IMPROVING THE LEVEL OF ECONOMIC EFFECTIVENESS OF ELECTRONIC PAYMENT SERVICES IN A GLOBAL DIGITAL ECONOMY
##plugins.themes.bootstrap3.article.main##
##plugins.themes.bootstrap3.article.sidebar##
Abstract
Digitalization ensured a revolutionary change in the ways of delivering and consuming financial services, in particular payment services. One of the key prerequisites for the sustainable operation and development of e-payment systems is the achievement of a high level of effectiveness of e-payment services (EPS), which occurs in the global context of building a digital economy. The goal of the research is to develop the conceptual framework and identify the key areas for improving the economic effectiveness of e-payment services in a global digital economy. The theoretical framework of the research includes: the best practices in the sphere of digital technology, digitalization and digital transformations; a concept of digital economy, determining its structure, technological “core” and contours, and functional features. An enhanced role of the Internet as a general economic infrastructure, being the key for the global quality of digital economy, has been taken into consideration. The methodology of the research is based on an evolutionary approach and includes: historical, systemic and structural, functional, and comparative analysis. The results of the research are represented by a number of theoretical, conceptual and practical provisions. Above all, the essence of FinTech was clarified and the key areas of its development were identified; the crucial importance of the problem of economic effectiveness for this sphere of digital technology was substantiated. The paper identified the essence and specific features of PayTech, which transformed the ways to carry out payment transactions and provide the respective services. The purpose and key components of e-payment systems were clarified as well as the specific features to ensure EPS in various aspects. The attention was drawn to the issues of effective EPS in terms of the provider (related to ensuring mass retail payments using Internet and mobile technologies). Taking into consideration different description models of payment operation, the emphasis was laid on the technological model and functionality of e-payment systems, which demonstrated an integrated approach to achieving the high quality and effectiveness of EPS. Taking into account the external and internal prerequisites to accomplish this, the following strategic areas for improving the economic effectiveness of EPS were identified: 1) enhancing the risk management quality; 2) innovation development; 3) development of the ecosystem of EPS delivery. Every area was clarified in terms of its critical importance, relation to strategic management and marketing, which enables to advance the methodology of creating new e-payment systems or improve the existing ones. Practical recommendations on the intensification of e-payment systems include: governmental support activities for EPS providers; proposals on enhancing the innovative function of regulatory “sandboxes” and expanding the use of the technologies which ensure the compliance with regulatory standards (SupTech and RegTech). Value/originality: the paper specified and identified the focus areas and activities to improve the economic effectiveness of EPS delivery, which is of strategic importance in the global digital economy, being of particular value for future studies.
How to Cite
##plugins.themes.bootstrap3.article.details##
digital technologies, digital economy, globalization, electronic payment systems, electronic payment services, effectiveness
Milian, E.Z., Spinola, M. de. M., & De Carvalho, M.M. (2019). FinTechs: A literature review and research agenda. Applications, 34, Article 100833. https://doi.org/10.1016/j.elerap.2019.100833.
Zekos, G.I. (2021) E-Globalization and Digital Economy. In: Economics and Law of Artificial Intelligence (pp. 13-66). Springer, Cham. https://doi.org/10.1007/978-3-030-64254-9_2.
Hill, J. (2018). Chapter 14 – FinTech in a Global Setting. In: FinTech and the Remaking of Financial Institutions (pp. 269-283). Academic Press, Elsevier Inc. https://doi.org/10.1016/B978-0-12-813497-9.00014-7.
Manta, O.P. (2021). Financial Technologies (FinTech), Instruments, Mechanisms, and Financial Products in the Current Context of Artificial Intelligence and Globalization. In: Y. A. Albastaki, A. Razzaque, A. M. Sarea (Eds.), Innovative Strategies for Implementing FinTech in Banking (pp. 22-45). https://doi.org/10.4018/978-1-7998-3257-7.ch002.
Schueffel, P. (2016). Taming the Beast: A Scientific Definition of FinTech. Journal of Innovation Management, 4, 32-54. https://doi.org/10.2139/ssrn.3097312.
Knewtson, H., & Rosenbaum, Z. A. (2020). Toward understanding FinTech and its industry. Managerial Finance, 46(8), 1043-1060. http://doi.org/10.1108/MF-01-2020-0024.
Bollaert, H., Lopez-de-Silanes, F., & Schwienbacher, A. (2021). FinTech and access to finance. Journal of Corporate Finance, 68, Article 101941. https://doi.org/10.1016/j.jcorpfin.2021.101941.
Hill, J. (2018). Chapter 17 – They are Not Dead Yet: How Big Financial Institutions Will Work with FinTech Startups to Define the Market Structure of the Future. In: FinTech and the Remaking of Financial Institutions (pp. 331-351). Academic Press, Elsevier Inc. https://doi.org/10.1016/B978-0-12-813497-9.00017-2.
Wang, Y., Xiuping, S., & Zhang, Q. (2021). Can FinTech improve the efficiency of commercial banks? – An analysis based on big data. Research in International Business and Finance, 55, Article 101338. https://doi.org/10.1016/j.ribaf.2020.101338.
Thankor, A.V. (2020). FinTech and banking: What do we know? Journal of Financial Intermediation, 41, Article 100833. https://doi.org/10.1016/j.jfi.2019.100833.
Fung, D.W.H., Lee, W.Y., Yeh, J.J.H., & Yuen, F.L. (2020). Friend or foe: The divergent effects of FinTech on financial stability. Emerging Markets Review, 45, Article 100727. https://doi.org/10.1016/j.ememar.2020.100727.
