Ritsumeikan Journal of Asia Pacific Studies
Online ISSN : 2432-4302
Print ISSN : 1344-4204
ISSN-L : 1344-4204
Mobile Payments: The Economic Impact of Today’s Financial Payment Tools
Francisco R. VASSALLO
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JOURNAL OPEN ACCESS

2020 Volume 38 Issue 1 Pages 39-55

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Abstract

This paper examines the causal relationship between the adoption of mobile payment systems and economic growth on a panel of the 19 countries in the Eurozone. To do this it relies heavily on previous studies examining the relationship of cashless payment systems in general, using Real GDP as a proxy for economic growth. To determine this relationship this paper executes several tests to determine the manner of the nature of the adoption of these payment systems, with a focus on determining the existence of a long-run equilibrium. To ascertain the specific effect of mobile payment systems, this paper proposes the use of the value of transactions utilizing Electornic Money and the Mobile Payment-Enabled Operating Systems’ market share as proxies by which to measure the economic activity produced by mobile payment systems. To test the validity of this claim, correlation and causal tests are performed, followed by the inclusion and update to the existing regression models that are tailored to deal with cashless payment systems in general. This paper finds evidence that supports the literature’s conclusion of the existence of a long-run positive relationship between the adoption of cashless payments and Real GDP, and this relationship can be extended to the entirety of the Eurozone as opposed to just a few highly developed member states. Further, this paper finds that E-Money and Mobile Payment-Enabled Operating Systems’ market share can be considered causally related, thus the interaction between these two represent a powerful variable to measure the impact of mobile payment systems in a macroeconomic fashion. Lastly, in the regressions performed in this paper, a statistically significant positive relationship between the adoption of mobile payment systems and Real GDP growth is found.

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© 2020 Ritsumeikan Center for Asia Pacific Studies
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