CC BY
10СЕКЦИЯ - ТЕХНИЧЕСКИЕ НАУКИ
UDK 004
Ponomarev Evgenii
bachelor’s degree, National Research Lobachevsky State University
of Nizhny Novgorod Russian Federation, Nizhny Novgorod
ANALYSIS OF THE IMPACT OF USING MOBILE APPLICATIONS FOR BILL PAYMENTS ON THE TIMELINESS OF PAYMENTS AND FINANCIAL DISCIPLINE OF USERS
Abstract: This article examines the influence of mobile payment applications on the timeliness of bill payments and financial discipline among users. It explores how automated features and real-time financial management tools enhance user engagement with financial responsibilities. The study considers various behavioral and technological factors that contribute to effective financial governance through mobile platforms.
Keywords: Mobile payments, financial discipline, bill management, user behavior, financial technology, payment automation.
INTRODUCTION
The ability to quickly pay bills, transfer funds, and conduct other operations enhances the timeliness of bill payments. This is important not only for preventing late payments and penalties but also for maintaining healthy financial discipline, which is essential for long-term financial stability.
The objective of this study is to analyze the impact of mobile payment applications on the timeliness of bill payments and the financial discipline of users. The research explores the theoretical aspects of technology adoption and the behavioral consequences for individuals.
MAIN PART. THEORETICAL FRAMEWORK
The study of digital payments and their impact on financial behavior is grounded in several established theories. One foundational theory is the Technology Acceptance Model (TAM), developed by Fred Davis in 1989. TAM explains how users come to accept and use technology by highlighting perceived ease of use and perceived
usefulness as primary factors influencing an individual's decision to adopt a new technology. In the context of mobile payment applications, these factors translate to the convenience and efficiency perceived by users, which drive their adoption and continued use. The Unified Theory of Acceptance and Use of Technology (UTAUT), proposed by Viswanath Venkatesh et al. in 2003, expands on TAM by incorporating social influence and facilitating conditions, which also play significant roles in the adoption of digital payments.
Behavioral economics provides another critical lens through which the impact of digital payments on financial behavior can be understood. Daniel Kahneman and Amos Tversky's Prospect Theory, introduced in 1979, suggests that individuals make financial decisions based on perceived gains and losses rather than absolute outcomes. Mobile payment applications, by offering immediate feedback and easy access to financial information, can alter these perceptions and influence financial behaviors. The ease of tracking expenses and the visibility of financial transactions provided by these applications can lead to more informed and disciplined financial decisionmaking.
Financial discipline is a concept closely related to consumer behavior and is essential for understanding the implications of mobile payment applications. Albert Bandura’s Self-Regulation Theory posits that individuals’ ability to regulate their behavior in alignment with long-term goals is crucial for maintaining financial discipline. Mobile payment applications support self-regulation by offering tools such as expense tracking, budgeting features, and reminders for due payments, which help users align their immediate financial actions with their long-term financial goals.
Consumer behavior theories, such as the Theory of Planned Behavior (TPB), developed by Icek Ajzen in 1991, suggests that intention, attitude towards the behavior, subjective norms, and perceived behavioral control are determinants of an individual’s actions. In the realm of mobile payments, users’ attitudes towards digital transactions, the influence of peers and societal norms, and their confidence in using the technology effectively shape their financial behaviors. Furthermore, Richard Thaler and Cass Sunstein’s concept of nudging, derived from behavioral economics, is relevant.
Nudging involves subtly guiding individuals towards desirable behaviors without restricting their freedom of choice. Mobile payment applications can employ nudging techniques by providing timely reminders and alerts, thus encouraging timely bill payments and fostering better financial habits.
The integration of these theoretical perspectives provides a comprehensive framework for understanding how mobile payment applications influence financial behavior and discipline.
TECHNOLOGICAL ADVANCEMENTS AND THEIR IMPLICATIONS FOR
FINANCIAL TRANSACTIONS
The advent of mobile payment applications marks a significant milestone in the evolution of financial transactions. This transformation began in the early 2000s with the development of pioneering technologies and has since grown into a vast industry led by major tech firms and innovative startups.
One of the earliest and most influential mobile payment systems was PayPal, founded by Max Levchin, Peter Thiel, and Luke Nosek in 1998. Initially launched as a web-based service, PayPal quickly adapted to the mobile platform, setting the stage for future mobile payment solutions. PayPal's success highlighted the potential of digital payments and paved the way for further innovations.
In 2011, Google introduced Google Wallet, later rebranded as Google Pay, which integrated near-field communication (NFC) technology to enable contactless payments. Google Pay's launch signified a crucial advancement, demonstrating how mobile devices could be used not just for online transactions but also for in-store purchases. Similarly, Apple introduced Apple Pay in 2014, leveraging its vast ecosystem of devices to popularize NFC-based mobile payments. Apple Pay, developed under the leadership of Eddy Cue, has been instrumental in promoting the widespread adoption of mobile payment technology.
