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Acceptance Of Mobile Payment Technologies By The Travelers Visiting North Cyprus |
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Ali Öztüren Faculty of Tourism, Eastern Mediterranean University, Famagusta, North Cyprus |
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ABSTRACT
The mobile payment (m-payment) is one of the new means towards a cashless payment alternative. Moreover, Near Field Communication (NFC) technology is considered as the payment solution of the future. In this context, the smartphone has been perceived as one of the most suitable carriers of the m-payment and the NFC technology due to its high use by consumers and the important role it has taken in their daily activities. This study focuses on determining the effective factors for accepting mobile payment technologies by the travelers visiting North Cyprus.
This study on mobile payment technology was based on the Technology Acceptance Model (TAM) with the core set of elements perceived usefulness (PU), perceived ease of use (PEOU), and behavioral intentions (BI). The element of Actual System Use (ASU) was not being researched in this study. The sample of the 226 respondents was contacted with the convenience sampling method.
Results on the hypotheses of the TAM model deliver strong and significant values for the effects of PEOU on PU and PU on BI. On the other hand, PEOU does not play a statistically significant role in the respondents’ acceptance of mobile payment technology. In order to increase the perceived usefulness of the mobile payment, providers need to concentrate on strengthening positive trust perceptions of consumers. The perceived trust will facilitate their customers’ acceptance of the contactless m-payment technology. The satisfactory level of information should be provided on the security features of the payment device. The security precautions have to be discussed on various channels to enrich the element of trust and gain wider acceptance. One of the primary efforts can be building awareness about the mobile payment technology. There is a high influence of the awareness of consumers to their acceptance of mobile payment technology. Their awareness will bring the understanding of usefulness. The increasing speed and resulting convenience for the customer can be communicated in the awareness efforts.
Key Words: Mobile payment, Technology acceptance model (TAM), E-tourism, Trust
INTRODUCTION
The most important advantage of shopping with credit cards is the ability to make payments faster and more practically (Smartcard Alliance, 2016). The mobile payment system is also increasing its popularity among cashless payment methods. The smartphones that consumers carry them everywhere are creating opportunities for the extensive use of the mobile payment method.
The researches about expectations, perceptions, attitudes, and applications about mobile payment method is increasing day by day (Liébana-Cabanillas, Muñoz-Leiva, & Sánchez-Fernández, 2018; Ozturk, Bilgihan, Salehi-Esfahani, 2017; Wu, Liu, & Huang, L. 2017). The trendy key terms that were mentioned in these studies are mobile wallets, biometric payments, SMS payments, QR codes, mobile banking, and Near Field Communication (NFC). Among these, Near Field Communication technology seems to be taking place among the basic technologies of the present and future.
In a recent study, it is predicted that the 53% of worldwide Point of Sale purchases will be contactless until 2022 (Juniper Research, 2017). By 2020, 23 billion transport and event tickets will be bought with mobile devices (Juniper Research, 2016). In Europe, various examples of mobile payments technologies are existing in the market. Since 2014, Vodafone's SmartPass mobile payment technology, which is their introduction to mWallet, is very popular in Spain, Germany, UK, and Netherlands. Orange Money and Visa have made mobile contactless payment technology available in France. Telecom Italia will prompt propel of innovative mobile payment solutions crosswise over the Italy (European Payments Council, 2014).
According to the results of a research, mobile transactions in European destinations will be tripled until 2021 (Forrester Research, 2017). The aggregate number of check exchanges as an payment technique confronted a decay in the years of 2010 and 2015 in Europe. The mobile payment applications are recommended by European banks (Statista, 2018). According to the results of a research (ING, 2015), consumers prefer mobile payment technology because of its speed, easy usage, extensive access from different locations. On the other hand, the most important reasons that stop consumers to use the technology is lack of trust and experience (ING, 2015).
The aim of this study is to examine influencing factors for the acceptance of mobile payment technologies by the Turkish Cypriot travelers in their holidays.
