Technology Adoption and Leapfrogging: Racing for Mobile Payments

Pengfei Han and Zhu Wang

No 21-05, Working Paper from Federal Reserve Bank of Richmond

Abstract: Paying with a mobile phone is a cutting-edge innovation transforming the global payments industry. However, some advanced economies like the U.S. are lagging behind in mobile payment adoption. We construct a dynamic model with sequential payment innovations to explain this puzzle, which uncovers how advanced economies' past success in adopting card-payment technology holds them back in the mobile-payment race. Our calibrated model matches the cross-country adoption patterns of card and mobile payments and also explains why advanced and developing countries favor different mobile payment solutions. Based on the model, we conduct several quantitative exercises for welfare and policy analyses.

Keywords: Technology adoption; Sunk cost; Payment system (search for similar items in EconPapers)
JEL-codes: E4 G2 O3 (search for similar items in EconPapers)
Pages: 44
Date: 2021-03-01
New Economics Papers: this item is included in nep-ban, nep-dge, nep-mac, nep-pay and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.richmondfed.org/-/media/richmondfedorg ... ers/2021/wp21-05.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedrwp:90445

Ordering information: This working paper can be ordered from

DOI: 10.21144/wp21-05

Access Statistics for this paper

More papers in Working Paper from Federal Reserve Bank of Richmond Contact information at EDIRC.
Bibliographic data for series maintained by Christian Pascasio ().