Modern mobile payment applications offer a range of functionalities beyond simple transactions. Features such as peer-to-peer payments, integration with loyalty programs, expense tracking, and even investment options have become standard. For instance, Venmo, acquired by PayPal in 2014, has gained popularity in the USA for its
social payment features, allowing users to share and comment on transactions within a social feed.
According to digital payment business statistics by Civic Science, the largest digital wallet in the USA in 2022 was PayPal (fig. 1).
Figure 1. Use of digital wallets in the USA, % [1]
The transaction value in the global digital payments market is projected to reach 11.55 trillion dollars in 2024. This figure will show an annual growth rate of 9.52%, leading to a forecasted total of 16.62 trillion dollars by 2028 [2].
According to experts, the leader in the overall ranking of payment services in Russia in 2023 was Sberbank, scoring 72.3 points. This is attributed to the high popularity of the bank's payment service within the entrepreneurial community. Similar results were shown by Tinkoff Kassa (68.6) and the payment service YooKassa (66.9). The ranking was based on important criteria for evaluating the performance of payment services: demand among individuals and entrepreneurs, the variety of payment methods offered to clients, technological features of the payment systems for easy integration and increased conversion on websites, the size of fees for various payment methods, connection speed, and the quality of customer support [3].
The implications of technological advancements for financial transactions are profound. Mobile payment applications enhance convenience and accessibility, allowing users to make payments anytime and anywhere. This flexibility has led to increased consumer engagement with digital financial services. The integration of mobile payments with other financial services, such as budgeting tools and investment
platforms, promotes better financial management and discipline among users. Applications like Mint and YNAB (You Need A Budget) provide comprehensive financial overviews, helping users track spending and plan for future expenses.
Mobile payment applications contribute to financial inclusion by providing services to unbanked and underbanked populations. In regions with limited access to traditional banking, mobile payment solutions offer a viable alternative for managing finances. M-Pesa, launched by Vodafone in Kenya in 2007, is a notable example, providing mobile-based financial services to millions of users who previously had no access to banking.
As the industry continues to innovate, mobile payment applications are poised to play an increasingly central role in the global financial ecosystem, driving further advancements in financial technology and consumer behavior.
USER ADOPTION AND BEHAVIORAL CHANGES
The adoption of mobile payment applications has induced significant behavioral changes among users. They are driven by the unique features and conveniences offered by mobile payment technologies, which alter how individuals perceive and engage with their financial activities.
One of the most notable behavioral changes is the increased frequency and convenience of transactions. Mobile payment applications enable users to make payments quickly and effortlessly [4]. Users no longer need to carry cash or physical credit cards, reducing the friction associated with traditional payment methods. The ability to complete transactions with a simple tap or scan has led to a shift towards a cashless society, where digital payments are preferred for everyday purchases.
Mobile payment applications offer users greater visibility into their financial activities, allowing them to track their spending patterns and identify areas where they can save money. This increased transparency fosters a sense of control over personal finances, encouraging users to adopt more disciplined financial behaviors. For example, users can set spending limits, categorize expenses, and receive alerts for upcoming bill payments, helping them avoid late fees and maintain financial discipline.
The social aspect of mobile payment applications has also influenced user behavior. Platforms like Venmo and WeChat Pay incorporate social features that allow users to share and comment on transactions. This social interaction around financial activities has led to the emergence of new social norms and behaviors. For instance, splitting bills and sharing expenses among friends has become more streamlined, reducing potential conflicts and enhancing social cohesion.
Mobile payment applications have also contributed to the growth of contactless and remote transactions. The COVID-19 pandemic accelerated the adoption of contactless payments as a safer alternative to cash and card transactions. This shift has led to a long-term change in consumer behavior, with many users continuing to prefer contactless payments even as restrictions ease. The convenience and perceived safety of mobile payments have reinforced their use, further entrenching them in daily financial activities.
INFLUENCE ON TIMELY PAYMENTS
The influence of mobile payment applications on the timeliness of bill payments is substantial, with recent advancements and practices significantly contributing to improved financial discipline.
In the USA, PayPal simplifies the payment process through automatic payments for recurring bills, ensuring they are always paid on time without user intervention. It also keeps users informed with reminders and notifications about upcoming bills, which helps in avoiding late fees. The app's design for one-tap payments minimizes the steps involved, enabling users to clear their dues swiftly and efficiently. PayPal offers flexibility in funding sources, allowing users to link multiple bank accounts, credit cards, and maintain a PayPal balance to ensure funds are always available for payments. The mobile accessibility of PayPal means that users can manage and pay their bills anytime and from anywhere, which is crucial for maintaining timely payments. PayPal employs strategic initiatives to enhance its investment attractiveness in the USA market, focusing on expanding its digital payment services and enhancing security measures. These strategies aim to attract a broader customer base and foster
trust, contributing to PayPal's robust financial performance and appealing to potential investors [5].
