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Cashless Payments and Economic Growth: Evidence from Selected OECD Countries

Author

Listed:
  • Teck-Lee Wong

    (Faculty of Economics and Administration, University of Malaya, Kuala Lumpur, Malaysia)

  • Wee-Yeap Lau

    (Faculty of Economics and Administration, University of Malaya, Kuala Lumpur, Malaysia)

  • Tien-Ming Yip

    (Faculty of Economics and Administration, University of Malaya, Kuala Lumpur, Malaysia)

Abstract

This study investigates the relationship between cashless payments and economic growth in selected OECD countries. Using annual data from 2007 to 2016, our results indicate that: Firstly, cashless payment stimulates economic growth in OECD countries. Specifically, the growth-enhancing effect is found in debit card payment while credit card, e-money and cheque payment have no impact on economic growth; Secondly, the positive relationship between economic growth and debit card payment is robust after controlling for the effect of endogeneity, omitted variable bias and outliers. Based on the findings, this study offers some imperative policy recommendations.

Suggested Citation

  • Teck-Lee Wong & Wee-Yeap Lau & Tien-Ming Yip, 2020. "Cashless Payments and Economic Growth: Evidence from Selected OECD Countries," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 9(special i), pages 189-213.
    • Handle: RePEc:cbk:journl:v:9:y:2020:i:si:p:189-213
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    More about this item

    Keywords

    Cashless payments; Economic growth; Organisation for Economic Co-operation and Development (OECD); debit card payment;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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