Physical or Digital Payments : Towards a Dominant Design?

Abstract: Rapid digitalisation development has been stampeding widely across today’s societies, and not least in the payment industry. Though, the digitalisation in the payment industry has been very deviating, even between similar well-developed countries, and while there are positive and negative effects with both digital- and physical payment means, there is little knowledge that highlights the influencing factors and accompanied problems. This study therefore explore swhich, and how, different factors influence a country’s degree of digital payments, and creates further understanding of where the payment markets are heading in the future. It is done through a case study of four different industrialised countries, Sweden, Italy, Canada, and Switzerland which involves mapping the countries’ payment markets, as well as potential factors influencing a population’s payment habits, through a perspective of innovation theory in terms of dominant designs and technological discontinuities. Theory of network externalities and two-sided platforms are further used to explain and discuss how a two-sided market, likethe payment market, is affected by changes and other circumstances in different ways.Conclusions are then drawn from the used theories together with a comparison of the findings,and identifies certain influencers to a country’s distribution of payments, as well as provides indications of where the different payments markets are heading in the future. Data is mainly gathered through written material and credible databases, but also from semi-structured interviews.