Forecasting the elecronification of payments with learning curves : The case of Finland

This paper examines the electronification of noncash payments in
Finland and the extent to which noncash payment means are used as
substitutes for cash. We model the processes of cash substitution
and electronification of payments as 'S'-shaped learning curves and
generate forecasts by extrapolating these curves. The 'S'-shaped
learning curves fit the data well. Our results indicate that in
Finland the cash substitution process as a whole is approaching the
saturation point. Although the electronification process is clearly
ongoing as regards larger-value bill payments, for small-value
point-of-sale payments we seem to have reached saturation.
Electronification of payments, having progressed swiftly and
extensively in Finland, is already beginning to slow down. We
conclude the paper with a discussion of the reasons for this turn
of events and of the different factors that affect the speed of
diffusion of new means of payment.

Key words: payments, electronification, learning curves