Worldwide mobile wallet: a futuristic cashless system

Mumtaza, Qorina Mailil Husna; Nabillah, Shada Intishar; Amaliya, Sholikhatul; Rosabella, Yuveta; Hammad, Jehad

doi:10.31763/businta.v4i2.204

Cited by 9 publications

(10 citation statements)

References 6 publications

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“…In this study, we analyze survey data from a representative sample of the Norwegian population to investigate whether we find the same relationships in a Northern European country with a population that has a higher level of financial literacy, is more digitally advanced than the US population, 1 and is one of the countries furthest along in the world in becoming a cashless society (Mumtaza et al, 2020 ; Wewege & Thomsett, 2019 ). In this article, we include three different types of digital payment technologies, not just mobile payments as in US studies, and look at all adult generational groups.…”

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confidence: 95%

“…Recent studies have worryingly concluded that mobile payment users in the USA are at a higher risk of financial mismanagement than nonusers. In a world that moves quickly in the direction of forsaking the use of cash for digital financial tools (Mumtaza et al, 2020 ; Wewege & Thomsett, 2019 ), fueled even more by the COVID-19 pandemic (Shearman, 2020 ; eMarketer, 2021 ), it is important to investigate whether these US results are generalizable for other countries and generations. Gaining this knowledge could be imperative in taking measures to help stifle this financial mismanagement.…”

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confidence: 99%

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Financial Vulnerability, Financial Literacy, and the Use of Digital Payment Technologies

Seldal

Nyhus

2022

J Consum Policy

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The purpose of this study is to test the notion that the use of digital payment methods, such as paying with a mobile phone, increases the risk of financial vulnerability. Research from the USA indicates such a relationship, and we study whether this finding can be generalized to other countries. Motivated by recent changes in EU legislation related to financial transactions, we also examine willingness to use social media companies for money transfers along with sharing bank account information with third-party financial services. Exploiting data collected from a representative sample of the Norwegian adult population (n = 2202), we identify differences in financial behaviour and characteristics between users and nonusers of different digital payment methods. In contrast to US studies, we find that mobile payment users were less financially vulnerable than nonusers and those women were more likely users of digital payment technologies than men. Younger generations and those with low financial literacy were more financially vulnerable than others, although we did not find this to be related to the use of mobile payment or other digital payment methods. The results show that there is a need for more research from different countries outside of the USA to obtain an understanding of the consequences of increased digitalization of financial services. In addition, as COVID-19 has shifted a vast amount of spending online and these newer payment technologies have become more available, we need to gain a better understanding of how they influence financial behaviour.

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confidence: 95%

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confidence: 99%

Financial Vulnerability, Financial Literacy, and the Use of Digital Payment Technologies

Seldal

Nyhus

2022

J Consum Policy

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“…Urhie et al ( 2021 ) found mobile banking to promote cashless payments. In Singapore, the usage of cashless payments was high, but Singaporeans still prefer cash and card payments (Mumtaza et al 2020 ). There is no conclusive evidence that diffusion from cash to cashless payment would increase the usage of internet and mobile banking services.…”

Section: Cashless Payment Internet Banking and Mobile Bankingmentioning

confidence: 99%

The effect of cashless payments on the internet and mobile banking

Ong

Chong

2022

J Financ Serv Mark

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Some of the problems of cash transactions were the inconvenience of handling cash and the limited availability of banking services to facilitate cash withdrawals. The purpose of this paper is to examine the impact of cashless payments on the usage of the internet and mobile banking services in twofolds. First, the Wald test was applied to determine the short-run causal effect of the diffusion from cash to cashless payment on the internet and mobile banking. Second, the autoregressive distributed lag (ARDL) bounds test was employed to determine the long-run effect of cashless payments on the internet and mobile banking. The novelty of this study is threefold. First, this study employed the total value of cashless payments transacted per month data that were previously unavailable for time series analysis. Second, unlike studies on the intention to adopt cashless payments, internet and mobile banking, this study used data of actual transactions paid by a consumer. Third, this study established that the internet and mobile banking were delivery channels for cashless payments.

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“…Although mobile payments have been around for some time, Kaur et al (2020) say mobile wallets have contributed a new and more versatile way to process payments via the internet. Additionally, Mumtaza et al (2020) argue that mobile wallets can be a real alternative to cash, given how easy they are to use and the positive impact they have on cashless transactions.…”

Section: Box 2 How the Use Of Mobile Wallets Has Evolvedmentioning

confidence: 99%

“…On the other hand, the factors that determine the use of mobile wallets and mobile payments by the population have been identified in the literature. Ease of access and use, perceived usefulness and security, efficiency, transparency, limited access to banking services and the high cost of transfer services are the most predominant ones (see Iman, 2018;Karsen et al, 2019;Kaur et al, 2020;Mumtaza et al, 2020). However, the use of mobile wallets tends to be limited and mixed in developing countries (see Kaur et al, 2020;Mumtaza et al, 2020), where differences in internet access, literacy, access to banking services and infrastructure determine this heterogeneity.…”

