ELECTRONIC PAYMENT SYSTEM AS PREFERRED HOTEL PAYMENT

METHOD OF YOUNG PROFESSIONALS FROM NAGA CITY

BY:

AGORITA, CHRISTIAN DAVE

BERIÑA, JERICK

ESCOBER, CRISTINE JANE

A Research Study Presented to FRANCIS GLADYS BELMIN

In Partial Fulfilment of the Requirements in

Research in Hospitality

JULY 2022
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CHAPTER 1

NTRODUCTION

Technology changed our world throughout history. There are a lot of innovations

from everywhere you look like infrastructure, business finance, and digital machines that

are increasingly enhanced every year; in reality, the internet, the world-famous method of

generating new ideas is now undergoing a vital redesign to meet people's needs.

According to the statistic in 2019, there were 4.13 billion internet users worldwide;

indicating that more than half of the world's population is connected to the internet.

While the digital population is rising visibly in many parts of the world, internet

connectivity and affordability can vary greatly based on where the country is situate.(J

Clement 2020). The internet has increasingly become a popular means of carrying out

transactions, such as banking and retail transactions. P2P payment websites have arisen to

facilitate payments between individuals over a computer network. Other online services

include exchanges of cash between two individuals, such as auction payments or group

billing (Guthrie et al, 2002).

Electronic payment systems have been used in the last two decades because of

their crucial role in modern electronic commerce; researchers, and information system

designers have earned a great deal of attention. It led to comprehensive and in-depth

studies that, among others, provided numerous perspectives on e-payment definitions.

These principles were viewed primarily from various viewpoints, ranging from

researchers in accounting and finance, business technology in information systems. E-

payment is a form of inter-links between banks and inter-switch houses supported by

organizations and individuals that electronically allow a monetary exchange (Briggs and
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Brooks 2011). The electronic payment system refers to an electronic payment process for

products and services purchased online or in supermarkets and shopping centers (Adeoti

and Osotimehin2012). Another definition suggests that e-payment systems are payments

made in the electronic commerce environment in the context of money exchange through

electronic means (Kaur & Pathak, 2015).

With the introduction of mobile money, the Philippines was one of the first

countries to pioneer digital payments in 2001. It was first introduced in the country by

Smart Communications Inc., a telecommunications provider. The Bangko Sentral ng

Pilipinas (BSP) has recognized digital payments as a policy priority. It has advocated the

migration from a cash-based to a digital or a cash-lite economy.

The country's payment system must be efficient so that funds can pass for

productive use by market participants. Developments in the system of payments have

consequences for monetary policy behavior. Well-functioning financial markets can

enhance the efficacy of indirect monetary policy instruments. The payment system of the

Philippines is not immune to threats, no matter how advanced and sophisticated it is.

Failure to settle one large payment transaction by one party could conveniently spread to

other transactions, causing the entire system to be disrupted. Systemic failure will

ultimately weaken monetary policy efficacy and hurt the actual sector of the economy.

Monetary authorities have a strong interest in fostering a sound and effective payment

system and in finding ways to reduce systemic risk.

Financial inclusion exists where only 42% of Filipinos have entry to banks, which

gave rise to the need for a more reliable and effective way of exchanging money. The

cutting-edge invention in cashless payments spawned this (Ching 2017). According to

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Inquirer.net, the online survey resulted that 87% of Filipinos increased their use of digital

payments, while 90% said they favored digital payments over cash during the pandemic.

It means that Corona Virus Disease 2019 accelerated Filipino consumers to shift from

cash to digital transactions. However, the survey found that 49% of respondents defined

protection as the most significant factor when selecting the digital payment platforms to

use. Furthermore, respondents said the latest transaction form is here to stay, with an

overwhelming 99% saying that even after neighborhood quarantines are lifted, they

expect to keep using digital payments. By these, in the coming years, we can expect

changes in our payment system.

Electronic payment systems allow financial institutions, businesses and the

government to offer a variety of payment options to their customers. These systems

include automated teller machines, debit cards, credit cards, mobile banking and

payment of bills through the phone. Traditional business payments systems depends

mainly on a limited number of the business outlets situated in different locations. This

limits the client coverage; however – through Internet services – systems that rely on

e-payment are available to a large number of clients.

Statement of the Problem

This study aims to determine that Electronic Payment System is the preferred

payment method in Hotel of young professionals from Naga City. Specifically, it seeks to

answer the following questions:

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1. What is the profile of young professionals in terms of:

a. Age

b. Gender

c. Profession

d. Number of years using EPS

2. What are the factors that influence young professionals to use Electronic Payment

System as payment method in a Hotel?

