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Consumer awareness and the use of payment media: evidence from young Finnish consumers

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  • Hyytinen, Ari
  • Takalo, Tuomas

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.

Suggested Citation

  • Hyytinen, Ari & Takalo, Tuomas, 2008. "Consumer awareness and the use of payment media: evidence from young Finnish consumers," Bank of Finland Research Discussion Papers 2/2008, Bank of Finland.
    • Handle: RePEc:zbw:bofrdp:rdp2008_002
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Anneke Kosse & David-Jan Jansen, 2011. "Choosing how to pay: the influence of home country habits," DNB Working Papers 328, Netherlands Central Bank, Research Department.
    2. Hasan, Iftekhar & Martikainen, Emmi & Takalo, Tuomas, 2014. "Promoting efficient retail payments in Europe," Research Discussion Papers 20/2014, Bank of Finland.
    3. Martikainen, Emmi & Schmiedel, Heiko & Takalo, Tuomas, 2015. "Convergence of European retail payments," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 81-91.
    4. Hasan, Iftekhar & Martikainen, Emmi & Takalo, Tuomas, 2015. "Promoting efficient retail payments in Europe," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 8(4), pages 395-406, January.
    5. Rochet, Jean-Charles & Wright, Julian, 2010. "Credit card interchange fees," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1788-1797, August.
    6. Anneke Kosse, 2013. "The Safety of Cash and Debit Cards: A Study on the Perception and Behavior of Dutch Consumers," International Journal of Central Banking, International Journal of Central Banking, vol. 9(4), pages 77-98, December.
    7. Kopsakangas-Savolainen Maria & Takalo Tuomas, 2014. "Competition Before Sunset: The Case of the Finnish ATM Market," Review of Network Economics, De Gruyter, vol. 13(1), pages 1-33, March.
    8. Kopsakangas-Savolainen Maria & Takalo Tuomas, 2014. "Competition Before Sunset: The Case of the Finnish ATM Market," Review of Network Economics, De Gruyter, vol. 13(1), pages 1-33, March.
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    More about this item

    Keywords

    payment media; consumer awareness; adoption of financial technology;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other

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