Mobile Payments and Households’ Over-indebtedness: Micro Evidence Based on Subjective and Objective Perspectives

With the rapid rise of mobile payment services in China, its welfare effect on residents has attracted wide attention from all sectors of society, but little is known about its negative consequences. Using panel data from the China Household Finance Survey in 2017, 2019, and 2021, and based on both subjective and objective perspectives, this study aimed to empirically analyze the impact of mobile payment usage on household over-indebtedness risk, its transmission mechanism, and role differences in different social groups. The results showed that mobile payments significantly increased the possibility of household over-indebtedness, including objective and subjective over-indebtedness. The mechanism analysis showed that mobile payments amplified the risk of household over-indebtedness mainly through two channels: promoting household consumption and alleviating household credit constraints (especially demand-oriented credit constraints). The heterogeneity analysis of sub-samples showed that mobile payments led to clear group differences in terms of increasing the risk of household over-indebtedness, with its promotion and popularization having a more profound impact on vulnerable groups, such as rural households, low-education households, and low-income and low-wealth households. This study addresses a key gap in the literature, helps with understanding the characteristics of household over-indebtedness in the mobile payment environment, and provides evidence-based guidance to assist individuals to engage with mobile payments more rationally and reduce their exposure to debt risks.