. The conceptual framework was applied from hierarchical elimination-by-aspect decision-making concept, two-sided market concept, network externality, diffusion of innovation theory, and factors at the point of sale. A stratified random sampling technique was applied to select 3,000 customers from mobile applications to answer the self-report choice experimental questionnaire. Data were organized as scenario-based panel data and analyzed by a multinomial logit model and nested logit model. Research findings revealed that the IIA assumption was violated; thus, the nested logit model should be applied in explaining the two hierarchical steps of payment channel decision. The major factor that determines the first step of e-payment decisions was the customer’s perception of the network externality of e-payment. The decision to use a particular e-payment, either mobile banking, QR code payment, or e-wallet, was determined by factors at the point of sale, including availability, reward, transaction fee, perceived convenience, and security of that payment channel. Additionally, the effects of gender, age, and income of customers also significantly influenced the payment channel decision.
References
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Rochet, J. C., & Tirole, J. (2003). Platform competition in two-sided markets. Journal of the European Economic Association, 10(2), 180–218.
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Rysman, M. (2009). The Economics of Two-Sided Markets. Journal of Economics Perspectives, 23(3), 125–143.
Silva, V. G., Ramalho, E. A., & Vieira, C. R. (2016). The impact of SEPA in credit transfer payments: Evidence from the euro area. Research in International Business and Finance, 38, 404–416.
Swartz, D. D. G., Hahn, R. W., & Layne-Farrar, A. (2006). The Move Toward a Cashless Society: A Closer Look at Payment Instrument Economics. Review of Network Economics, 5(2), 175-198.
Tversky, A. (1972). Elimination by Aspects: A Theory of Choice. Psychological Review, 79, 281-299.
Tversky, A., & Sattath, S. (1979). Preference Trees. Psychology Review, 86, 542-573.
Weyl, E. G. (2010). A Price Theory of Multi-Sided Platforms. The American Economic Review, 100(4), 1642–1672.
Wolman, D. (2012). The end of money: Counterfeiters, preachers, techies, dreamers, and the coming cashless society. Cambridge, MA:Da Capo Press. Da Capo Press.
World Bank. (2011). Payment Systems Worldwide - A Snapshot: Outcomes of the Global Payment Survey 2010. Washington, DC: The World Bank.
Worthington, S. (2006). The Cashless Society The European Plastic Payment Card. The Cashless Society, 23(7), 31–40.
Arango-Arango, C. A., Bouhdaoui, Y., Bounie, D., Eschelbach, M., & Hernandez, L. (2018). Cash remains top-of-wallet! International evidence from payment diaries. Economic Modelling, 69, 38–48.
Armey, L. E., Lipow, J., & Webb, N. J. (2014). The impact of electronic financial payments on crime. Information Economics and Policy, 29, 46–57.
Bank of Thailand. (2016). Payment Systems Annual Report 2016. Retrieved from https://www.bot.or.th/English/PaymentSystems/Publication/PS_Annually_Report/Documents/Payment_2016_E.pdf
Bank of Thailand. (2019). Payment Systems Annual Report 2019. Retrieved from https://www.bot.or.th/English/PaymentSystems/Publication/PS_Annually_Report/Documents/Payment_2019_E.pdf
Bardey, D., Cremer, H., & Lozachmeur, J.M. (2014). Competition in two-sided markets with common network externalities. Review of Industrial Organization, 44, 327-345.
Bátiz-Lazo, B., Haigh, T., & Stearns, D. L. (2014). How the future shaped the past: The case of the cashless society. Enterprise and Society, 15(1), 103–131.
Beck, T., Pamuk, H., Ramrattan, R., & Uras, B.R. (2018). Payment instruments, finance and development. Journal of Development Economics, 133, 162-186.
Bendell, J. (2015). What price a cashless life?. New Scientist, 226(3024), 24–25.
Bergsten, E. E. (1966). Credit Cards: A Prelude to the Cashless Society. Boston College Industrial and Commercial Law Review, 8(3), 485–518. Retrieved from http://heinonline.org/HOL/Page?handle=hein.journals/bclr8&id=491&div=&collection=
Chen, H., Huynh, K. P., & Shy, O. (2019). Cash versus card: Payment discontinuities and the burden of holding coins. Journal of Banking and Finance, 99, 192–201.
Cohen, N., Rubinchik, A., & Shami, L. (2019). Towards a cashless economy: Economic and socio-political implications. European Journal of Political Economy, 61, 101820.
