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Abstract
The availability of digital payment technologies has rapidly increased in the developing world as a cornerstone for financial inclusion. Despite significant efforts to promote digital payments, rates of adoption remain modest in some low-income countries, particularly India. We consider possible reasons for the low rates of adoption among merchants in Jaipur, India with small fixed-location store enterprises. Using survey data for 1,003 merchants, we find little evidence that supply-side barriers to obtaining necessary infrastructure or meeting prerequisite requirements to adopt digital payments explain the low level of adoption. Merchants can readily obtain the necessary infrastructure: 98.6% are feasible adopters, 97% have bank accounts, 79% possess internet-capable devices, and 96% demonstrate technological literacy. 54% already satisfy all requirements, yet only 42% have adopted digital payments. Our evidence suggests that low rates of adoption do not appear to be the result of supply-side barriers, but are due rather to demand-side factors, including insufficient customer demand and concerns that transaction records could increase tax liability.
BibTeX
@Article{ ligon-etal19,
author = {Ethan Ligon and Badal Malick and Ketki Sheth and Carly
Trachtman},
title = {What Explains Low Adoption of Digital Payment
Technologies? {Evidence} from Small-Scale Merchants in
{Jaipur}, {India}},
journal = {PLoS One},
year = 2019,
volume = 14,
number = 7,
pages = {e0219450},
doi = {10.1371/journal.pone.0219450}
}