Fintech Adoption by Retail Firms in an Emerging Market: Experimental Evidence of Tech, Marketing, and Financial Interventions

Across developing economies, cash is the conduit for retail transactions. Policymakers, multinational product manufacturers and marketers of electronic payment systems are interested in understanding how to stimulate the growth of electronic payments in emerging markets. In this paper, we investigate what hinders the adoption of e-payment technology by traditional retailers, in particular, whether barriers to adoption are technological, informational or financial in nature. We do this through a rigorous field experiment, where we randomize 900 small retailers in Guadalajara, Mexico into four experimental groups: i) N = 225 firms receive an e-payment technology kit; ii) N = 225 firms receive the e-payment technology kit and informational materials to market e-payments to customers; iii) N = 225 firms receive the e-payment technology kit, informational materials, and a 4-month transaction fee waiver; and iv) N = 225 firms constitute a control group who receive no intervention. By comparing the adoption rates of the different treatment groups, we are able to cleanly analyze which barriers are critical to technology adoption. We additionally aim to study the impact of these interventions on e-payment adoption by neighboring retailers, and business performance.