Cash App, developed by Block, Inc. (formerly Square, Inc.), has seen significant adoption and growth. Cash App, launched in 2013, now includes a variety of features aimed at enhancing financial management. In 2022, Cash App introduced the ability to set up recurring payments and receive reminders for upcoming bills. These features ensure that users can automate their bill payments and receive timely notifications, reducing the likelihood of missed payments. Additionally, Cash App's integration with investment options and Bitcoin trading provides users with a comprehensive financial management tool. As the American manufacturing sector enters a new era characterized by reorganization, risk assessment, and profit analysis, digital financial services like Cash App can play a significant role. By providing innovative payment solutions and fostering financial inclusion, Cash App can help streamline transactions and financial management for businesses adapting to these new manufacturing landscapes [6].
In Russia, Sberbank’s app integrates a direct bill payment system that allows users to pay for utilities, taxes, and other services effortlessly within the banking environment. This seamless integration ensures that payments are made promptly. Scheduled payments further automate the process, where the bank handles transactions on predetermined dates, reducing the risk of late payments. Sberbank's app is designed to keep users well-informed with real-time alerts for due bills and provides a comprehensive view of all upcoming payments, which aids in better financial planning.
Tinkoff, a digital bank founded in 2006, has become a leading provider of financial services. Tinkoff's mobile app offers a wide range of features designed to enhance the timeliness of bill payments. Users can set up automatic payments for utilities, loans, and other recurring expenses. The app provides detailed spending analytics and sends reminders for due payments, ensuring users are aware of their financial obligations. Tinkoffs «Early Salary» feature allows users to access their wages ahead of the scheduled payday, providing liquidity to cover bills promptly.
PROSPECTS FOR THE DEVELOPMENT OF MOBILE APPLICATIONS IN
THE FINANCIAL SECTOR
The future development of mobile applications in the financial sector promises to bring significant advancements, driven by technological innovations and evolving user needs (table 1).
Table 1. Prospects for the development of mobile applications in the financial
sector [7,8]
Prospect Description Impact on Financial Sector
Cybersecurity enhancements Implementation of advanced encryption, biometric authentication, and real-time fraud detection systems Ensures user data protection, builds trust, and mitigates risks of cyber-attacks
Integration of neural networks Utilization of AI and machine learning for personalized financial advice, predictive analytics, and automated customer service Enhances user experience, improves decision-making, and increases operational efficiency
Blockchain technology Adoption of blockchain for secure, transparent, and efficient transactions Reduces fraud, ensures transparency, and facilitates faster cross-border transactions
Open banking Collaboration between banks and fintech companies to provide integrated financial services through open APIs Offers more personalized and comprehensive financial products, promotes innovation, and enhances competition
Financial Inclusion Development of applications aimed at providing financial services to underserved populations Expands access to banking services, reduces financial inequality, and fosters economic development
Enhanced user interfaces (UI) Design improvements focusing on user-friendly interfaces and intuitive navigation Increases user engagement, improves accessibility, and enhances overall user satisfaction
Sustainable finance Integration of features that promote sustainable investing and environmentally conscious financial decisions Encourages responsible investing, supports green initiatives, and aligns financial practices with sustainability goals
From the author's perspective, the expansion of functionality and improvement of user interfaces in mobile applications for bill payments continue to attract an increasing number of users, while ensuring a high level of convenience and security. The integration of advanced technologies such as artificial intelligence, blockchain, and big data opens new opportunities for personalization and enhancing the efficiency of operations. Strengthening security measures and compliance with regulatory requirements remain important aspects that require ongoing attention from developers.
CONCLUSIONS
The analysis of mobile payment applications delineates their substantial role in enhancing the punctuality of bill settlements and fostering financial discipline among users. These applications integrate automation of transactions, timely alerts, and comprehensive budgeting tools, which collectively contribute to effective financial management. The capability of these platforms to provide immediate access to financial services, alongside the flexibility of managing finances remotely, significantly aids users in adhering to their financial obligations. The provision of realtime financial visibility empowers users, promoting a disciplined approach to financial decision-making. The continued evolution of these applications suggests a promising trajectory for further innovations in financial technology, with potential to extend even more robust support and functionalities to users globally.
REFERENCES
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Civic Science URL: https://civicscience.com/paypal-leads-among-digital-wallet-
adoption-but-cash-stays-relevant/ (date of application: 04.04.2024)
2. Digital Payments - Worldwide // Statista URL: https://www.statista.com/outlook/dmo/fintech/digital-payments/worldwide (date of application: 10.04.2024)
3. Rating of Payment Services in Russia 2023 // RBC URL: https://marketing.rbc.ru/articles/14332/ (date of application: 05.04.2024)
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