Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Understanding of Factors Influencing User Acceptance of Mobile Payment System

Arshia Iqbal

Karachi University Business School , University of Karachi

Research Methodology

Prof. Raja Rab Nawaz

July 20, 2021

 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Abstract

In this paper we will learn about mobile transaction carried out for online shopping

involve high level of risk and require substantial level of trust. The research paper tries to

identify possible perceived risks that customers feel while buying from e- commerce websites.

Seven identified risks explain in this study, Among e-users impact of performance and financial

risk were significant . a survey was conducted with a sample size of 80 online shoppers among

consumers who previously purchased online and mainly from the main popular online stores.

The study revealed that financial risk, security risk and information security risk negatively

impact online shopping behavior it provides marketers with the importance of consumers risk

perception in order to adopt adequate risk-reduction strategies in the internet shopping

environment.

Keywords: e - users, perceived risks, e-shopping, purchase intention

 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Understanding of Factors Influencing User Acceptance of Mobile Payment System

As the time moves we are entering into the new era of business and creativity and

innovations and in particular marketing, it offer new opportunities for both manufacturer and

retailers to reach potential consumers in more diligent way all individuals in every business field

have believed that there have been some initiatives and new ways that have great positive

impacts on their business .The Internet is becoming an increasingly popular medium to facilitate

information search, choice, and purchase. Business-to-consumer (B2C) e-commerce involves the

use of the Internet to market and sell products and services to individual consumers. Reasons for

shopping online have been cited for time efficiency, avoidance of crowds, and 24 hour shopping

availability (Karayanni, 2003) .Bhatnagar and Ghose (2004a; 2004b) investigated the impact of a

couple of shopping advantages and chances and reasoned that customers were more worried

about web ascribes associated with perceived risks than web attributes associated with benefits.

However, their research included only one benefit—convenience. Therefore, it is assumed that

people may feel a certain degree of risk when buying a product through the Internet. For

example, consumers are worried that the Internet still has very little security with respect to using

their credit cards and disclosing personal information or concerned about buying a product from

sellers without physically analyzing the products (Pallab, 1996). Electronic commerce magnifies

the uncertainties that are involved with purchases through the Internet. The e-market space can

be sort out into many segments such as online retail, online travel, online financial services,

online digital and online other services. The focus of this paper is to identify the risks perceived

by online customers, It helps in explaining not only do consumers face risk during online

shopping, but explains the kind of risks consumers face when e-shopping.
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Existing research examine the importance of e-payment as a medium to communicate

and deliver services to consumers (Kerem, Lustsik, Sorg, & Vensel, 2003). Shin (2010) suggests

that alleviating the risk factor will expand retailers' effective execution of the e-payment system.

In the event that these worries of safety and hazard are not tended to, customers will be hesitant

to receive the framework for their dynamic

Literature Review

Perceived Risk

Risks assumes a fundamental part in customer conduct, and it makes an important

commitment towards clarifying data looking through conduct and shopper buy dynamic. Despite

the benefits of e-commerce over traditional commerce and optimistic predictions for future

growth of e-shopping, negative angles related with this shopping technique are likewise

becoming basic (Ko et al., 2004). Subsequently, Risks discernment can be considered as a

conviction about the likely unsure adverse results of a conduct and the outcome ascribed to that

misfortune.

In the e-shopping background, the level of perceived risk may be misrepresented because

of restricted actual admittance to items and deals faculty (Forsyth & Shi, 2003). Human

perceptions are fundamental arrangement behind the manner in which any individual acts. Their

decisions, expectations and conduct are set off by their discernments. to learn about the

purchaser conduct it is important to distinguish the impression of buyers. this way it will be

significantly simpler for sellers to fulfill and examine the customer inner parts.

In simple words, Risks hazard is only seen vulnerability with respect to adverse result of

utilizing items and administrations.