Section: Box 2 How the Use Of Mobile Wallets Has Evolvedmentioning

confidence: 99%

Payment Systems Report - June of 2021

2022

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Banco de la República provides a comprehensive overview of Colombia’s finan¬cial infrastructure in its Payment Systems Report, which is an important product of the work it does to oversee that infrastructure. The figures published in this edition of the report are for the year 2020, a pandemic period in which the con¬tainment measures designed and adopted to alleviate the strain on the health system led to a sharp reduction in economic activity and consumption in Colom¬bia, as was the case in most countries. At the start of the pandemic, the Board of Directors of Banco de la República adopted decisions that were necessary to supply the market with ample liquid¬ity in pesos and US dollars to guarantee market stability, protect the payment system and preserve the supply of credit. The pronounced growth in mone¬tary aggregates reflected an increased preference for liquidity, which Banco de la República addressed at the right time. These decisions were implemented through operations that were cleared and settled via the financial infrastructure. The second section of this report, following the introduction, offers an analysis of how the various financial infrastructures in Colombia have evolved and per¬formed. One of the highlights is the large-value payment system (CUD), which registered more momentum in 2020 than during the previous year, mainly be¬cause of an increase in average daily remunerated deposits made with Banco de la República by the General Directorate of Public Credit and the National Treasury (DGCPTN), as well as more activity in the sell/buy-back market with sovereign debt. Consequently, with more activity in the CUD, the Central Securi¬ties Depository (DCV) experienced an added impetus sparked by an increase in the money market for bonds and securities placed on the primary market by the national government. The value of operations cleared and settled through the Colombian Central Counterparty (CRCC) continues to grow, propelled largely by peso/dollar non-deliverable forward (NDF) contracts. With respect to the CRCC, it is important to note this clearing house has been in charge of managing risks and clearing and settling operations in the peso/dollar spot market since the end of last year, following its merger with the Foreign Exchange Clearing House of Colombia (CCDC). Since the final quarter of 2020, the CRCC has also been re¬sponsible for clearing and settlement in the equities market, which was former¬ly done by the Colombian Stock Exchange (BVC). The third section of this report provides an all-inclusive view of payments in the market for goods and services; namely, transactions carried out by members of the public and non-financial institutions. During the pandemic, inter- and intra-bank electronic funds transfers, which originate mostly with companies, increased in both the number and value of transactions with respect to 2019. However, debit and credit card payments, which are made largely by private citizens, declined compared to 2019. The incidence of payment by check contin¬ue to drop, exhibiting quite a pronounced downward trend during the past last year. To supplement to the information on electronic funds transfers, section three includes a segment (Box 4) characterizing the population with savings and checking accounts, based on data from a survey by Banco de la República con-cerning the perception of the use of payment instruments in 2019. There also is segment (Box 2) on the growth in transactions with a mobile wallet provided by a company specialized in electronic deposits and payments (Sedpe). It shows the number of users and the value of their transactions have increased since the wallet was introduced in late 2017, particularly during the pandemic. In addition, there is a diagnosis of the effects of the pandemic on the payment patterns of the population, based on data related to the use of cash in circu¬lation, payments with electronic instruments, and consumption and consumer confidence. The conclusion is that the collapse in the consumer confidence in¬dex and the drop in private consumption led to changes in the public’s pay¬ment patterns. Credit and debit card purchases were down, while payments for goods and services through electronic funds transfers increased. These findings, coupled with the considerable increase in cash in circulation, might indicate a possible precautionary cash hoarding by individuals and more use of cash as a payment instrument. There is also a segment (in Focus 3) on the major changes introduced in regulations on the retail-value payment system in Colombia, as provided for in Decree 1692 of December 2020. The fourth section of this report refers to the important innovations and tech¬nological changes that have occurred in the retail-value payment system. Four themes are highlighted in this respect. The first is a key point in building the financial infrastructure for instant payments. It involves of the design and im¬plementation of overlay schemes, a technological development that allows the various participants in the payment chain to communicate openly. The result is a high degree of interoperability among the different payment service providers. The second topic explores developments in the international debate on central bank digital currency (CBDC). The purpose is to understand how it could impact the retail-value payment system and the use of cash if it were to be issued. The third topic is related to new forms of payment initiation, such as QR codes, bio¬metrics or near field communication (NFC) technology. These seemingly small changes can have a major impact on the user’s experience with the retail-value payment system. The fourth theme is the growth in payments via mobile tele¬phone and the internet. The report ends in section five with a review of two papers on applied research done at Banco de la República in 2020. The first analyzes the extent of the CRCC’s capital, acknowledging the relevant role this infrastructure has acquired in pro¬viding clearing and settlement services for various financial markets in Colom¬bia. The capital requirements defined for central counterparties in some jurisdic¬tions are explored, and the risks to be hedged are identified from the standpoint of the service these type of institutions offer to the market and those associated with their corporate activity. The CRCC’s capital levels are analyzed in light of what has been observed in the European Union’s regulations, and the conclusion is that the CRCC has a scheme of security rings very similar to those applied internationally and the extent of its capital exceeds what is stipulated in Colombian regulations, being sufficient to hedge other risks. The second study presents an algorithm used to identify and quantify the liquidity sources that CUD’s participants use under normal conditions to meet their daily obligations in the local financial market. This algorithm can be used as a tool to monitor intraday liquidity. Leonardo Villar Gómez Governor

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Worldwide mobile wallet: a futuristic cashless system

Cited by 9 publications

References 6 publications

Financial Vulnerability, Financial Literacy, and the Use of Digital Payment Technologies

Financial Vulnerability, Financial Literacy, and the Use of Digital Payment Technologies

The effect of cashless payments on the internet and mobile banking

Payment Systems Report - June of 2021

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