Omarova, S. T. (2021). FinTech and the limits of financial regulation. A systemic perspective. In: I. H.-Y. Chiu, G. Deipenbrock (Eds.), Routledge Handbook of Financial Technology and Law (pp. 44-61). URL: https://www.routledgehandbooks.com/doi/10.4324/9780429325670-3.
Alaassar, A., Mention, A.-L., & Aas, T. H. (2021). Exploring a new incubation model for FinTechs: Regulatory sandboxes. Technovation, 103, Article 102237. https://doi.org/10.1016/j.technovation.2021.102237.
Wang, S., Tu, X., Chai, H., Sun, Q., Wu, J., Cai, H., & Wang, F.-Y. (2020). Blockchain-Powered Parallel FinTech Regulatory Sandbox Based on the ACP Approach. IFAC-PapersOnLine, 53(5), 863-867. https://doi.org/10.1016/j.ifacol.2021.04.183.
Zhao, J., Li, X., Yu, C.-H., Chen, S., & Lee, C.-C. (2022). Riding the FinTech innovation wave: FinTech, patents and bank performance. Journal of International Money and Finance, 122, Article 102552. https://doi.org/10.1016/j.jimonfin.2021.102552.
Mention, A.-L. (2019). The Future of FinTech. Research-Technology Management, 62(4), 59-63. https://doi.org/10.1080/08956308.2019.1613123.
See-To, E.W.K., & Ngai, E.W.T. (2019). An empirical study of payment technologies, the psychology of consumption, and spending behavior in a retailing context. Information & Management, 56(3), 329-342. https://doi.org/10.1016/j.im.2018.07.007.
De Luna, I.R., Liébana-Cabanillas, F., Sánchez-Fernández, J., & Muñoz-Leiva, F. (2019). Mobile payment is not all the same: The adoption of mobile payment systems depending on the technology applied. Technological Forecasting and Social Change, 146, 931-944. https://doi.org/10.1016/j.techfore.2018.09.018.
Meng, S., He, X., & Tian, X. (2021). Research on FinTech development issues based on embedded cloud computing and big data analysis. Microprocessors and Microsystems, 83, Article 103977. https://doi.org/10.1016/j.micpro.2021.103977.
Nasr, M. & Farrag, M. (2020). E-Payment Systems Risks, Opportunities, and Challenges for Improved Results in E-Business. International Journal of Intelligent Computing and Information Sciences, 20(1), 16-27. https://doi.org/10.21608/ijicis.2020.31514.1018.
Yao, M., Di, H., Zheng, X., & Xu, X. (2018). Impact of payment technology innovations on the traditional financial industry: A focus on China. Technological Forecasting and Social Change, 135, 199-207. https://doi.org/10.1016/j.techfore.2017.12.023.
Lee, I., Shin, Y.J. FinTech: ecosystem, business models, investment decisions, and challenges (2018). Business Horizons, 61, 35-46, https://doi.org/10.1016/j.bushor.2017.09.003.
Braun, M., McAndrews, J., Roberds, W., & Sullivan, R. (2008). Understanding Risk Management in Emerging Retail Payments. Economic Policy Review, 14(2), 137-159. http://dx.doi.org/10.2139/ssrn.1072914.
Trautman, L. (2016). E-Commerce, Cyber and Electronic Payment System Risks: Lessons from Paypal. SSRN Electronic Journal, 16, 261-307. http://dx.doi.org/10.2139/ssrn.2314119.
Julapa, J., & Kose, J. (2018). FinTech: The Impact on Consumers and Regulatory Responses. Journal of Economics and Business, 100, 1-6. https://doi.org/10.1016/j.jeconbus.2018.11.002.
Radnejad, A. B., Osiyevskyy, O., & Scheibel, O. (2021). Learning from the Failure of the EU Payment Services Directive (PSD2): When Imposed Innovation Does Not Change the Status Quo. Rutgers Business Review, 6(1), 79-94.
Polasik, M., Huterska, A., Iftikhar, R., & Mikula, Š. (2020). The impact of Payment Services Directive 2 on the PayTech sector development in Europe. Journal of Economic Behavior & Organization, 178, 385-401. https://doi.org/10.1016/j.jebo.2020.07.010.
Bruno, P., Denecker, O., & Niederkorn M. (2021, October 7). Global payments 2021: Transformation amid turbulent undercurrents. McKinsey & Company. https://www.mckinsey.com/industries/financial-services/our-insights/global-payments-2021-transformation-amid-turbulent-undercurrents.
Sénant, Y., Ampenberger, M., Mathur, A., Batra, I., Clavel, J., Creemers, T., Hirano, T., Jhanji, K., Nowicki, S., Strauß, M., Tfeli, A., Vaca, Á., & Zhang, M. (2021). Global Payments 2021: All In for Growth. Boston Consulting Group. https://web-assets.bcg.com/58/30/e7773b6a4c29b79b3673ab21ef66/bcg-global-payments-2021-report-all-in-for-growth-oct-2021-r.pdf.
Palandrani, P. (2019, July 16). FinTech Trends: M&A and Mobile Payments Driving Recent Growth. Global X ETFs, Mirae Asset Financial Group. https://www.globalxetfs.com/FinTech-trends-ma-and-mobile-payments-driving-recent-growth.
Freshfields Bruckhaus Deringer LLP (2021). FinTech in focus: PayTech M&A trends. Freshfields TQ. https://www.freshfields.hk/49ffaa/globalassets/our-thinking/campaigns/tq/FinTech/freshfields_PayTech-trends_072021.pdf.
Statistical Data Warehouse (2021). Payment statistics. European Central Bank. https://sdw.ecb.europa.eu/reports.do?node=1000001386.