Analysis the Impact of Mobile Payment on the Economy: The Case of China

With the development of Internet finance and the popularity of mobile terminals, mobile payment has become an important payment method in people's daily life. With the gradually increasing group of mobile payment users and the increasing amount, it is inevitable that it will have some impact on China's currency market, especially the money supply. This thesis analyzes the impact of mobile payment on money supply taking China as an example. The data is taken for the period from 2007 to 2018. In order to investigate this hypothesis, the theoretical and practical studies are conducted in this thesis. The theoretical part went through a few basic elements of mobile payment. Then, the impact of mobile payments on the money supply was analyzed theoretically through some economic formulas. In practical part, macroeconomic variable such as money multiplier, different levels of money supply were used. The Johansen Co-integration test was use to assess the interaction between mobile payment and money supply. By establishing Vector Auto-regression model (VAR), the hypothesis of mobile payment is positively correlated with money supply was approved.