Payment Behavior Research Articles

Effects of gentrification on homeowners: Evidence from a natural experiment

A major overhaul of the property tax system in 2013 in the City of Philadelphia has generated significant variations in the amount of property taxes across properties. This exogenous policy shock provides a unique opportunity to identify the causal effects of gentrification, which is often accompanied by increased property values, on homeowners’ tax payment behavior and residential mobility. The analysis, based on a difference-in-differences framework, suggests that gentrification leads to a higher risk of delinquency on homeowners’ tax bills on average, but there was no sign of a large-scale departure of elderly or long-term homeowners in gentrifying neighborhoods within five years after adoption of the new policy. While tax delinquencies were somewhat inflated by appeals for reassessments, programs designed to provide tax relief for long-term homeowners help mitigate the risk of tax delinquencies and displacement. Findings from this study help researchers, policymakers, and practitioners better understand the mechanisms through which gentrification may impact long-term homeowners and the effectiveness of policies to mitigate these tax burdens and displacement.

Determinants of Repayment among Male and Female Microcredit Clients in the USA. An Approach Based on Managers’ Perceptions

Research on microfinance institutions (MFIs) has normally been focused on developing and emerging markets. However, an analysis of developed countries is also important for foreign MFIs wishing to take advantage of the growth potential of those markets. Therefore, the aim of this article is to determine whether MFIs working in the USA’s market should change or adapt their microcredit policies with respect to women. In effect, there are no studies in the USA supporting the argument that women are a better risk of microcredit than men, or that there are differences in microcredit repayment behavior between women and men. Additionally, it was investigated if the payment behavior of women and men is related to variables such as their age, ethnicity, academic level, marital status, or the characteristics of the microcredits, like purposes, amounts, and payment terms. In the USA, there are not—as in other countries—strong incentives, motivations, or external pressures, other than those that men also have, which influence women to pay their microloans better than men. Then, domestic and international MFIs attracted to enter the USA’s market should review their microcredit policies in relation to women. More research is needed about the microfinance market in the USA.

Pandemic payment patterns

COVID-19 has temporarily changed the relative cost and benefits of different payment methods: cash has become more costly in terms of health risks, ease of use and likelihood of acceptance, whereas debit card usage has become less costly. As a result, consumers have shifted away from cash. For some, this may speed up the adoption of electronic payment methods, resulting in a permanent change in payment behaviour. Others will return to their preferred payment method once the influence of COVID-19 on our health and daily lives has faded away. Based on unique payment diary survey data collected among a representative panel of Dutch consumers, we study the shift in payment behaviour and payment preferences during the first phase of the COVID-19 pandemic. Since the start of the lockdown in the Netherlands the likelihood of debit card usage at the expense of cash has increased by 13 percentage points. About 60 percent of this shift has persisted seven months after the start of the pandemic in the Netherlands and appears to be longlived. Also, the pandemic has resulted in a shift in payment preferences towards more contactless payments. Both effects are largest for elderly people.

Pattern recognition of financial institutions’ payment behavior

Abstract We present a general supervised machine-learning methodology to represent the payment behavior of financial institutions starting from a database of transactions in the Colombian large-value payment system. The methodology learns a feedforward artificial neural network parameterization to represent the payment patterns through 113 features corresponding to financial institutions’ contribution to payments, funding habits, payment timing, payment concentration, centrality in the payment network, and systemic effects due to failure to pay. We then use the representation to compare the coherence of out-of-sample payment patterns of the same institution to its characteristic patterns. The performance is remarkable, with an out-of-sample classification error around three percent. The performance is robust to reductions in the number of features by unsupervised feature selection. In addition, we confirm that network centrality and systemic effect features definitively contribute to enhancing the performance of the methodology. For financial authorities, this is a major step towards the automated detection of individual financial institutions’ anomalous behaviors in payment systems.

