Payment System Innovation and Retailer Efficiency: Measuring the Impact of National Payment Gateway Implementation in Indonesia

Arianto Muditomo (), Yusman Syaukat, Trias Andati and Nur Hasanah
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Arianto Muditomo: IPB University, School of Business
Yusman Syaukat: IPB University, Faculty of Economics and Management
Trias Andati: PT. Adhimix Precast Indonesia
Nur Hasanah: IPB University, School of Business

A chapter in Proceedings of the Business Innovation and Engineering Conference (BIEC 2022), 2023, pp 44-53 from Springer

Abstract: Abstract The purpose of this study is to evaluate the effect of payment system innovation on retailer efficiency because of the implementation of the National Payment Gateway in Indonesia. We use a two-stage approach at the individual and national levels by adopting an efficient frontier approach using the Malmquist Productivity Index (MPI) based on data envelopment analysis (DEA) to measure the productivity of 5 Indonesian retailers during 2015–2020. Total assets, total expenses, and number of outlets are considered as inputs while net income, profit, and earnings per share (EPS) are considered as outputs. Result indicated that there was no significant improvement after GPN implementation in 2017. There was a lower improvement in MPI (1,0085971) during 2018–2020 as a period after GPN implementation as compared to MPI (1,0834615) during 2015–2017 as a period before GPN implementation. This study, however, is unable to prove that the implementation of GPN can improve retailer efficiency in Indonesia. The study’s findings can help in our understanding of the efficient frontier, which can explain the relationship between payment system innovation and retailer efficiency. This will provide information for payment system policymakers to consider retail industry impact when setting up and/or initiating payment system innovations in the future.

Keywords: data envelopment analysis; efficiency; GPN; malmquist productivity; payment system (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-144-9_5

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DOI: 10.2991/978-94-6463-144-9_5

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