 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Past investigations have contended that the accompanying kinds of dangers are typically

implied in buy choices: financial risks, product risk, convenience risk, health risk, quality risk,

time risk, delivery risk, after-sale risk, performance, psychological, social, and privacy risk,

website design style and characteristics, and trust in the site influence altogether online

customers' buying conduct (Martin and Camarero, 2009; Almousa, 2011; Javadi et al., 2012;

Zhang et al., 2012). This research purposes six important perceived risk variables such as

(financial risk, performance risk, time risk, psychological risk, Privacy risk, Ease to use and

security risk), influencing buying conduct were picked in this exploration model as indicated by

conventional writing on them, and the experimental proof got from online stores specialists and

clients.

Financial Risk

Financial Risk implies the potential financial expense related with the underlying price

tag just as the resulting upkeep cost of the item. Financial risk is the most important perceived

risk while transacting [Cunningham S. (1967), Stone & Grønhaug, (1993), Bhatnagar et al.

(2000), Crespo et al. (2009), Jacoby and Kaplan (1972), Peter and Ryan (1976), Ingene and

Hughes (1985), Almousa, M. (2011), Zhang et al (2012), Candra, R. M., Iahad, N. A. (2013) &

Moudi Almousa (2014)].

The dangers incorporate apparent dread of abusing financial and individual information

shared by the client on the site and abuse of Visa data without formal endorsement from the

client. This Risk is related with the conviction that purchasers are frightened that their Visa

number will be taken, their balances will be hacked, and their own record will be damaged and

so on.
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Security Risk

Security risk is the likelihood that online organizations gather information about people

and use them mistakenly and without approval. This information security factor can be exploited

sufficiently depending on e-retailers’ ability to meet customers’ expectations in the e- shopping

environment (Chang and Chen, 2008)

In any case, numerous specialists say portable installment strategies offered by significant

suppliers are safer than actual cards and money. This is on the grounds that portable wallets use

strategies, for example, encryption and tokenization to cover installment card account numbers

when you enter them and when you pay. ( (Forsyth & Shi, 2003)find that despite the fact that

security concern was a more than once referred to justification not accepting on the web, it

doesn't definitely influence the event of online buys

Privacy Risk

While buying items/administrations from internet business sites, clients share individual

and monetary data like telephone number, email, credit/check card subtleties and private data.

They fear use of this information without their knowledge or permission [Crespo et al. (2009),

Jarvenpaa and Todd (1997) Featherman and Pavlou (2003), & Moudi Almousa (2014)].

In e - commerce, protection of web based business clients is abused when without

educating the client, their buying propensities are followed by the organization for offering new

items or administrations.
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Time Risk

While picking desire items or administrations, customers need to go through different strides

from need distinguishing proof, elective ID and assessment to real buy and figuring out how to

utilize the item.

Every wrong choice made wastes time, which includes redoing the entire transaction process and

relearning about new products and services [Cunningham S. (1967), Peter and Ryan (1976),

Ingene and Hughes (1985), Candra, R. M., Iahad, N. A. (2013), Moudi Almousa (2014)].

Psychological Risk

This risk suggests that the choice or execution of the item will negatively affect the

purchaser's significant serenity or self-discernment. Age, sex, work-direction be that as it may do

somely affect the online customers. Fundamentally the work arranged individuals and more

established individuals use web for work purposes or for correspondence with their family

members abroad. Most females are noticed utilizing web in the quest for cooking formula or for

the examination in design brands. Adolescents and youthful grown-ups are found to utilize web

for their examinations or amusement purposes. these discernment distinction of web likewise

impacts enormously on the internet shopping conduct.

This risk likewise remembers distress and antagonistic effect for mental harmony when

the client isn't content with the buy and wants for a substitution or return. Grumblings to the

internet business organization and client care division not the slightest bit settle the issue.

Ease to Use

One of the most important constructs is perceived ease of use which means “the degree

to which individuals believe that utilizing a specific technology would be free of effort both

physical effort and mental effort” (Davis, 1989). the fundamental purposes for the presentation of
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

conduct of people are the aims that create from people accepts and mentalities towards

innovation. Consequently, m-payments reception or use is principally relying upon the

expectation to embrace or utilize m-payments frameworks.