3. What are the constraints encountered by young professionals in using Electronic

Payment System as payment method in a Hotel?

4. What are the possible recommendations from the study?

Scope and Delimitation

The study will identify whether young professionals from Naga City prefer

Electronic Payment System as their payment method for hotels. The study would also

determine the factors that influence young professionals in using EPS. This will involve

30 selected young professionals from Naga City ages from 25-35-year-old as the main

respondent of the research. The respondents should have the experience to check in to

hotels.

The researchers recognize the limitation regarding the reduced direct evaluation in

terms of the participants' compliance with the provided activities. The e-mail which will

be sent will be the only instruction material to be provided, although the respondents can

send a message to researchers during the process.

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Significance of the Study

The findings of this study will be favorable and great aid to the following:

Electronic Payment System Users – The study will be beneficial to EPS USERS since it

sought to relay important information about Electronic Payment System in the

Philippines specifically in Naga city.

Young Professionals- The study will provide young professionals with the utmost

awareness about Electronic Payment System to help them to understand on how EPS

works.

Hotel Management– The study will be useful for Hotel Management to design various

means to be implemented when it comes to the constraints encountered by EPS users.

Future Researcher – Future researches can utilize this study as a future reference,

wherein they can make further improvement by producing a new set of interview

questionnaires or modify new tools. This can be a reference framework for identifying

variables or limitations and recommendations.

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CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

Related Literature

S Fatonah et al. (2018) A Review of E-Payment System in E-Commerce, the

Information Communication Technology age and digital innovation are leading to

dynamic shifts in the business climate, where business transactions continue to move

from cash-based to electronic-based transactions. Not to replace cash, but as a better

alternative to cash and exchange barter, the e-payment system was implemented. It is

possible to consider electronic payments as a payment system using electronic media that

does not require cash. A significant feature of e-commerce is the electronic payment

system (e-payment).

According to Brown (2013) report on World Payments Report found that The use

of cards (debit and credit) further accelerated during 2011, with debit card volumes rising

15.8% to a total of 124 billion transactions, and credit cards climbing 12.3% to a total of

57 billion. The non-cash arena is led by these two payment instruments, with debit cards

being the most common non-cash payment instrument worldwide. Increased penetration

of smart phones and internet use, advances in technology, and creative products and

services are three factors that help drive growth in mobile and electronic payment

transactions. This growth makes the country an attractive one for banks and non-banks

alike.

Mohammad Auwal Kabir*, et al. (2016) on their study entitled Adoption of e-

Payment Systems: A Review of Literature, it indicates that in today's business world, e-

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payment systems are rapidly becoming a daring form of payment. This is because of its

efficiency, ease and timeliness. It is a payment mechanism that is constantly being

applied and accepted in both developed and developing countries' financial systems in

order to simplify and encourage payments for business transactions. As a result, several

studies on e-payment adoption have been carried out by scholars across the globe.

Bezovski, Zlatko (2016) The development of the Internet and the arrival of e-

commerce fostered digitalization in the payment processes by providing a variety of

electronic payment options including payment cards (credit and debit), digital and mobile

wallets, electronic cash, contactless payment methods etc. Mobile payment services with

their increasing popularity are presently under the phase of transition, heading towards a

promising future of tentative possibilities along with the innovation in technology.

Mathew et al (2014) focus on Assessing Technology Differences in Electronic

and Mobile Payment Systems among Developed and Developing Countries, they

examined 45 current electronic and mobile payment systems in developed and

developing countries. First, each payment technology, consisting of SMS, WAP, USSD,

NFC (RFID), Smart Card, Internet and IVR, was evaluated and graded as belonging to

one of several major categories. Then, as an input for sub-sample factor studies, a

technology prevalence matrix taken from the previous stage was used. On their study

they found out MS, IVR and PC-based payment technologies were found to be more

prevalent in developing countries, while smart card appeared most popular in developed

countries. This contrast suggests that developing countries may have bypassed some

established technologies and leapfrogged to mobile EPS instead. Factor analyses were

run for each group and the first factor shows some differences in the main pattern of EPS
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for developing and developed countries. Mobile and PC-based technologies stand out

when compared with NFC and smart card technologies for EPS.

