Cross-group network effects of national payment gateway implementation: Evidence from Indonesia’s debit card industry
List of Authors
  • Arianto Muditomo , Yusman Syaukat

Keyword
  • Card Payment, Granger Causality, Network Effect, Two-Sided Market Model

Abstract
  • We use Indonesian debit card data Year 2015-2020 to propose a hypothesis of the existence and intensity of network externalities in Indonesia's two-sided payment card market. We find cross-network effect does not fully occur in Indonesia since only the number of electronic data capture (EDC) installed influenced the average transaction/card and average transaction/EDC. Even after regression analysis, we found that a number of installed EDCs significantly negatively affected average transaction/ EDC. From these results, we can propose that Bank Indonesia prioritizes increasing merchant acceptance rather than increasing the number of payment instruments issued.

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