American Economic Review Vol. 114 No. 11 2024
Financial Technology Adoption: Network Externalities of Cashless Payments in Mexico
Abstract
Do coordination failures constrain financial technology adoption? Exploiting the Mexican government’s rollout of 1 million debit cards to poor households from 2009 to 2012, I examine responses on both sides of the market and find important spillovers and distributional impacts. On the supply side, small retail firms adopted point-of-sale terminals to accept card payments. On the demand side, this led to a 21 percent increase in other consumers’ card adoption. The supply-side technology adoption response had positive effects on both richer consumers and small retail firms: richer consumers shifted 13 percent of their supermarket consumption to small retailers, whose sales and profits increased.
- DOI
- 10.1257/aer.20201952
- Volume
- 114
- Issue
- 11
- Pages
- 3469-3512
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref