Analysis the Effect of Money Supply, Velocity of Money, Interest Rates and Inflation on Non-Cash Payments: Evidence in Indonesia

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Purwohandoko, Abshor Marantika, Citrawati Jatiningrum


This study investigates the effect of the money supply, velocity of money, interest rate, and inflation on non-cash payments in Indonesia either partially and simultaneously. The study used quantitative research method with a causality approach with the secondary data where obtained from the official website of Bank Indonesia and the Central Statistics Agency. The population in this study reached 480 data obtained from e-money payment data, money supply, velocity of money, interest rates and inflation in Indonesia in 2012-2019 (8 years). The techniques sampling is a sample or saturated sample, using the multiple linear regression analysis. Result finding reveal that the money supply amount, velocity of money, and inflation have an effect on non-tuned payments. Evidence shows that money supply will be elastic in response to changes in the volume of non-cash payment transactions The relationship pattern shows a strong effect in each variables.  The implication of the results of this study for the government policies, especially Bank Indonesia related with demand for money supply on monetary policy in Indonesia.

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