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4th Annual Applied Science and Engineering Conference IOP Publishing
Journal of Physics: Conference Series 1402 (2019) 066085 doi:10.1088/1742-6596/1402/6/066085

The influence of digital payments on public spending patterns

B Kurniawan1, S F Wahyuni2 and T Valentina1,*

1
Departemen Teknik dan Ilmu Komputer, Universitas Komputer Indonesia, Bandung,
Indonesia
2
Departemen Akuntansi, Universitas Komputer Indonesia, Bandung, Indonesia

*[email protected]

Abstract. The purpose of this study is to analyze the effect of developing digital payments on
current patterns of public spending. The method used in the writing of this paper was a
descriptive method, where this method was intended to describe events related to digital
payments and public spending patterns, and supported by theoretical foundations both from
abroad and domestically. Digital payment was a payment system that uses internet facilities as
an intermediary. The results of this study indicate that digital payments affect public spending
patterns. Many people feel helped by the existence of this digital payment because with the
existence of digital payments the public feels easier in making transactions. This can be seen
from the number of people who make transactions using e-money every day. Therefore, many
patterns of public spending change, from those who initially shop at direct retail stores (offline),
now shop through applications (online stores) or what we often know as e-commerce.

1. Introduction
Currently, the use of payment systems is very popular, one of which is Blok chain. Blockchain
technology (aka Distributed Ledger Technology or DLT) is a technology with Peer-to-Peer
configuration, cryptographic and distributed computing technology, so that it has the potential to convert
the internet from internet information to the internet with a digital value network or payment system [1].
After the era of democracy, or at present digital payments can affect changes in behavior of buying and
selling carried out by the community. This is due to the rapid growth in internet usage to support the use
of various services online, supporting the formation of online services and digital payment applications
that are increasingly popular nowadays [2]. In addition, digital payments that can be specifically
activated on smartphones have great potential to change the lifestyles of millions of people in developing
countries by offering financial services to the masses without having to have bank accounts [3].
The results of Laila Ramadhani's research conducted on 240 students of Malang State University
explained that there was a significant influence between the use of e-payment on student expenses. This
is due to the ease and speed of e-payment, so the higher the use of digital payment (e-payment), the
higher the consumer behaviour of students [4]. Jun Ma, Gokhan, Karaati also researched the influence
of the internet network on people's shopping style and decision making. The results of his research show
that the rapid development of technology, especially in the business field, increases the desire of the
public to be able to shop through the internet network and more trust to shop through e-commerce [5].
While Sitorus Siera researches the effect of electronic payments on Indonesian cash transactions which
shows that the use of digital payments can reduce the monetary costs of printing and circulation of
banknotes and is more efficient, safe, convenient and fast [6], Zandi, M analyzes the effect of digital

Content from this work may be used under the terms of the Creative Commons Attribution 3.0 licence. Any further distribution
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4th Annual Applied Science and Engineering Conference IOP Publishing
Journal of Physics: Conference Series 1402 (2019) 066085 doi:10.1088/1742-6596/1402/6/066085

payments on economic growth. The results of the study show that card users can make the economy
more efficient, resulting in significant changes to economic growth from year to year [7]. Based on
research conducted in Singapore, it was found that digital payments are an evolution towards a society
without cash, which must be supported by access to information technology available in all countries
and existing government systems, there are important factors to be able to start making payments without
money cash or digital payments, such as merchant discount rates, critical mass, point-of-sale interfaces,
mass transit cards, consumer behavior and government policies [8].
This paper was created to analyze the effect of digital payments on public spending patterns. Where
in this study used a descriptive method to describe the conditions that happen at this time and supported
by theories from experts.

2. Method
This research uses a descriptive method to describe the condition of the digital payment influence on
the pattern of public spending and using previous research related to the influence of digital payment as
a comparison with the results of research that has been done. So it can analyze how much influence the
digital payment to changing patterns of public spending.

