Financial Innovations Role in Consumer Behaviour at Russian Retail Payments Market

This study estimates the effect of contactless payment and various financial innovations on the frequency of payments in terms of number of transactions for different individuals at the Russian retail payments market, using the two-step Heckman model to control for potential selection and survivorship biases. It was found that various types of financial innovations promote activity of consumers at the retail payments market. The result is robust to controlling for importance of interaction with different bank channels for an individual, level of trust to financial innovations and/or technologies provided by different services, different regions across Russia and others. This paper contributes to the existing literature in payment economics by analyzing on an empirical level the effects of emerging and existing financial innovations along with the cashless payments on the consumers’ behavior at Russian retail payments market. The results of the paper provide important implications for both consumers and merchants, as well as help to overcome barriers that prevent spread and use various financial innovations in the future.