Pandemic Payment Patterns

COVID-19 has temporarily changed the relative cost and benefits of different payment methods: cash has become more costly in terms of health risks, ease of use and likelihood of acceptance, whereas debit card usage has become less costly. As a result, consumers have shifted away from cash. For some, this may speed up the adoption of electronic payment methods, resulting in a permanent change in payment behaviour. Others will return to their preferred payment method once the influence of COVID-19 on our health and daily lives has faded away. Based on unique payment diary survey data collected among a representative panel of Dutch consumers, we study the shift in payment behaviour and payment preferences during the first phase of the COVID-19 pandemic. Since the start of the lockdown in the Netherlands the likelihood of debit card usage at the expense of cash has increased by 13 percentage points. About 60 percent of this shift has persisted seven months after the start of the pandemic in the Netherlands and appears to be long-lived. Also, the pandemic has resulted in a shift in payment preferences towards more contactless payments. Both effects are largest for elderly people.

Late Payments, Liquidity Constraints and the Mismatch between Due Dates and Paydays

This paper examines a small random liquidity shock to reveal the effect of liquidity constraints on late payment behavior. In Jerusalem, water bill due dates are randomly determined and therefore may occur just before or after social security paydays. We compared the likelihood of late payments by low-income households when they receive their social benefits a day after the water bill due date to the likelihood of late payment by the same households when they receive their benefits a day or more before the water bill due date. Using a large administrative data set, we found that a small random liquidity shock leads to a substantial increase in late payments of more than 10 percentage points among income support recipients and around 6 percentage points for old-age pension recipients with supplementary income. The mismatch between utility payment due dates and paydays may result in reduced psychological well-being, as well as interest charges and high late fees, contributing to the poverty penalty.

Sentiment analysis on customer satisfaction of digital payment in Indonesia: A comparative study using KNN and Naïve Bayes

Indonesia payment behaviour has turned from traditional to digital as the impact of the technology growth. Digital payment usage in Indonesia have increased rapidly in recent years. Many companies offer this service with different terms and tariff options. Social media is one of the places where people can express their feeling and opinion, including Twitter. In this research, sentiment analysis and opinion mining is conducted to see public satisfaction towards the digital payment service in Indonesia (OVO, GO-PAY and LinkAja). This research is using Twitter data and has several stages, which are data crawling from Twitter, data cleaning, feature selection and classification using two machine learning approach (Naïve bayes classifier and K-Nearest Neighbour or KNN). The raw data is processed to get the clean data, and to get the appropriate feature for classification algorithm and then perform classification and validation to the model. As for the classification algorithm, this research finds out that KNN has better accuracy than Naive Bayes. The result of this research also shows that LinkAja and G0-PAY has more neutral sentiment or customers nearly satisfied of the services provided, and OVO has more negative sentiment than neutral sentiment

인터넷 개인방송의 지불 행위에 영향을 미치는 요인에 관한 연구: 중국 1인 방송의 이용자 개인 특성, BJ의 특성, 그리고 플랫폼 특성을 중심으로