Performance Risk

The fundamental purposes for the presentation of conduct of people are the aims that

create from people accepts and mentalities towards innovation. Consequently, m-payments

reception or use is principally relying upon the expectation to embrace or utilize m-payments

frameworks. it is the ability of the product to perform its basic function and deliver the value as

per the promise made [Jacoby and Kaplan 1972, Peter and Ryan (1976), Ingene and Hughes

(1985), Andrade (2000), Cunningham et al. (2005), Cunningham S. (1967), Stone & Gronhaug

(1993), Almousa, M. (2011), Candra, R. M., Iahad, N. A. (2013), Moudi Almousa (2014)].

Purchase Intention

There is some noticed affirmation for a positive relationship between client loyality and

buy expectation. Restated, in the online climate, If clients have gotten a palatable help from

administrations supplier are probably going to show positive social aim(Zeithaml et al., 1996)

Mou et al. (2017) posit that consumer trust beliefs constitute a significant driver of e-

commerce adoption. Chong et al. (2018) stress that buyers' apparent viability of institutional

instruments negatively directs online confidence in retailers and repurchase expectations.

Sullivan and Kim (2018) demonstrate that trust, social business reception, and item

assessment factors are fundamental in molding repurchase aim: seen quality is controlled by the

grips of serious cost and site notoriety, which in this way affect apparent worth, that, along with

site notoriety and saw hazard, shape online trust, which follows up on repurchase expectation.
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Sullivan and Kim (2018) also indicate that perceived value affects the experiences of online trust

among purchasers and their commitment to buy again from the same website.

Conceptual Framework

Fig 1.0 demonstrates the proposed framework that includes all these seven constructs and

supposes that these constructs are the main factors may affect the purchase intention to adopt the

mobile payments.
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Method

Measurements, Data Collection and Sample:

To examine the hypotheses and the effects of demographic factors on the usage of m-

payment, a sample of 80 potential m-payment users was analyzed. The data was collected

through online google form to students, house wives and job persons. One hundred

questionnaires were distributed to respondents; however, only 80 valid responses were received

and used for the analysis, representing an effective response rate of 80%.

A structured paper-based questionnaire was used in the research. The items measuring the

elements were adapted from previous related studies. The items measuring perceived risk

variables and first- order variables were adapted from Featherman and Pavlou (2003), Kim, Kim

and Leong (2005), and Rotchana kitumnuai (2007).

Data Analysis and Results

In order to examine the study’s hypotheses, path analysis was used to analyze the

relationships between perceived risk (independent variables) and Purchase Intentions measures

the dependent variable. The hypotheses and results are below:

 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Hypothesis 1: The perceived performance risk has a negative effect on online shopping.

Hypothesis 2: The perceived financial risk has a negative effect on online shopping.

Hypothesis 3: The perceived time risk has a positive effect on online shopping.

Hypothesis 4: The perceived psychological risk has a negative effect on

Online shopping.

Hypothesis 5: The perceived privacy risk has a negative effect on online shopping.

Hypothesis 6: The perceived security risk has a positive effect on online shopping.

Hypothesis 7: The perceived ease to use has a positive effect on online shopping.

Hypothesis 8: The perceived purchase intention has a positive effect on online shopping.

Reliability And Validity

Convergent validity was tested for research model. That was examined through factor

loadings, composite reliability (CR) and average variance extracted (AVE) (Hair et al., 2013; Ali,
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

2016). With the minority exceptions, all loadings of items exceeded the minimum recommended

value of 0.7 as presented in Table 2 (Hair et al., 2013). AVE reflects the overall amount of

variance in the indicators accounted for by the latent construct, also exceeded the minimum

recommended value of 0.5 (Hair et al., 2013; Ali, 2016).

