The growth of mobile payment and effect on consumption via cash and bankcard

摘要

The growth of mobile-payment system is skyrocketing at an astounding rate as a result of prevalence of Mobile payment apps such as Alipay, We Chat Payment, Lakala etc. 6 dominant factors in the growth of Mobile market are analyzed and a Modified Multiple Regression Model is proposed to find out the main cause of booming Mobile Payment market and to predict the growth trend of the market in the near future. Principal Component Regression approach was applied to solve Multiple Nonlinearity by eliminating overlapped components. T-test was used to re-add the most casual-related components. Then, the modified regression function was tested by F-test. Based on quarterly data sources from 2012Qx to 2014Q4, the function shows that the development of technology is the most remarkable cause in the growth of Mobile payment market. The amount of smart phone in use will increase by 2.2 billion from 2014Q4 to 2015Q4 and consumption via Mobile Payment will at least increase by 910 billion Yuan under my estimate. Furthermore, to evaluate how Mobile Payment Market affects the traditional Payment system, circulation rate of cash and penetration of bankcards are selected, an econometric model is proposed, Unit root test, Granger causality test and Co-integration analysis are applied to test the relationship between Mobile Payment market and consumption via cash and bankcards. Statistic data from the People's Bank of China and Analysis are used to do the empirical study. The result indicates that long-term stationary and causality exist among Mobile payment and consumption via cash and bankcards. Mobile payment had the obvious substitution effect to the traditional currency and bankcards, lowered the circulation of currency from 17.66% to 17.42% and slowed the growth of consumption via bankcards. The growth rate declines from 2.2% to 0%. So the Mobile Payment is essentially flexible and low-cost, which brings the maximum profit to both merchants and consumers. The intrinsic nature of- the Mobile Payment mode is to upgrade currency system, lower its liquidity and boost its revenue. To be more accurate, it is the advance of technology that accelerates the upgrade of currency system. The Mobile payment serves as a means for booming e-commerce. The development of e-commerce depends largely on the innovation of technology. It can be expected the development of technology, will further enlarge e-commerce market, thus has brought the unprecedented challenge for the traditional finance approaches.