Mobile Payment Adoption: An Empirical Investigation on Alipay
51 Pages Posted: 12 Nov 2018 Last revised: 1 Apr 2020
Date Written: April 18, 2019
The rapid development of smartphone technologies have introduced new mobile payment methods for consumer consumption, in addition to traditional physical-card payment and personal computer (PC) based payment. In this paper, we seek to investigate the determinants and outcomes of mobile payment adoption on consumer consumption behaviors, and the interrelationships between mobile payment and other existing payment methods. We rely on a unique data set from a large Asian bank, which records consumer credit card transactions in both online and offline transaction channels. The mobile payment under study in this paper is from Alipay, which is now the largest mobile payment platform in the world. Our results unveil that both internal factors such as higher transaction demand and external factors such as local penetration are associated with mobile payment adoption. We then evaluate the post-adoption effects, and observe a 2.93% increment in the total transaction amount and a 7.14% increment in frequency. Our results demonstrate that mobile payment acts as a substitute to the physical-card payment, and as a complement to the PC based payment. These substitution and complementarity effects first increase and then subsequently decrease over time. Our work offers managerial implications for bank and retail managers on multichannel payment management by disentangling these countervailing consumer behaviors.
Keywords: mobile payment, adoption, channel, offline, online, credit card
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