Table 4 demonstrates the path coefficient values, which are linked to the suggested

hypothesis and this hypothesis are determined by the PLS bootstrapping analysis. The value,

which equals to 1.96 or more, must be the value of the rule of thumb as (Hair et al., 2015) is T

statistic and this value is equivalent to the significant value of 5% or lower. The researcher

approves the seven suggested relation H1, H2, H3, H4, H5, H6 and H7. The positive relation

between E2U and BI (Beta = 0.26; T-statistics = 2.4) is suggested by H7. The negative relation

between FR and PER of mobile banking adoption

 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

(Beta = -0.15; T-statistics = 1.35) is suggested by H2. The positive relation between PER

and PI of mobile banking adoption (Beta = 0.50; T-statistics = 5.11) is suggested by H8. The

negative link between PHY and PER of mobile banking adoption (Beta = -0.17; T-statistics =

1.80) is suggested by H1. The negative link between PRV and PER mobile banking adoption

(Beta = -0.004; T-statistics = 0.310) is suggested by H5. The positive link between SR and PER

mobile banking adoption (Beta = 0.32; T-statistics = 2.99) is suggested by H6. The positive link

between TR and PER mobile banking adoption (Beta = 0.09; T-statistics = 0.83) is suggested by

H3.

It is shows that TR has a great positive impact on mobile banking usage because the it

has included all seven hypotheses and they have a sufficient level of significance at 1%. SR is

the priority of the factors that determine the usage variance, but PHY , PRV , PR , and FR

influences e- mobile payments negatively.

 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Theoretical Model Validation:

The path diagram shows the relationship between variables of the model and purchase

intention. A solid relationship of items with their constructs was seen in the complete model

estimated by the SmartPLS software, since the elements shown were factorials (Fig. 2). The

meaning of these components was assessed by the bootstrap strategy with similar number of

cases in the example. The result of the test of significance of the theoretical model (p-value)

revealed the need to remove the PR , FR , PHY , PRV construct, since its relationship with the

variable Purchase intention was not significant (p value >0.05).

With the removal of these variable the final model was obtained (Fig. 3). All the

constructs presented greater values to the level proposed by Chin (1998) for evaluation of the
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

measurement model which is 0.7 for composite reliability (Table 3). Besides, they presented

convergent validity, with AVE (average extracted variance) above 0.5 (Fornell & Larcker, 1981)

and discriminant validity, with validation through the basis of cross-loads, where each elements

showed greater factorial load for the construct to where it belongs.

Discussion

On the whole, the constructs performance expectation; effort expectation; social

influence and perceived risk explained 20.7% (R2) of the variance of intention of adoption of

mobile payment.

After the elimination of the perceived cost construct of the fitted model, ease to use

indicated the positive relationship of greater weight (+0.320) with the intention of adoption of

mobile payment. Greater the risk perceived, the lower the intention of adopting the new product,
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

which is in line with research that showed these variables as two of the main determinants of

intention of choose and use of the technology (Martins et al., 2014; Zhou, Lu, & Wang, 2010).

The Security risk is present, but without great emphasis, given the maturity and security

provided by traditional means of payment, such as credit and debit cards.

As to security risk (SR), the result also demonstrated its positive relationship with the

purchase intention (PI) in the study (+0.318).

What must be taken into consideration is that mobile payment as a process is still

unavailable in large scale , that is the respondents do not have references to evaluate

Conclusion.

The empirical evidence we reviewed supports the belief that social platform clients' buy

expectations can be established considering the connection between online trust and saw hazard.

Restricted examination has considered consumers decision-production measures on friendly

trade stages by researching how their perceptual perspectives, social goals, and prompt delights

influence the acquisition of items and administrations on the web.

Through this research I become acquainted with different part of risk that impacts straight

forwardly or by implication on online shopper purchasing conduct.

Perceived risk is an important factor for e-buyers and it is necessary to be learn to know

the decision making criteria of buyers. Performance risk and financial risk , Psychological risk

and privacy risk goes to the relationship online consumer buying behavior and these

relationships indicates that these risks must be low in order to get more and positive e-buying

behavior.
 Understanding of Factors Influencing User Acceptance of Mobile Payment Systems

Time and security risk goes to the relationship that indicates that lesser the risk greater

the positive buying response expected from online buyers. Whereas, ease to use indicates that

greater the internet experience greater positive response is expected from online buyers.

With a strong comprehension of m-payment system, buyers can survey the danger

implied in utilizing it. A specific level of knowledge should be set up preceding understanding

the danger parts of utilizing m-payments. In fact, Laroche and Nepomuceno (2010) con- tended

that prior knowledge helps establish the level of risk. The result supports their contention when

applied to e-payment.