IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/34280.html
   My bibliography  Save this paper

Drivers of Digital Payment Adoption: Lessons from Brazil, Costa Rica, and Mexico

Author

Listed:
  • David Argente
  • Paula Gonzalez Alvarez
  • Esteban Méndez
  • Diana Van Patten

Abstract

Digital payment platforms can displace cash and extend financial services to underserved populations, yet many adults worldwide remain unbanked. Leveraging granular microdata on individual transactions and user characteristics, we argue that broad cash substitution via peer-to-peer (P2P) platforms depends on a “rapid low income-gradient”, the speed at which adoption spreads from affluent early users to lower-income groups. In three Latin American cases, Brazil’s Pix, Costa Rica’s Sinpe Móvil, and Mexico’s CoDi, we document that low adoption costs, strong network effects, coordinated supply-side integration, and early awareness efforts enabled Pix and Sinpe Móvil to reach nearly all income segments within five years, whereas CoDi remains characterized by low usage and predominantly high-income adopters.

Suggested Citation

  • David Argente & Paula Gonzalez Alvarez & Esteban Méndez & Diana Van Patten, 2025. "Drivers of Digital Payment Adoption: Lessons from Brazil, Costa Rica, and Mexico," NBER Working Papers 34280, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34280
    Note: DEV EFG ME
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w34280.pdf
    Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Diego A. Comin & Xavier Cirera & Marcio Cruz, 2025. "Technology Sophistication Across Establishments," NBER Working Papers 33358, National Bureau of Economic Research, Inc.
    2. David Alfaro‐Serrano & Tanay Balantrapu & Ritam Chaurey & Ana Goicoechea & Eric Verhoogen, 2021. "Interventions to promote technology adoption in firms: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(4), December.
    3. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    4. Nicolas Crouzet & Apoorv Gupta & Filippo Mezzanotti, 2023. "Shocks and Technology Adoption: Evidence from Electronic Payment Systems," Journal of Political Economy, University of Chicago Press, vol. 131(11), pages 3003-3065.
    5. Jenny C. Aker & Isaac M. Mbiti, 2010. "Mobile Phones and Economic Development in Africa," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 207-232, Summer.
    6. Pierre Bachas & Paul Gertler & Sean Higgins & Enrique Seira, 2021. "How Debit Cards Enable the Poor to Save More," Journal of Finance, American Finance Association, vol. 76(4), pages 1913-1957, August.
    7. Pedro Lara De Arruda & Marina Lazarotto de Andrade & Tiago Falcão & Diana Teixeira Barbosa & Matteo Morgandi, 2021. "Auxílio Emergencial - Lessons from the Brazilian experience responding to COVID-19," World Bank Publications - Reports 37254, The World Bank Group.
    8. Sean Higgins, 2024. "Financial Technology Adoption: Network Externalities of Cashless Payments in Mexico," American Economic Review, American Economic Association, vol. 114(11), pages 3469-3512, November.
    9. Emily Breza & Martin Kanz & Leora F. Klapper, 2020. "Learning to Navigate a New Financial Technology: Evidence from Payroll Accounts," NBER Working Papers 28249, National Bureau of Economic Research, Inc.
    10. Fernando E. Alvarez & David Argente & Francesco Lippi & Esteban Méndez & Diana Van Patten, 2023. "Strategic Complementarities in a Dynamic Model of Technology Adoption: P2P Digital Payments," NBER Working Papers 31280, National Bureau of Economic Research, Inc.
    11. William Jack & Tavneet Suri, 2011. "Mobile Money: The Economics of M-PESA," NBER Working Papers 16721, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Riley, Emma & Shonchoy, Abu S. & Osei, Robert Darko, 2025. "Incentives and endorsement for technology adoption: Evidence from mobile banking in Ghana," Journal of Development Economics, Elsevier, vol. 176(C).
