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Network effects at retail payments market: evidence from Russian individuals

Author

Listed:
  • Egor Krivosheya

    (Moscow school of management SKOLKOVO, National Research University Higher School of Economics, Russian Federation)

  • Ekaterina Semerikova

    (Moscow school of management SKOLKOVO)

Abstract

This research empirically evaluates the effect of network externalities for individuals behavior at Russian retail payments market. Specifically, the effects of direct and indirect network externalities for cardholding and usage probabilities are examined. Using the representative sample of 1500 individuals from all Russian regions this study finds significant robust evidence of positive association between the degree of both types of network externalities and individuals? activity at the Russian retail payments market. Results are economically significant: a standard deviation increase in network effects leads to 2.5-4 percentage points increase in probability of cardholding and usage. Findings imply that one needs to account for network effects which play an important role for the payment behavior before implementing payment stimulating programs in Russia aimed at cardholders or users.

Suggested Citation

  • Egor Krivosheya & Ekaterina Semerikova, 2018. "Network effects at retail payments market: evidence from Russian individuals," Proceedings of Economics and Finance Conferences 6910185, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:6910185
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    File URL: https://iises.net/proceedings/10th-economics-finance-conference-rome/table-of-content/detail?cid=69&iid=019&rid=10185
    File Function: First version, 2018
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    Cited by:

    1. Krivosheya, Egor, 2020. "The role of financial innovations in consumer behavior in the Russian retail payments market," Technological Forecasting and Social Change, Elsevier, vol. 161(C).

    More about this item

    Keywords

    Retail payments; payment cards; network effects; cardholders' behavior; financial services;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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