The adoption and use of mobile payment: Determinants and relationship with bank access☆

This study aims to answer two questions: What determines the adoption and use of mobile payment? What is the relationship between mobile payment and access to traditional bank services? By using representative survey data in rural China, we apply a hurdle model with 2SLS and find that consumers with better access to bank services are more likely to adopt mobile payment. However, after adoption, the less often the consumers visit banks because of distance or social constraints, the more they use mobile payment to complement bank services. Younger, better educated households with higher income and more smart phones are more likely to adopt and use mobile payment. Among these characteristics, age has the largest marginal effect while income has the least. Households in the agricultural sector are least likely to adopt and use mobile payment. We also find that awareness of neighbors' use of non-cash payment has a substantial positive effect.