Gauging the impact of payment system innovations on financial intermediation: novel empirical evidence from Indonesia

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dc.contributor.authorLubis, Alexander
dc.contributor.authorAlexiou, Constantinos
dc.contributor.authorNellis, Joseph G.
dc.date.accessioned2019-12-04T15:48:26Z
dc.date.available2019-12-04T15:48:26Z
dc.date.issued2019-06-18
dc.description.abstractIn this paper, the relationship between innovations in the payment systems and financial intermediation is explored. By focusing on excess reserves and currency demand we provide evidence on the extant transmission mechanism. In this direction, a Generalised Method of Moments (GMM) and Vector Error Correction Model (VECM) techniques are applied to a dataset collated for Indonesia. We find that the financial intermediation is affected by currency demand whilst we observe a limited role of excess reserves in affecting financial intermediation. Credit card payments are found to have a statistically significant effect on currency demand, whereas debit card payments only influence the financial intermediation in the long-run. In addition, the Real Time Gross Settlement (RTGS) exerts an upward pressure on excess reserves. The findings are of great importance as they provide support to policies that favour payment migration to an electronic platform, particularly that of card-based payment systems.en_UK
dc.identifier.citationLubis A, Alexiou C, Nellis JG. Gauging the impact of payment system innovations on financial intermediation: novel empirical evidence from Indonesia. Volume 18, Issue 3, June 2019, pp. 290-338en_UK
dc.identifier.issn0972-6527
dc.identifier.urihppts://doi.org/10.1177/0972652719846312
dc.identifier.urihttp://dspace.lib.cranfield.ac.uk/handle/1826/14797
dc.language.isoenen_UK
dc.publisherSAGEen_UK
dc.rightsAttribution-NonCommercial 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by-nc/4.0/*
dc.subjectpayment systemsen_UK
dc.subjectfinancial intermediationen_UK
dc.subjectexcess reservesen_UK
dc.subjectcurrency demanden_UK
dc.subjectmonetary policyen_UK
dc.titleGauging the impact of payment system innovations on financial intermediation: novel empirical evidence from Indonesiaen_UK
dc.typeArticleen_UK

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