본 연구는 어떠한 변인들이 인터넷 개인방송 이용자들의 별풍선 지불행위에 영향을 미치는지에 대해서 알아보고자 한다. 구체적으로 시청자 개인의 특성, BJ의 특성 그리고 플랫폼의 특성이 인터넷 개인방송 이용자들의 별풍선 구매빈도와 구매액수에 어떻게 영향을 끼치는지 살펴보았다. 이를 위해 인터넷 개인방송을 시청하는 중국인들을 대상으로 온라인 설문조사를 실시했다.<BR> 분석 결과, 개인의 심리적 특성 중 동조성이—즉, 다른 시청자의 별풍선 구매행위를 보고 이에 동조하고 싶을수록— 지불행위와 긍정적인 관계를 가지는 것으로 나타났다. 시청자가 느끼는 BJ의 전문성, 매력, 커뮤니케이션 능력, 유머감각 등 네 가지 BJ의 특성모두 별풍선 지불행위와 유의미한 관계를 가지지 않는 것으로 밝혀졌다. 플랫폼의 특성 요인 중에서는 BJ와의 상호작용과 HCI 유용성이 지불행위에 통계적으로 유의미한 관계를 가지는 것으로 밝혀졌다. 요약하자면, 동조성이 높고 BJ와 상호작용성이 높을수록, 지각된 HCI 유용성이 높을수록, 이용자는 별풍선을 더 자주, 더 많이 구매하는 것으로 나타났다.<BR> 각 요인의 영향력을 순서대로 나열하면 월(月)구매빈도에 대해서는 동조성, BJ와 상호작용성, HCI 유용성 순으로 나타났으며, 구매액수에 대한 영향력은 동조성, HCI 유용성, BJ와 상호작용성 순으로 나타났다. 두 결과 모두 동조성이 가장 큰 영향을 미치고 있고, 월구매빈도에는 BJ와 상호작용성이 HCI 유용성보다 영향력이 더 크지만, 구매액수에는 HCI 유용성이 BJ와 상호작용성보다 영향력이 더 큰 것으로 밝혀졌다.

Understanding social housing tenants' rent payment behaviour: evidence from Great Britain

The Governments of many Western countries have been increasingly concerned with influencing the behaviour of their citizens. One way that they have done this is by giving them new responsibilities. In the UK, an example of this is ‘direct payment' which sees social housing tenants in receipt of income-related housing allowance (‘Housing Benefit') assuming responsibility for paying their rent. Drawing on a comprehensive data-set generated by the direct payment pilot evaluation, this paper examines tenants' rent payment behaviour. It draws on a conceptual framework from behavioural science - COM-B - which presents behaviour (B) as a result of the interaction between the capabilities (C) of subjects, the opportunity (O) they have to enact behaviours, and their motivation (M). Tenants' behaviour was influenced by all elements of the model, with it being more than just a consequence of opportunity, and their financial circumstances, specifically, although it was the most important one.

User Mobile Payment Behavior Using Technology Acceptance Model (TAM): Study of "Dana" E-Wallet Users

This study aims to determine the effect perceived usefulness on Mobile Payment and perceived ease of use. This research uses a quantitative approach with a questionnaire data collection tool. Population of this study is the graduate students of the Universitas Pendidikan Indonesia with a total sample of 100 students, a quota sampling method applied. Hypotheses of “DANA” application analyzed by using multiple regression analysis. The findings in this study indicate that perceived easefulness and perceived ease of use had a positive and significant effect on mobile payment.

Nudging businesses to pay their taxes: Does timing matter?

This paper provides empirical evidence on the implications of the timing of reminders by studying the effect of varying the timing of reminder letters to taxpayers on their payment behavior. The collection of unpaid tax debts constitutes a considerable challenge for tax authorities. We discuss potential mechanisms through which reminders may affect taxpayers’ behavior and study the payment behavior of business taxpayers in a field experiment in Australia. We find that a simple reminder letter increases the probability of payment by about 25 percentage points relative to a control group that does not receive a letter from the tax authority. However, variation over a three-week period in the timing of the reminder letter has no effect on the probability of payment within seven weeks of the due date. Our findings indicate that sending reminders early results in faster payment of debts with no effect on the ultimate probability of payment.

How Do Usage and Payment Behavior Interact in Rent‐to‐Own Business Models? Evidence from Developing Economies

The diffusion of technological innovations in developing economies has been facilitated by the use of rent‐to‐own business models, which give flexibility to customers by allowing them to make incremental payments over time. Understanding the implications of this flexibility is a fundamental problem for an increasing number of firms operating in these markets. In this study, we empirically analyze how consumer usage and payment behaviors interact in an application of rent‐to‐own to the distribution of solar lamps in developing countries. By exploiting the longitudinal variation in the data—and hence accounting for intrinsic differences between customers—the analysis led to three main insights. First, higher usage rates lowered the probability of late payments by customers. Our characterization of this engagement effect enhances existing knowledge of the drivers of payment behavior in these environments. Second, customers often “bundled” payments, making advance payments for future product access. We showed that bundling the initial payment led to lower usage rates ( bundling effect), suggesting that firms may not benefit from advance payments upfront, and that they should closely track usage patterns from these customers. Finally, we showed that first‐period usage information can improve the accuracy of predictive models of default and that observing usage rates in subsequent periods does not lead to further improvements. Overall, the analysis highlights the importance for firms of jointly tracking and analyzing payment and usage behavior by customers, particularly in initial stages of the adoption process.

