“Demographics and Technology Diffusion: Evidence from Mobile Payments” (paper)

coauthors Nicolas Crouzet (Northwestern), Pulak Ghosh (India Inst. of Mgmt) and Filippo Mezzanotti (Northwestern)

Discussed by: Boris Vallee (HBS)

Abstract

Using data on the adoption of mobile payment systems in India, we argue that the age composition of the population can impact the diffusion of new technologies. Evidence from a leading Indian bank shows that younger adults tend to prefer mobile payments over traditional cards. In a model of technology adoption, these age-driven differences in attitudes toward technology create stronger adoption incentives for businesses facing younger consumers. We validate this prediction using store-level data on mobile payment adoption by merchants. Our findings suggest that demographics can pose an obstacle to the diffusion of financial innovation.

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