LITERATURE REVIEW
The Technology Acceptance Model (TAM) enables researchers to make statements about possible acceptance or rejection of a new technology (Venkatesh and Davis, 1996; Venkatesh and Davis, 2000).
Figure 1: Technology Acceptance Model (TAM)
Source: Venkatesh and Davis, 1996, p. 453
Perceived Usefulness (PU) is defined as “the degree to which a person believes that using a particular system would enhance his or her performance” (Davis, 1989, p. 320). Perceived usefulness describes consumers' expectations that using m-payment will enhance the payment process. Perceived Ease of Use (PEOU) is defined as “the degree to which a person believes that using a particular system would be free of effort” (Davis, 1989, p. 320). The ‘Perceived Usefulness’ (PU) and the ‘Perceived Ease of Use’ (PEOU) lead to the ‘Behavioral Intention to Use’ (BI) and then the Actual Use of the Technology.
Research Hypotheses
By considering the constructs within the Technology Acceptance Model, the following research hypotheses have been developed. Accepting mobile payment technology on behalf of the PU is related to a positive ratio of individual benefit and participation. Acceptance on behalf of the PEOU is related to a simple process with low subjective involvement that results in a favourable benefit-participation ratio.
The consideration to choose a mobile payment instrument is expected to be influenced by both elements, PEOU and PU. It is anticipated that the ease of handling also influences the usefulness of mobile payment technology. Customers might enhance the usefulness of the technology, once the simplicity in its handling becomes the dominant factor.
The level of usefulness is an important factor for considerations of a customer whether to use or refuse a technology. The higher the level of perceived usefulness, the higher might be the intention to utilize a technology.
Furthermore, in case of a payment instrument, the technology has to be simple and quick in the handling process, to get a user to accept the technology. The easier a technology is to be handled, the more likely will users accept it. An interesting factor is the importance of the relation between the PU and BI in contrast to the importance of PEOU on BI.
H1: PEOU positively affects the PU.
H2: PU positively affects the BI.
H3: PEOU positively affects the BI.
Figure 2: The Research Model and Hypotheses
Perceived Trust towards mobile payment technologies and awareness about mobile payment technologies have been selected as “external variables” affecting the perceived usefulness and perceived ease of use.
Trust in general is a significant antecedent of participation in commerce. Trust correlates significantly with the perceived usefulness (Aghdaie, Fathi, and Piraman, 2011). According to the above mentioned factors in the market researched (for example ING, 2015), trust has been perceived as one of the most important variable influencing perceived usefulness and ease of use of the technology. In the light of these perceptions, the following hypotheses have been constructed.
H4a: The perceived trust towards m-payment technology positively affects the perceived usefulness of the technology.
H4b: The perceived trust towards m-payment technology positively affects the perceived ease of use of the technology.
The awareness about the technology influences the acceptance of the technology in general (Lee, 2009). A consumer, who has already gathered information on a mobile payment, by either possessing a mobile payment-enabled smartphone or reading about it, might have a different PU/PEOU than a customer without awareness.
H5a: Awareness about m-payment technology positively affects the perceived usefulness of the technology.
H5b: Awareness about m-payment technology positively affects the perceived ease of use of the technology.
RESEARCH METHODOLOGY
This study on mobile payment technology is based on Venkatesh & Davis’s (1996) core set with the elements of PU, PEOU, and BI. The element of Actual System Use (ASU) is not being researched in this study. ASU cannot be measured in the context of mobile payment technology by now, as the technology is currently only available to a few customers; furthermore, there are no/limited numbers of card terminals at retailers.
Research Instrument
Items of the constructs were adapted from previously validated instruments (Davis, 1989; Nambisan et al., 1999; Vankatesh, 2000; Luarn and Lin, 2005; Parasuraman et al.; 2005; Shin, 2009) in the context of the technology acceptance model.