3. Results and discussion

Along with the times, now payment is easier because it can be done anywhere and anytime. We no
longer need to carry cash with a large nominal because there are many ATM cards that we can use,
besides many other types of digital payments such as e-banking, some types of electronic wallets, and
many other digital payments that have been developed at this time.
Smart cards are one type of digital payment in the form of cards with embedded computer chips that
store several bank accounts and personal data. As owned by Unikom students, the card can be used as a
student sign card, ATM card, attendance card, and some other applications [9]. Jieh-Shan Wang
explained that the digital payment (e-payment) is an electronic wallet that contains account information
and security for which is usually in the form of a smart card and used to make transactions [10]. The
following are the types of digital payments that have been known and used by the public:

3.1. Electronic payment system

Electronic payment systems are now systems where transaction activities are carried out digitally and
payments are generally made using digital payment instruments, one of which is like bitcoin. One of the
electronic payment systems is done by blockchain, which is the data system for each user connected to
the payment server that will be made, so that it has a list of each transaction made. Currently various
types of applications offer various payment methods, one of which is digital payment simply by filling
in a digital wallet and tailored to the type of digital wallet used. Some of the activities that can now be
carried out with digital or online based transactions are online or manual transportation reservations with
payment methods through digital wallets, ordering food and beverages, and shopping for various needs
can be done by digital payment (Figure 1).
Blockchain can be likened to a database that can distribute various records, or public ledgers of all
digital transaction or event activities that have been carried out and can be shared with the parties
involved. While Bitcoin is a decentralized peer-to-peer digital currency, is the most popular example of
using blockchain technology, and has been well integrated into every application in the financial and
non-financial world, such as addressing issues related to activities that require integrity with information
in the various current and nearest timeframes, assuming that the security system can be controlled by
infrastructure management. [11,12].

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4th Annual Applied Science and Engineering Conference IOP Publishing
Journal of Physics: Conference Series 1402 (2019) 066085 doi:10.1088/1742-6596/1402/6/066085

Figure 1. Activities with digital payments.

3.2. Payment card

This payment card can be used if you still need cash, the usage is quite easy, just go to the nearest ATM
and make cash withdrawals. In 2015 Bank Indonesia noted that the number of outstanding credit cards
increased by 5.25% from the previous year. While the dilution through the tempo, in terms of transaction
value, credit card usage has increased by 8% with 23.78 transactions per year

3.3. Electronic wallet

Electronic wallets are many used by people at this time because the system is practical and usually likes
to have lots of promos in it. Juniper Research said that the number of virtual wallet users would increase
to 450 million people at the 2020s worldwide. The following are some kinds of world-famous electronic
wallets:

3.3.1. Paypal. PayPal is an electronic payment system that replaces conventional transactions in the
form of checks and money transfers. Having PayPal, like you have an online account that can be used
to buy products and receive funds from people who have a PayPal or credit card account.

3.3.2. Google Pay. Google Pay is a fast and easy way to make payments online. Book trips, order food,
see shows and enjoy new experiences - all without our wallet.

3.3.3. Apple Pay. Apple Pay is a mobile payment and digital wallet service by Apple Inc. which allows
users to make payments directly, on iOS applications and the web. This application is supported on the
iPhone, Apple Watch, iPad, and Mac.

With the increase in digital payment, e-commerce sales also increased. E-commerce by Zwass
Vladimir is a site for sharing business information, establish business relationships, and conducting
business transactions over telecommunications networks [13]. With many people shopping on several
e-commerce sites, this has shown an increase in users of digital payments.

4. Conclusion
Technological developments made it easy for many people, one of them in the field of sales transactions.
We could easily buy or sell goods on e-commerce sites use digital payment (e-payment). With digital
payments, it was easy for people to make transactions anytime and anywhere. This affects the pattern of
community spending from those who initially used cash, now using electronic payments. From graphics
data, it had been explained that e-commerce and electronic payment users had increased from year to
year. That meant digital payments was very influential in changing patterns of public spending at the
moment. Because with a digital payment people prefered to shop online.

3
4th Annual Applied Science and Engineering Conference IOP Publishing
Journal of Physics: Conference Series 1402 (2019) 066085 doi:10.1088/1742-6596/1402/6/066085

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