The Choice of Payment Instruments: the Role of Perception Barriers

This study is aimed to examine the effect caused by perception barriers on payment instrument choice by consumers in а Russian context. It presents an empirical study that uses data from a representative nation-wide omnibus survey of the adult population conducted in October- November 2019. The analysis includes individual social-demographic characteristics, regional controls, and other macroeconomic control variables (e.g. digitalization index, level of financial literacy). The statistically significant evidence in favour of the negative effect of security and convenience barriers is found on cash and smartphone usage for payments, while mixed evidence is found regarding other payment options such as banking card, staged digital wallet and mobile bank. A partial significance with respect to money related barriers (absence of bonuses, the existence of commission fee) is found for cash, banking card and staged digital wallet. The results of the paper can be used by financial services providers and regulatory authorities to improve customer experience in the payment process and facilitate the usage of innovative payment instruments by eliminating perception barriers.