Chucherd, T. , Jindarak B., Piyakarnchana N., Tosborvorn T., Suwanik S., Srisongkram A., Tonghui T., Kongphalee T., & Shimno A. (2018). Digitalization on Financial Services and Implications for Monetary Policy in Thailand (in Thai). Working Paper. Bank of Thailand.
De Reuver, M., Sørensen, C., & Basole, R. C. (2018). The digital platform: A research agenda. Journal of Information Technology, 33(2), 124–135.
Fabris, N. (2019). Cashless Society – The Future of Money or a Utopia?. Journal of Central Banking Theory and Practice, 1, 53-66.
Garcia-Swartz, D. D., Hahn, R. W., & Layne-Farrar, A. (2009). The Move Toward a Cashless Society: A Closer Look at Payment Instrument Economics. Review of Network Economics, 5(2), 175–198.
Hamza, A., & Shah, A. (2014). Gender and Mobile Payment System Adoption among Students of Tertiary Institutions in Nigeria. International Journal of Computer and Information Technology, 3 (1), 13-20.
Holzer, A., & Ondrus, J. (2009, April). Trends in mobile application development. In International Conference on Mobile Wireless Middleware, Operating Systems, and Applications (pp. 55-64).Berlin, Heidelberg: Springer.
Humbani, M., & Wiese, M. (2018). A Cashless Society for All: Determining Consumers’ Readiness to Adopt Mobile Payment Services. Journal of African Business, 19(3), 409–429.
Krivosheya, E., & Korolev, A. (2016). Benefits of the retail payments card market: Russian cardholders’ evidence. Journal of Business Research, 69(11), 5034–5039.
Li, B., McAndrews, J., & Wang, Z. (2019). Two-Sided Market, R&D and Payments System Evolution. Federal Reserve Bank of Richmond Working Papers, 19(03), 1–45.
Lin, K. Y., & Lu, H. P. (2011). Why people use social networking sites: An empirical study integrating network externalities and motivation theory. Computers in Human Behavior, 27(3), 1152–1161.
Luna, I. R. de, Liébana-Cabanillas, F., Sánchez-Fernández, J., & Muñoz-Leiva, F. (2019). Mobile payment is not all the same: The adoption of mobile payment systems depending on the technology applied. Technological Forecasting and Social Change, 146, 931–944.
Magnac, T. (2017). ATM foreign fees and cash withdrawals. Journal of Banking and Finance, 78, 117–129.
Martikainen, E., Schmiedel, H., & Takalo, T. (2015). Convergence of European retail payments. Journal of Banking and Finance, 50, 81–91.
Rochet, J. C., & Tirole, J. (2003). Platform competition in two-sided markets. Journal of the European Economic Association, 10(2), 180–218.
Roger, E. (2003). Diffusion of Innovations (5th ed.).New York, NY: Free Press.
Rysman, M. (2009). The Economics of Two-Sided Markets. Journal of Economics Perspectives, 23(3), 125–143.
Silva, V. G., Ramalho, E. A., & Vieira, C. R. (2016). The impact of SEPA in credit transfer payments: Evidence from the euro area. Research in International Business and Finance, 38, 404–416.
Swartz, D. D. G., Hahn, R. W., & Layne-Farrar, A. (2006). The Move Toward a Cashless Society: A Closer Look at Payment Instrument Economics. Review of Network Economics, 5(2), 175-198.
Tversky, A. (1972). Elimination by Aspects: A Theory of Choice. Psychological Review, 79, 281-299.
Tversky, A., & Sattath, S. (1979). Preference Trees. Psychology Review, 86, 542-573.
Weyl, E. G. (2010). A Price Theory of Multi-Sided Platforms. The American Economic Review, 100(4), 1642–1672.
Wolman, D. (2012). The end of money: Counterfeiters, preachers, techies, dreamers, and the coming cashless society. Cambridge, MA:Da Capo Press. Da Capo Press.
World Bank. (2011). Payment Systems Worldwide - A Snapshot: Outcomes of the Global Payment Survey 2010. Washington, DC: The World Bank.
Worthington, S. (2006). The Cashless Society The European Plastic Payment Card. The Cashless Society, 23(7), 31–40.
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Published
2021-06-07
How to Cite
Jantarakolica, T., Jantarakolica, K., & Wongkantarakorn, J. (2021). Point of Sale and Decision to Use e-Payment Channel. Thailand and The World Economy, 39(2), 37–55. Retrieved from https://so05.tci-thaijo.org/index.php/TER/article/view/251891
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