Abstract
E-money is an innovation of payment methods. A transaction using electronic money has more advantages than using cash. These advantages make electronic money transactions keep increasing. Currently, the increment of electronic money transactions didn’t follow by a reduction in the amount of money in circulation. This study aims to analyze the effect of macro instruments such as Gross Domestic Product, money supply (M1), inflation, and BI Rate on e-money transactions. This study focuses more on server-based electronic money and cash-substitution capabilities. This research uses quantitative methods using time-series data from January 2009 to December 2019, and the Error Correction Model Engle-Granger was employed. The results of the study show that the GDP variable in a short-run has an insignificant negative effect, while in a long-run has a positive effect, it is also significant on e-money transaction in Indonesia. The M1 variable in the short-run has an insignificant negative effect, while in the long-run, it has a significant negative effect on e-money in Indonesia. Inflation variables in both the short and long-run have an insignificant positive effect on e-money in Indonesia. The variable BI rate in the short and long-run have an insignificant negative effect on e-money in Indonesia.
Highlights
The infiltration of advanced technology era in communication and information, especially the internet, has a broad impact in various fields, including economics
The result published by Asosiasi Penyelenggara Jasa Internet Indonesia (APJII) states that 64.8% of people in Indonesia in 2018 have been aware of the internet, it is used as an online transaction with an average of 3.19 million rupiahs per person and predicted to keep developing (APJII, 2019)
The Error Correction Model (ECM) model concluded valid when error correction sign (ECT) is negative and statistically significant (Widarjono, 2010).From Table 1, the ECT value is significant α = 5% with a coefficient value of -0.747438, which means that the ECM model could correct imbalances of the short-run into the long-run balance of 74.7%
Summary
The infiltration of advanced technology era in communication and information, especially the internet, has a broad impact in various fields, including economics. Layanan Keuangan Digital (LKD) regulated in Peraturan Bank Indonesia Nomor 20/6 / PBI / 2018 concerning electronic money. According to Bank Indonesia, electronic money is a nonphysical payment method for traders or merchants, not digital money publishers which the money value saved in servers and chips (Bank Indonesia, 2020). Aside from the flexibility in transactions, indirectly, people participate in promoting Bank Indonesia's program on cashless society. People in Indonesia fond of using e-money, ATM cards, debit cards, credit cards, so every year there is increment transaction volume (Ritonga, 2018). In 2009, Bank Indonesia issued Peraturan Bank Indonesia Nomor: 11/12 / PBI / 2009, it contained regulations about electronic money
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