Yaser Ahangari Nanehkaran (2013) according to his study electronic commerce

serves clients, offers services and goods, handles business information, and manages

business information. Business transactions and maintenance of connections between

suppliers, customers and suppliers via telecommunication network equipment. In line

with the evolution of the world in the field of electronic commerce, new multinational

business companies and organizations offering goods and services are in effect changing

the conceptual and physical framework of their organization in this area. This study

argued that, apart from all the benefits, there are limitations in electronic commerce:

access to personal computers, low-speed Internet transmission of data, and difficult

Internet access to websites. He also stresses the barriers of electronic payment system

such as; Lack of knowledge and needed information for use of electronic commerce and

internet network; protection of consumer rights in electronic commerce; low security of

electronic funds transfer in some countries; lower speed and limitations on the use of

Internet; the security and confidentiality of information exchanged and lack of

information intermediary institutions and manufacturing companies of the benefits of

Internet business. However, electronic commerce will change the face of the world with

the rise in Internet users and ease of access to the virtual world of the Internet.

Harris et al (2011) according to their study on Evidence of Firms’ Perceptions

Toward Electronic Payment Systems (EPS) in Malaysia that the extent of use of

electronic cheques, smart cards, and electronic cash is rather sluggish, but that the banks‟
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service performance was found to be satisfactory. Study results also indicate that the most

important factor influencing the firms‟ perceptions is flexibility of the payment system,

followed by functionality, data management, privacy, and security of the EPS.

Functionality, privacy, and security were important factors in predicting the level of EPS

use.

Singh Sumanjeet (2009) new financial needs have been generated by the advent

of e-commerce that the conventional payment cannot be easily met in many situations.

Recognizing this, virtually all interested parties are exploring various types of electronic

payment system and issues surrounding electronic payment system and digital currency.

According to this, broadly electronic payment systems can be classified into four

categories: Online Credit Card Payment System, Online Electronic Cash System,

Electronic Cheque System and Smart Cards based Electronic Payment System. For

clients and merchants, every payment system has its advantages and disadvantages. There

are numerous requirements for these payment systems:  e.g. protection, acceptability,

convenience, cost, confidentiality, control, and traceability. Instead of concentrating on

the technical specifications of different electronic payment systems, the researchers

therefore differentiate electronic payment systems on the basis of what is transmitted over

the network, and analyze the the different electronic payment systems by evaluating the

requirements, characteristics and applicability of each system.

Related Studies

Noor Raihan Ab Hamid1 and Aw Yoke Cheng (2020) on their study about risk

Perception Analysis on the use of Electronic Payment Systems by Young Adult it was

stated that E-Payment systems have gained varying degrees of adoption worldwide, with
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some e-payment solutions being widely accepted while others are comparatively lower.

The perceived risk associated with payment systems is largely considered to be one of the

factors leading to the low risk. According to them the aims of this research was to define

the perception of e-payment risk by young adults and their behavior towards different

payment methods. For the data collection reason, survey questionnaires were distributed

to students from tertiary institutions in a metropolitan city in Malaysia as the study

sample. The findings showed significant difference in perceived risk between cash and E-

Payment but less significant in terms of volume of purchase.

Barkhordari et al (2017) according to their study on Factors influencing

adoption of e-payment systems: an empirical study on Iranian customers, because of its

capacity to boost the efficiency of financial activities, Internet technology has affected

banking systems. The perception of security and trust by customers is a major concern for

Internet banking systems. This research provides an experimental study of important

factors affecting trust in Iranian e-payment systems. Three key groups establish and

coordinate a collection of potentially determinant confidence factors: technological and

transaction protocols, access to security standards, and usability. In an empirical analysis,

the direct impact of the factors on perceived trust, along with their indirect impact

through perceived security, is evaluated. The results insist on technical and transaction

procedures, and access to security guidelines being the most influential factors on

perceived trust of customers.

Michelle Renee D. Ching (2017) based on her study financial inclusion occurs as

only 42% of Filipinos have access to banks, which has led to the need for a more

productive and effective way of transmitting money. The cutting-edge invention of

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cashless payments spawned this. The e-Commerce company service was conceived

because of the invention of the Internet. The Philippines is still dependent with cash and

cheque mode of payments. This research study explores the factors that influences the

adoption of the currently available electronic payment systems. Daily work hours and

gender contributes to the adopted electronic payment system as well. Through this

research study, it affirms the government initiatives that it is improving the adoption.

Teoh et al (2013) their study aims to discover the factors influencing perception

towards electronic payment (e‐payment) from the Malaysian consumers’ perspective.

They used a self‐reporting questionnaire was developed and disseminated to 200

respondents, out of which 183 valid responses were considered for further statistical

analysis. They found out that The multiple outcomes of linear regression indicate that

benefits, self-efficacy, and ease of use have major impacts on the understanding of e-

payment by customers. The negligible results obtained for trust and security, however,

warrant further investigation.

