The Impact of Mobile Payment Channel on Consumer Consumption: Evidence from Alipay

Yuqian Xu, Anindya Ghose, Binqing Xiao

Research output: Working paper


The rapid development of mobile technology has introduced a new channel for consumer consumption, in addition to traditional online PC and offline (physical card) payment channels. In this paper, we investigate how the mobile payment channel affects other traditional consumption channels. We utilize a unique data set from one of the largest banks in China, which contains the consumer credit card consumption from PC, offline, and mobile payment channels. The mobile payment channel under study here is from Alipay, which is now the world's largest mobile payment platform. In our work, we exploit a natural experiment through the Alipay channel adoption to study our results. We show the total transaction amount increases by around 2.4% after the Alipay adoption, and the total transaction frequency increases by around 23.5%. Furthermore, the estimation results indicate the Alipay channel acts as a substitute for the offline channel, and as a complement for the PC payment channel. More specifically, for the PC payment channel, the total transaction amount increases by around 0.3% after the Alipay adoption. On the other hand, for the physical card channel, the total transaction amount decreases by around 3.9% after the Alipay adoption. We explore the mechanisms behind the Alipay adoption and find two important determinants, namely, service demand and channel ubiquity. Furthermore, we find the adoption of the mobile payment channel would be associated with hedonic shopping motivations, and we show the impact of mobile channel adoption on product acquisition.
Original languageEnglish (US)
Number of pages35
StatePublished - Oct 21 2018


  • Alipay
  • difference-in-difference
  • matching
  • mobile payment
  • channel
  • PC
  • offline
  • credit card
  • natural experiment


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