<abstract xmlns="http://www.w3.org/1999/xhtml"><p>We examine the preferences of respondents for six types of payment instruments, namely cash, debit and credit cards, card and server-based electronic money, and internet or mobile banking. By applying a nested logit model to 500 household data covering six provincial capitals in Indonesia, we find that the decision to choose payment instruments is made sequentially. Socio-economic characteristics, including education, age, income, and transaction objectives or functionality have a significant effect on the probability of using non-cash electronic payment instruments. We find a substitution pattern between payment instruments, not only between cash and non-cash instruments but also between non-cash instruments. In light of these findings, appropriate payment system policies are in order to hasten the use of non-cash payment.</p></abstract>

We examine the preferences of respondents for six types of payment instruments, namely cash, debit and credit cards, card and server-based electronic money, and internet or mobile banking. By applying a nested logit model to 500 household data covering six provincial capitals in Indonesia, we find that the decision to choose payment instruments is made sequentially. Socio-economic characteristics, including education, age, income, and transaction objectives or functionality have a significant effect on the probability of using non-cash electronic payment instruments. We find a substitution pattern between payment instruments, not only between cash and non-cash instruments but also between non-cash instruments. In light of these findings, appropriate payment system policies are in order to hasten the use of non-cash payment.

Indonesian Household Payment Choice: A Nested Logit Analysis

Department of Payment System Policy, Bank

Journal of Central Banking Theory and Practice

This work is licensed under the Creative Commons Attribution 4.0 Public License.

{"article-title":"Indonesian Household Payment Choice: A Nested Logit Analysis"}

We examine the preferences of respondents for six types of payment instruments, namely cash, debit and credit cards, card and server-based electronic money,...

Indonesian Household Payment Choice: A Nested Logit Analysis

Publié en ligne: 16 juil. 2020

Pages: 291 - 313

DOI: https://doi.org/10.2478/jcbtp-2020-0032

Mots clés
Payment Preferences, Payment Instruments, Substitution between Payment Instruments

© 2020 Nur Annisa Hasniawati et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Indonesian Household Payment Choice: A Nested Logit Analysis

Publié en ligne: 16 juil. 2020

Pages: 291 - 313

DOI: https://doi.org/10.2478/jcbtp-2020-0032

Mots clésPayment Preferences, Payment Instruments, Substitution between Payment Instruments

© 2020 Nur Annisa Hasniawati et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Mots clés
Payment Preferences, Payment Instruments, Substitution between Payment Instruments