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Multihoming in the market for payment media: evidence from young Finnish consumers

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Author Info
Hyytinen, Ari () (The Research Institute of the Finnish Economy (ETLA))
Takalo , Tuomas () (Bank of Finland Research)

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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.

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Paper provided by Bank of Finland in its series Research Discussion Papers with number 25/2004.

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Length: 43 pages
Date of creation: 13 Oct 2004
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Handle: RePEc:hhs:bofrdp:2004_025

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Related research
Keywords: payment media; multihoming; consumer awareness; adoption of financial technology;

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Find related papers by JEL classification:
E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
G20 - Financial Economics - - Financial Institutions and Services - - - General

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Suvanto , Antti & Hukkinen , Juhana, 2004. "Stable price level and changing prices," Research Discussion Papers 28/2004, Bank of Finland. [Downloadable!]
  2. Markku Stenborg, 2004. "Are There Biases in the Market Definition Procedure?," Discussion Papers 903, The Research Institute of the Finnish Economy. [Downloadable!]
  3. Hyytinen, Ari & Takalo , Tuomas, 2004. "Multihoming in the market for payment media: evidence from young Finnish consumers," Research Discussion Papers 25/2004, Bank of Finland. [Downloadable!]
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  4. Puhakka, Mikko, 2004. "Equilibrium dynamics under lump-sum taxation in an exchange economy with skewed endowments," Research Discussion Papers 29/2004, Bank of Finland. [Downloadable!]
  5. Mikko Puhakka, 2005. "Equilibrium dynamics under lump-sum taxation in an exchange economy with skewed endowments," Macroeconomics 0508033, EconWPA. [Downloadable!]
  6. Marc Rysman, 2006. "An Empirical Analysis of Payment Card Usage," Boston University - Department of Economics - Working Papers Series WP2006-002, Boston University - Department of Economics. [Downloadable!]
  7. Tomi Hussi, 2004. "A Managerial Relevance of Maintenance of Work Abilility. A Finnish Perspective," Discussion Papers 897, The Research Institute of the Finnish Economy. [Downloadable!]
  8. Elizabeth Klee, 2006. "Families' use of payment instruments during a decade of change in the U.S. payment system," Finance and Economics Discussion Series 2006-01, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  9. Leitemo, Kai & Söderström , Ulf, 2004. "Robust monetary policy in the New-Keynesian framework," Research Discussion Papers 31/2004, Bank of Finland. [Downloadable!]
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  10. Kari Alho, 2004. "The Finnish EMU Buffers and the Labour Market under Asymmetric Shocks," Discussion Papers 914, The Research Institute of the Finnish Economy. [Downloadable!]
  11. Nicole Jonker, 2005. "Payment Instruments as Perceived by Consumers - a Public Survey," DNB Working Papers 053, Netherlands Central Bank, Research Department. [Downloadable!]
  12. Mika Maliranta & Satu Nurmi, 2004. "Analyzing Entrepreneurship with the Finnish Linked Employer-Employee Data (FLEED).Matching and qualitative properties of the data," Discussion Papers 920, The Research Institute of the Finnish Economy. [Downloadable!]
  13. Nicole Jonker & Thijs Kettenis, 2007. "Explaining cash usage in the Netherlands: the effect of electronic payment instruments," DNB Working Papers 136, Netherlands Central Bank, Research Department. [Downloadable!]
  14. Liisa Leijola, 2004. "The Education System in Finland - Development and Equality," Discussion Papers 909, The Research Institute of the Finnish Economy. [Downloadable!]
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  17. Petri Rouvinen & Pekka Tsupari, 2004. "Inter-firm Collaboration and Electronic Business: Effects on Profitability in Finalnd," Discussion Papers 895, The Research Institute of the Finnish Economy. [Downloadable!]
  18. Petri Rouvinen, 2004. "Diffusion of Digital Mobile Telephony - Are Devoloping Countries Different?," Discussion Papers 901, The Research Institute of the Finnish Economy. [Downloadable!]
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  19. Jokivuolle , Esa & Lanne , Markku, 2004. "Trading Nokia: The roles of the Helsinki vs the New York stock exchanges," Research Discussion Papers 26/2004, Bank of Finland. [Downloadable!]
  20. Antti-Jussi Tahvanainen, 2004. "Academic Spin-offs in Finnish Biotechnology," Discussion Papers 900, The Research Institute of the Finnish Economy. [Downloadable!]
  21. Hyytinen, Ari & Takalo, Tuomas, 2008. "Consumer awareness and the use of payment media: evidence from young Finnish consumers," Research Discussion Papers 2/2008, Bank of Finland. [Downloadable!]
  22. Hannu Piekkola, 2004. "Active Ageing Policies in Finland," Discussion Papers 898, The Research Institute of the Finnish Economy. [Downloadable!]
  23. Pekka Ylä-Anttila & Jyrki Ali-Yrkkö & Martti Nyberg, 2004. "Foreign Ownership in Finland - Boosting Firm Performance and Changing Corporate Governance," Discussion Papers 904, The Research Institute of the Finnish Economy. [Downloadable!]
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