According to the research study of Rachna and Singh (2013), the issues and

challenges in electronic payment system are (1) Lack of Usability, where the online

forms require a lot of information from users and using of complex website interface that

make it difficult for the users to adopt; (2) Lack of Security, when e-commerce becomes

a target for acquiring personal sensitive information and/or stealing of money due to

users having to provide sensitive information online, such as credit card details, not

knowing if its transmission is secured; (3) Lack of Trust, which is due to fraud, misuse,

and low reliability; (4) Lack of Awareness, when users avoid online mode of payments

and still prefer the traditional payment transactions; (5) Issues with cash, which is not
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widely used due to limitations of the user and the vendor should share the same bank that

offers e-Cash; (6) Users Perception Regarding Acceptance of Electronic Payment

Systems, which could be because of the neglect in the needs of both the users and

vendors; (7) Online Payments are not Feasible in Rural Areas, because people living in

the rural areas are mostly not literate and not educated on how to use computers, which

causes them to become unaware of technological innovations; and (8) Highly Expensive

and Time Consuming, this is for the vendor side, where setting up an online payment

systems would be costly, which include set up cost, machine cost, and management cost

among others than physical mode of payment (Rachna & Singh, 2013).

These past studies and the current study focus on Electronic Payment System and

how it changes the face of the world with the rise in Internet users and ease of access to

the virtual world of the Internet. E-payment systems are rapidly becoming a daring form

of payment because of its efficiency, ease and timeliness. New financial needs have been

generated by the advent of e-commerce that the conventional payment cannot be easily

met in many situations. Not to replace cash, but as a better alternative to cash and

exchange barter, the e-payment system was implemented, says Singh Sumanjeet (2009)

The study says each payment system has its advantages and disadvantages.

Study on Evidence of Firms' Perceptions Toward Electronic Payment Systems

(EPS) in Malaysia found that the extent of use of electronic cheques, smart cards, and

electronic cash is rather sluggish. Banks' service performance was found to be

satisfactory. Functionality, privacy, and security were important factors in predicting the

level of EPS use.

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Conceptual Framework

The conceptual framework depicted in Figure 1, shows the set of dependent and

independent variables of the study. The framework postulates the attributes of the

entrepreneur's status, ease of use, and factors that influence young professionals to use

EPS and cost of investment and challenges of hotel adoption directly affects the rate of

payment, protection, quality, efficiency, production and satisfaction of customers and

loyalty to the hotel.

Independent Variable Dependent Variable

Young Professional’s
characteristics;

Age, Profession, Gender and Electronic Payment

Number of years using EPS System as Preferred
Hotel Payment
Method of Young
Professionals from
Naga City
Ease of Use;
Security, Internet Speed,
features of EPS and
Convenience

Figure 1: Conceptual Framework

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Theoretical Framework

Stimulus Theoretical Framework for the novelty technology of the single platform

E-payment System indicates that design and security are the stimulus that represents the

system and features capabilities. The perceived ease of use and perceived usefulness are

the organism. These theories extends the 1996 version of Technology Acceptance Model

by including security factors and use the mediator with the direct and indirect relationship

of the factors and consumers' intention to use E-payment system.

Figure 2: Stimulus Theoretical Framework (Design and Security Stimulus Research

Theoretical Hypothesis) 
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CHAPTER III

RESEARCH DESIGN AND METHODOLOGY

This chapter includes the research methodology that outlines the research design,

research instrument, the data gathering process and data analysis tools to be used.

Research Design

This study will utilize a quantitative type of research, specifically, the descriptive

method. This method aims to collect quantifiable information to be subjected for

statistical analysis and further interpretation. The researchers will provide self-assessment

tools to the respondents to obtain the desired data. The retrieved data will then be

registered and analyzed to generate a general observation with regards to the focus of the

study.

Population and Samples

The researchers will be conducting the purposive sampling technique to a total

number of thirty (30) young professionals. Interviews will be conducted to selected

respondents to validate the data gathered.

Research Instrument

To determine the preference of the selected young professionals from Naga City,

the researcher will use survey questionnaire tool that will be use in collecting data

gathering. We will be formulating few questions that will be use in data validation.

Statistical Instrument

Descriptive Quantitative method design and Multi-stage sampling for data

collection, research instrument and statistical tools are used given:

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1. Frequency distribution, percentage and ranking method were used for the

profile of respondents to determine the young professionals preferred EPS as

hotel payment method.

For percentage computation:

P=

Where:

P - Percentage

f - Frequency

n – Total number of respondents

2. Weighted mean and ranking method is the reason why young professionals

choose Electronic Payment System as their hotel payment method.

