The Role of Digital Inequality in Payment Behaviour at Russian Retail Markets

This research examines the role of the digital inequality in the probability of buyer’s decision whether to choose cashless methods of payment or not and the probability of acceptance of such payment by merchants. The work empirically tests effects of digital differentiation among Russian regions on the probability of cashless paying/receiving decision on the basis of representative survey of 800 traditional (offline) merchants and 1500 individuals from all Russian regions, also basing on the data from Levada - center, “Courier”, 2013 - 2014. The main conclusion of this study - the probability of cashless payment decision as well as probability of acceptance is growing proportionally to the growth of digital injection in common life, controlling for a large set of control variables, including characteristics of regions, types of merchants, data about the internet usage among regions. The results are robust to the changes in measures of explanatory and control variables. Also, the results are significant economically and statistically. In practice, understanding the degree of digital injection into consumers’ environment as well as regional digitalization level may explain the extent to which the government, banks and other participants of the market can influence the probability of cashless payment and acceptance decision.