Abstract
The protection of financial personal data has become a major concern for Internet users in the digital economy. This paper investigates whether the consumers’ use of non-bank payment instruments that preserve financial privacy from banks and relatives may increase their online purchases. We analyze the purchasing decisions and the use of bank and non-bank payment instruments of a representative sample of French Internet consumers in 2015. Using two econometric methods, namely a two-step regression and a Bayesian Markov Chain Monte Carlo model to account for a potential endogeneity problem, we find evidence that the use of a non-bank payment instrument positively influences consumers’ online purchases.
Acknowledgment:
We are very grateful for the support provided by ACSEL and Caisse des Dépôts. We benefited from the comments of participants to several conferences and workshops: University of Paris-Sud (2015), De Nederlandsche Bank (2016), University of Nice (2016), and Carnegie Mellon University (2016). We would like to thank Marvin Sirbu for his comments on an earlier draft of this paper.
Appendix: descriptive statistics
Statistics – Binary Variables.
| n | Mean | SD | Min | Max | |
|---|---|---|---|---|---|
| Payment instruments | |||||
| Use of non-bank payment instruments | 811 | 0.453 | 0.017 | 0 | 1 |
| Convenience and efficacy | |||||
| Financial information stored on electronic commerce websites | 811 | 0.449 | 0.498 | 0 | 1 |
| Risk | |||||
| Perceived risk of banking details being hacked on electronic commerce websites | 1000 | 0.860 | 0.347 | 0 | 1 |
| Perceived risk of banking details being consulted by third parties on online banking websites | 1000 | 0.458 | 0.498 | 0 | 1 |
| Online activity | |||||
| Using Internet several times every day | 1000 | 0.641 | 0.480 | 0 | 1 |
| More than 10 passwords | 1000 | 0.170 | 0.376 | 0 | 1 |
| Average monthly spending in electronic commerce inferior to euro 50 | 723 | 0.408 | 0.492 | 0 | 1 |
| Average monthly spending in electronic commerce between euro 50 and euro 250 | 723 | 0.519 | 0.500 | 0 | 1 |
| Individual variables | |||||
| Having children | 1000 | 0.262 | 0.440 | 0 | 1 |
| Lower socioeconomic classification | 1000 | 0.294 | 0.456 | 0 | 1 |
| Inactives | 1000 | 0.40 | 0.49 | 0 | 1 |
| Being between 15 and 24 years old | 1000 | 0.182 | 0.386 | 0 | 1 |
| Being between 25 and 34 years old | 1000 | 0.159 | 0.366 | 0 | 1 |
| Being more than 50 years old | 1000 | 0.397 | 0.490 | 0 | 1 |
| Instruments | |||||
| Willingness to disclose personal information to the bank | 1000 | 0.042 | 0.006 | 0 | 1 |
| Use of privacy web browser extensions and deleting cookies | 1000 | 0.713 | 0.014 | 0 | 1 |
Statistics – Frequency of Purchase.
| Less often than once per month=1 | More than once per month=2 | Once per week=3 | Several times per week=4 | n | Mean | SD |
|---|---|---|---|---|---|---|
| 316 | 394 | 72 | 29 | 811 | 1.77 | 0.75 |
Statistics – Number of Payment Instruments.
| One=1 | Two=2 | Three or more=3 | n | Mean | SD |
|---|---|---|---|---|---|
| 316 | 394 | 72 | 811 | 1.77 | 0.75 |
Statistics – Education.
| No diploma=1 | High school diploma=2 | Undergraduate and graduate studies=3 | n | Mean | SD |
|---|---|---|---|---|---|
| 231 | 253 | 516 | 1000 | 2.285 | 0.82 |
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