Digital Payment System and Supply Chain Finance: An Analysis of Adoption and Impact
Abstract
The paper analyzed the critical position of digital payment systems in the transformative environment of the supply chain finance (SCF) as a solution to the problematic issues of inefficiency and high costs of transactions in conventional payment systems. The objective was to examine the adoption tendencies and a complex influence of these technologies on the efficiency of SCF and financial inclusion. The study was structured using the concepts of the Transaction Cost Economics (TCE), and its secondary quantitative data analysis involved a Vector Autoregression (VAR) model and a Granger Causality test. They discovered that the digital payment systems have been highly implemented in the financing of supply chains, and is highly applicable in Europe and Asia, with Africa as an emerging market, especially Kenya and Nigeria. The results also found almost perfect correlation between digital logistics market and the global supply chain management market. The analysis reveals however no statistically significant prediction relationship showing a complex, symbiotic relation instead of a direct, causal relationship. The paper calculated that digital payments were an essential initiator to a more deft and inclusive SCF framework, but its potential would rely on solutions to enduring systemic and conduct obstacles. Stakeholders were advised to strengthen security in transactions in order to reduce the increase in cyber security threats.
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Firozpur Jhirka, Haryana, India