    2. Cátia Batista & Pedro C. Vicente, 2025. "Is Mobile Money Changing Rural Africa? Evidence from a Field Experiment," The Review of Economics and Statistics, MIT Press, vol. 107(3), pages 835-844, May.
    3. Saniya Ansar & Leora Klapper & Dorothe Singer, 2025. "Financial Inclusion and Economic Development : A Review of the Data and Evidence," Policy Research Working Paper Series 11021, The World Bank.
    4. Arouna Kouandou & Sophie Legras, 2025. "Welfare Impacts of Mobile Banking Use in Rural Africa: Gender Disaggregated Evidence from Eight Sub-Saharan African Countries," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 37(4), pages 812-838, August.
    5. Ahmad, Ahmad Hassan & Green, Christopher J. & Jiang, Fei & Murinde, Victor, 2023. "Mobile money, ICT, financial inclusion and growth: How different is Africa?," Economic Modelling, Elsevier, vol. 121(C).
    6. Matheus C Sampaio & Jose Renato H Ornelas, 2024. "Payment technology complementarities and their consequences on the banking sector: evidence from Brazil's Pix," BIS Papers chapters, in: Bank for International Settlements (ed.), Faster digital payments: global and regional perspectives, volume 127, pages 17-43, Bank for International Settlements.
    7. Barros, Fernando & Delalibera, Bruno R. & Neto, Valdemar Pinho & Rangel, Victor, 2025. "Natural disasters and financial technology adoption," Economics Letters, Elsevier, vol. 247(C).
    8. Morshed, Monzur, 2025. "Mobile Money and the Future of Digital Currency: Evidence from Kenya," OSF Preprints msbz4_v1, Center for Open Science.
    9. Chen, Yutong & Chiplunkar, Gaurav & Sekhri, Sheetal & Sen, Anirban & Seth, Aaditeshwar, 2025. "How do political connections of firms matter during an economic crisis?," Journal of Development Economics, Elsevier, vol. 175(C).
    10. Gonzalez, Robert & Maffioli, Elisa M., 2024. "Is the phone mightier than the virus? Cellphone access and epidemic containment efforts," Journal of Development Economics, Elsevier, vol. 167(C).
    11. Catia Batista & Pedro C. Vicente, 2020. "Adopting Mobile Money: Evidence from an Experiment in Rural Africa," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 594-598, May.
    12. Chen, S. & Doerr, S. & Frost, J. & Gambacorta, L. & Shin, H.S., 2023. "The fintech gender gap," Journal of Financial Intermediation, Elsevier, vol. 54(C).
    13. Howell, Rachel & van Beers, Cees & Doorn, Neelke, 2018. "Value capture and value creation: The role of information technology in business models for frugal innovations in Africa," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 227-239.
    14. Tut, Daniel, 2023. "FinTech and the COVID-19 pandemic: Evidence from electronic payment systems," Emerging Markets Review, Elsevier, vol. 54(C).
    15. Lashitew, Addisu A. & van Tulder, Rob & Liasse, Yann, 2019. "Mobile phones for financial inclusion: What explains the diffusion of mobile money innovations?," Research Policy, Elsevier, vol. 48(5), pages 1201-1215.
    16. Leo Van Hove & Antoine Dubus, 2019. "M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?," Sustainability, MDPI, vol. 11(3), pages 1-26, January.
    17. Markus K. Brunnermeier & Nicola Limodio & Lorenzo Spadavecchia, 2023. "Mobile Money, Interoperability, and Financial Inclusion," NBER Working Papers 31696, National Bureau of Economic Research, Inc.
    18. Anthea Paelo & Simon Roberts, 2022. "Competition and Regulation of Mobile Money Platforms in Africa: A Comparative Analysis of Kenya and Uganda," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(3), pages 463-489, May.
    19. Francisco J. Buera & Nicholas Trachter, 2024. "Sectoral Development Multipliers," NBER Working Papers 32230, National Bureau of Economic Research, Inc.
    20. Fakir Md Yunus & Safayet Khan & Tanjilut Tasnuba & Paroma Afsara Husain & Amanda Joy Misiti, 2016. "Are we ready to adopt mobile money in non-profit sector?," Journal of Innovation and Entrepreneurship, Springer, vol. 5(1), pages 1-13, December.

    More about this item

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:34280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.