Modeling Consumers’ Payment Behavior Towards Contactless Cards

Mobile payment technologies have led the development of an open and collaborative payment ecosystem, where financial institutions and merchants have provided innovative solutions to conduct business with consumers. One of these new evolving payment alternatives is contactless card that incorporates near field communication technology, enabling consumers to make everyday purchases quickly and safely especially for low-value transactions. Based on the technology acceptance model, innovation diffusion theory, and the relevant literature, nine variables - perceived usefulness, perceived ease of use, trust, convenience, social influence, compatibility, anxiety, security and innovativeness - are proposed to help predict consumers' behavioural intention to pay by a contactless card. The results and implications of our study contribute to an expanded understanding of the factors that influence consumers' behaviour towards their use and provide valuable information to all involved parties - individuals, merchants and financial institutions - about how consumers perceive this technology.

Responses to an anticipated increase in cash on hand: Evidence from term loan repayments

Abstract I use account-level credit card and term loan data to analyze consumers’ responses to anticipated increases in cash on hand following term loan run-offs. Financial constraints are elicited using past credit card payment behavior and can explain the response of credit card but not term loan expenditure: unconstrained consumers are 23% more likely to finance new durable goods with term loans after the run-off. The results provide evidence of consumers engaging in sequential term loan borrowing.

Payment Behaviour to Municipal Service Provision in Bangladesh

The paper investigates the factors which are believed to influence the behaviour of households' willingness to pay for public services provided by municipal authorities in Bangladesh. The underlying concern of the analysis is a deeper understanding of the factors that are important for revenue mobilisation strategies in the municipalities of Bangladesh. The analysis is based on a survey of over six thousand households across all municipalities of Bangladesh, complemented with administrative data obtained from these local entities. A multinomial logit model is fitted. The model specification groups the household payment responses into three categories, i.e., willing to pay, reluctant to pay and opposed to paying the service charges while controlling for economic, social and demographic factors. The econometric model is estimated for each of three public services, i.e., water supply, solid waste management and street lighting facility, separately. The results indicate that household willingness to pay is significantly affected by factors such as service charge, income, education and the municipal classification. An important policy insight is that service charge increases and other factors noted above can be important in strategies for local revenue mobilisation.

Microfinance institutions in the USA: the glocalization of microcredit policies in relation to gender

The aim of this research was to inquire if foreign microfinance institutions (MFIs), interested in entering the US microfinance market because of its location advantages, should glocalize their microcredit policies. Research found that women in the USA are a no better risk for microcredit than men, and there are no differences in the repayment of microloans between men and women. The payment behaviour of women and men related to certain specific variables was also investigated. A survey sent to 203 MFIs was used, to which 17.73 per cent responded. Findings show that, in the USA, there are no strong incentives, motivations or external pressures which influence women to pay microcredits better than men. Therefore, international MFIs entering the USA should glocalize their microcredit policies in relation to women as well as their product design and policies for granting microloans.

Cash or Card? Unravelling the Role of Socio-Psychological Factors

We build a model of consumers’ payment behaviour that includes socio-psychological factors and test it empirically by focussing on the choice between cash and electronic payments in the Netherlands. Our model outperforms the traditional model used to explain payment usage. Moreover, we provide useful insights for those who want to understand and steer payment behaviour. How consumers actually pay mainly depends on how they intend to pay and their payment habits. Attitudes, feelings and perceived best-suited payment behaviour are key factors related to payment intentions. Social norms and perceived control over the payment instrument choice matter too.

