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Licensed Unlicensed Requires Authentication Published by De Gruyter September 11, 2017

Payment Instruments, Financial Privacy and Online Purchases

  • Yann Balgobin , David Bounie EMAIL logo , Martin Quinn and Patrick Waelbroeck


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.

JEL Classification: G21; G23; L81; L86


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

Table A1:

Statistics – Binary Variables.

Payment instruments
 Use of non-bank payment instruments8110.4530.01701
Convenience and efficacy
 Financial information stored on electronic commerce websites8110.4490.49801
 Perceived risk of banking details being hacked on electronic commerce websites10000.8600.34701
 Perceived risk of banking details being consulted by third parties on online banking websites10000.4580.49801
Online activity
 Using Internet several times every day10000.6410.48001
 More than 10 passwords10000.1700.37601
 Average monthly spending in electronic commerce inferior to euro 507230.4080.49201
 Average monthly spending in electronic commerce between euro 50 and euro 2507230.5190.50001
Individual variables
 Having children10000.2620.44001
 Lower socioeconomic classification10000.2940.45601
 Being between 15 and 24 years old10000.1820.38601
 Being between 25 and 34 years old10000.1590.36601
 Being more than 50 years old10000.3970.49001
 Willingness to disclose personal information to the bank10000.0420.00601
 Use of privacy web browser extensions and deleting cookies10000.7130.01401
Table A2:

Statistics – Frequency of Purchase.

Less often than once per month=1More than once per month=2Once per week=3Several times per week=4nMeanSD
Table A3:

Statistics – Number of Payment Instruments.

One=1Two=2Three or more=3nMeanSD
Table A4:

Statistics – Education.

No diploma=1High school diploma=2Undergraduate and graduate studies=3nMeanSD


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Published Online: 2017-9-11
Published in Print: 2016-9-26

©2016 Walter de Gruyter GmbH, Berlin/Boston

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