The formula for weighted mean is:

WAM=

Where:

WM – weighted mean

F – Frequency

TWF – Weighted frequency

N – Total number of respondents

3. The researchers used ranking technique as a tool in order to know the value

from the highest to lowest. Ranking acquired by adding all the ranking given

by the respondents by total number of respondents. It was supposed to know

all the assessment of young professionals.

The formula for ranking:

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Where:

R1 – rank given by the first respondent

R2 – rank given by the second respondent

R3 – rank given by the third respondent

N – Total number of respondents

The study shall make us Likert scale table equivalent which will be the basis of

interpretation of the data (see table 1).

Point Scale Verbal interpretation

4 3.41-4.20 Always
3 2.61-3.40 Sometimes
2 1.81-2.60 Seldom
1 1.00-1.80 Never

REFERENCES
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Adeoti, O. & Osotimehin, K. (2012). Adoption of Point of Sale Terminals in Nigeria:

Assessment of Consumers' Level of Satisfaction. Research Journal of Finance

and Accounting.

Briggs, A. & Brooks, L. (2011). Electronic Payment Systems Development in a

Developing Country: The Role of Institutional Arrangements. The Electronic

Journal on Information Systems in Developing Countries.

Kaur, K., & Pathak, A. (2015). E-Payment System on E-Commerce in India. Karamjeet

Kaur International Journal of Engineering Research and Applications, 5(2), 79-87

A.N. Yaser, "An Introduction to Electronic Commerce", International Journal of

Scientific & Technology Research

Kabir MA, Saidin SZ, Ahmi A. Adoption of e-payment systems: a review of literature,

International Conference on E-Commerce, Kuching, Sarawak. 2015

S Fatonah et al 2018. A Review of E-Payment System in E-Commerce

https://iopscience.iop.org/article/10.1088/1742-6596/1140/1/012033

Sumanjeet, Singh, Emergence of Payment Systems in the Age of Electronic Commerce:

The State of Art (July 24, 2009). Global Journal of International Business

Research, Vol. 2, No. 2, 2009, Available at

SSRN: https://ssrn.com/abstract=1536620

Harris, Hezlin & Guru, Balachander & Avvari, Mohan V. (2011). Evidence of Firms'

Perceptions Toward Electronic Payment Systems (EPS) in Malaysia.

International Journal of Business and Information. 6.

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Mathew, Mary & Magnier-Watanabe, Remy & Vimalnath, Pratheeba & Balakrishnan,

Narayanaswamy. (2014). Assessing technology differences in electronic and

mobile payment systems among developed and developing countries.

International Journal of Innovation and Technology Management. 11.

10.1142/S0219877014500059.

Teoh, Wendy & Chong, Siong-Choy & Lin, Binshan & Chua, Jiat. (2013). Factors

affecting consumers' perception of electronic payment: An empirical

analysis. Internet Research: Electronic Networking Applications and Policy. 23.

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B hamid, Noor & Cheng, A.Y.. (2013). A risk perception analysis on the use of electronic

payment systems by young adult. WSEAS Transactions on Information Science

and Applications. 10. 26-35.

Barkhordari, Maryam & Nourollah, Zahra & Mashayekhi, Hoda & Mashayekhi, Yoosof

& Ahangar, Mohammad. (2017). Factors influencing adoption of e-payment

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Michelle Renee D. Ching (2017) Challenges and Opportunities of Electronic Payment

Systems in the Philippines retrieve from https://xsite.dlsu.edu.ph/conferences/dlsu

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ELECTRONIC PAYMENT SYSTEM AS PREFERRED HOTEL PAYMENT

METHOD OF YOUNG PROFESSIONALS FROM NAGA CITY

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Survey Questionnaire

Name (Optional): Age:

Gender: Profession:

Number of years using EPS:

Instruction: Using the 4 point scale shown below. Rate the following questions by placing a
check in the box. Please answer the question honesty. Do not leave each item unanswered.

Scale:

Never Seldom Sometimes Always

1 2 3 4

Questions 4 3 2 1
1. Do you use EPS when checking in to Hotel?
2. Do you find EPS helpful as hotel payment method?
3. Are the EPS website / application easy to use?
4. Is the EPS providing ease to satisfy your needs as a
customer?
5. Do you find using EPS gives you less time spent in
making your hotel payment?
6. Have you encountered security break while using EPS?
7. Is strong internet speed connection needed when using
EPS?
8. Are matters of security having significant influence in
doing your transaction?
9. Do you trust the system and process backing your
transaction?
10. Will you recommend EPS as hotel payment method to
your friends?

Comment or Suggestion: