Research Details

Abstract

Do coordination failures constrain financial technology adoption? Exploiting the Mexican government's rollout of one million debit cards to poor households from 2009-2012, I examine responses on both sides of the market, and find important spillovers and distributional impacts. On the supply side, small retail firms adopted point-of-sale terminals to accept card payments. On the demand side, this led to a 21% increase in other consumers' card adoption. The supply-side technology adoption response had positive effects on both richer consumers and small retail firms: richer consumers shifted 13% of their supermarket consumption to small retailers, whose sales and profits increased.

Type

Article

Author(s)

Sean Kendrick Higgins

Date Published

2022

Citations

Higgins, Sean Kendrick. 2022. Financial Technology Adoption: Network Externalities of Cashless Payments in Mexico. American Economic Review.