소비성향, 모바일 간편 결제서비스 선택속성과 행동의도에 관한 실증적 연구 : 중국 소비자 중심으로

오늘날 모바일 간편 결제는 스마트 폰, 아이패드와 같은 모바일 장치를 통해 비즈니스 및 금융기관에서 지불 서비스를 제공하는 데 가장 자주 사용되는 방법 중 하나가 되고 있다. 이러한 배경 바탕으로 본 연구는 모바일 간편 결제서비스 이용하는 소비자의 소비성향에 대한 구성요인이 모바일 간편 결제 서비스의 선택속성에 미치는 영향을 분석하고자 한다. 여기에서 소비성향은 계획적, 충동적, 과시적 그리고 타인의식적으로 구분하여 모바일 간편 결제 서비스의 선택속성을 실증 분석하고자 한다. 소비성향을 분석하여 어떤 요인이 모바일 간편 결제 서비스의 선택속성에 유의한 영향을 미치는 지를 파악하고 난 후, 모바일 간편 결제 서비스의 선택속성이 행동의도에 미치는 영향을 분석하고자 한다.BR 본 연구의 실증적 결과는 소비성향에서 제안하는 네 변수인 계획적, 충동적, 과시적 그리고 타인의식적 소비성향이 모바일 간편 결제 서비스의 선택속성에 미치는 영향에서 긍정적인 영향을 미친 것으로 검증하였으며, 모바일 간편 결제 서비스의 선택속성은 행동의도에 긍정적인 영향을 미친 것으로 나타났다. 이러한 연구의 검증결과를 토대로 모바일 간편 결제 서비스를 이용하는 소비자의 소비성향의 학문적 발전을 도모하는 차원의 이론적 시사점과 모바일 간편 결제 산업의 활성화 방안 등의 기초자료로 활용될 수 있는 차원의 실무적 시사점을 제공하였다.

Factors affecting consumers’ mobile payment behavior: a meta-analysis

Mobile payment is quickly changing consumers’ spending patterns and payment habits. Many empirical studies have been conducted globally in the last decade about consumers’ mobile payment behavior. To analyze and synthesize the findings, a meta-analysis is conducted to build consensus about what factors significantly affect consumers’ mobile payment behavior. Overall, it is found that there is a high level of consensus among researchers that these factors, including perceived usefulness, perceived risk, social influence, trust and perceived ease of use, have significant impact over consumers’ intention to use mobile payment. While our meta-analysis supports most findings revealed in previous studies, there are also findings that cannot be supported. In addition, the place where consumers live is identified as a new factor that could potentially affect consumers mobile payment behavior. The practical significance of the current study is that consumers’ spending habit is difficult to change but can be adapted through careful design and awareness training around these significant factors. To encourage consumers’ adoption of mobile payment, especially in Western countries like US, the factors such as perceived usefulness, perceived risk, social influence, trust and perceived ease of use must be carefully considered and incorporated into mobile payment products and marketing campaigns.

The effect of promotional interest rates on customer borrowing and payment behavior in the credit card industry

Credit card companies typically offer limited-time teaser interest rates [also known as promotional annual percentage rates (APRs)] to attract new customers. Firms hope that the promotional APRs will encourage consumers not only to open accounts, but also to transfer balances from other credit cards, revolve credit card balances, or take cash advances, each of which would lead to an increase in the firm’s profit. It is important to understand the effect of the promotional rates on customer behavior. Important research questions include: Does the lure of a low APR increase indebtedness of a customer over the short run and the long run? Between two segments—needy and opportunistic customers—which group is more likely to take advantage of the offer? A related important question for firms is whether the low APRs increase the financial risk (i.e., probability of delinquency or the probability of default of a customer) thus imposing costs of monitoring and balance recovery on the firm. Given the limited published research on these topics, we take a closer look at some of the behavioral patterns associated with the offer of promotional APRs in this study.