Do Businesses Exhibit Payment Preferences as Payors? Evidence from Malaysia

  • Yiing Jia Loke Universiti Sains Malaysia
  • Siew Hwa Yen Universiti Sains Malaysia
  • Andrew K.G. Tan Universiti Sains Malaysia
  • Yew Wah Lai Universiti Tunku Abdul Rahman

Abstract

This paper examines the factors that affect business to business payment preferences. The payment methods have been classified into three categories, namely cash only, paper based and electronic-paper. A multinomial logistic model was used to determine the effect of the factors on the odds and probability of businesses selecting these three payment methods. The factors were broadly divided into two groups: (i) firm’s characteristics and (ii) business payment perceptions and priorities. The findings indicate that characteristics of the firm such as location, business sector, scale of operation, age of the firm, the average total value and volume of monthly payments, and priority of payment attributes have significant effects on business payment preferences. The significance of business priorities in determining the range of payment methods used indicate that businesses that prioritise cost prefer to use electronic-paper based payment methods while those which emphasise convenience and security tend to use paper based payment methods.

Author Biographies

Yiing Jia Loke, Universiti Sains Malaysia

School of Social Sciences, Universiti Sains Malaysia

Siew Hwa Yen, Universiti Sains Malaysia

School of Distance Education, Universiti Sains Malaysia

Andrew K.G. Tan, Universiti Sains Malaysia

School of Social Sciences, Universiti Sains Malaysia

Yew Wah Lai, Universiti Tunku Abdul Rahman

Faculty of Business and Finance, Universiti Tunku Abdul Rahman

Published
2017-06-04
How to Cite
LOKE, Yiing Jia et al. Do Businesses Exhibit Payment Preferences as Payors? Evidence from Malaysia. Malaysian Journal of Economic Studies, [S.l.], v. 50, n. 1, p. 37-53, june 2017. ISSN 1511-4554. Available at: <https://mjes.um.edu.my/index.php/MJES/article/view/2867>. Date accessed: 19 nov. 2017.
Section
Articles