Title: The diffusion pattern of non-cash payments: evidence from China

Authors: Ming Qi; Santiago Carbó-Valverde; Francisco Rodríguez-Fernández

Addresses: School of Business Administration, China University of Petroleum (Beijing), 18 Fuxue Road, Changping District, Beijing, 102249, China ' Bangor Business School, Bangor University, Hen Goleg, College Road, Bangor, LL57 2DG Gwynedd, UK ' Facultad de Ciencias Economicas y Empresariales, Universidad de Granada, Campus Universitario de Cartuja s/n, E-18071, Spain

Abstract: Exploiting an original dataset of non-cash payments during the period between 1996 and 2005, this study analyses the diffusion patterns of non-cash payments in China. Based on both exponential and Gompertz curves, the point of sale (POS) terminal has shown a higher diffusion rate than that of automatic teller machines (ATMs). This result is also robust when a time trend is interacted with rivals' precedence, network effects and market concentration. The diffusion rates of both ATM and POS terminals have accelerated after 2002, when UnionPay was established in China. The diffusion rate of ATMs is found to be mainly driven by rivals' adoption of them. Market concentration boosts the diffusion of POS terminals. In spite of the rising number of POS terminals and merchants, the volume of POS transactions is low. The diffusion rate of POS is, however, negatively affected by interchange fees.

Keywords: diffusion patterns; non-cash payments; automatic teller machines; ATMs; point of sale; POS terminals; exponential curve; Gompertz curve; rival precedence; network effects; market concentration; China; fees.

DOI: 10.1504/IJTM.2016.074652

International Journal of Technology Management, 2016 Vol.70 No.1, pp.44 - 57

Received: 16 Aug 2013
Accepted: 18 May 2014

Published online: 12 Feb 2016 *

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