Table 1 Constructs and Items of the Research Instrument
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Constructs of the Model |
Items |
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Perceived Usefulness (PU)
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Using mobile payment technology will be very useful to my life in my holiday. Using mobile payment technology will helpful to improve my performance in my holiday. Using mobile payment technology will helpful to enhance effectiveness of my life in my holiday. Using mobile payment technology in my holiday will provide very useful service to me. |
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Perceived Ease of Use (PEOU) |
I find mobile payment technology clear and understandable. I find it easy to get mobile payment technology to do what I want them to do. I find mobile payment technology do not require a lot of mental effort. I find mobile payment technology easy to use. |
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Behavioral Intentions (BI) |
I intend to transact with mobile payment technology in my holiday. I intend to use mobile payment technology as much as possible in my holiday. I recommend others to use mobile payment technology in their holidays. |
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Perceived Trust |
The risk of an unauthorized third party overseeing the mobile payment process is low. The risk of abuse of usage information (e.g., names of business partners, payment amount) is low when using mobile payment technology. The risk of abuse of billing information (e.g., credit card number, bank account data) is low when using mobile payment technology. I would trust mobile payment technology in conducting my payment transactions. |
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Awareness about the Technology |
I am aware of the functions and capabilities of mobile payment technologies. |
The 226 respondents were contacted with the convenience sampling method. The face-to-face survey took place at the Ercan Airport, North Cyprus.
FINDINGS AND DISCUSSION
Table 2 Demographic Profile of the Respondents
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Measure |
Frequency |
Percentage |
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Age (years) |
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18–27 |
23 |
10.2 |
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28–37 |
72 |
31.9 |
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38–47 |
46 |
20.4 |
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48–57 |
44 |
19.5 |
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58–67 |
28 |
12.4 |
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Higher than 67 |
11 |
4.9 |
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Missing |
2 |
0.9 |
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Gender |
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Male |
137 |
60.6 |
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Female |
89 |
39.4 |
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Education |
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Primary |
18 |
8.0 |
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Secondary |
104 |
46.0 |
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Bachelor |
81 |
35.8 |
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Master |
19 |
8.4 |
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PhD |
4 |
1.8 |
Internal Consistency
In order to examine the internal consistency of each set of indicators, Cronbach’s Alphas were calculated for PU, PEOU, BI, Perceived Trust, and Awareness about the technology (Cronbach, 1951). All five constructs exceeded the critical level for acceptance of .70 (Nunnally, 1978; Nunnally & Bernstein, 1994; Cohen, Cohen, West, & Aiken, 2003; Hair et al., 2006).
Table 3 Cronbach’s Alpha Results for the Constructs
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Constructs |
Alpha |
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Perceived Usefulness (PU) |
0.78 |
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Perceived Ease of Use (PEOU) |
0.83 |
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Behavioral Intentions (BI) |
0.71 |
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Perceived Trust (Trust) |
0.87 |
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Awareness about the Technology (Awareness) |
0.74 |
Hypothesis H1 was confirmed by the survey; PEOU strongly influences PU positively (β = 0.62, p<0.01). The communication of advantages addressing the simplicity of the new technology is of high importance for an increasing PU of customers.
Hypothesis H2 has been confirmed by the survey results. A high regression weight (β = 0.74, p<0.01) in the model indicates that the usefulness is of major importance to customers’ behaviours. Therefore, a communication of the individual benefits of the technology is essential to address customers and increase the numbers of consumers for accepting the technology. The element of usefulness should furthermore be addressed by enriching the experience with extra benefits and incentives, such as the additional checkout line, self-service desks or other personal benefits offered to m-payers. Customers need to understand their advantages of utilizing the new technology. In simple words, “no customer will use mobile payment technology if she/he cannot see a personal benefit from this technology.”
The regression weight (.161) for the hypothesis is positive, but not statistically significant (p =.272) in the model. The effect of perceived trust on the perceived usefulness of m-payment has been found as significant (β = 0.63, p<0.01). On the other hand, according to the results of the regression analysis perceived trust does not affect the respondents’ perceived ease of use of the m-payment technology. In the light of these results, H4a has been accepted, but H4b has been rejected.
According to the results of the study, awareness about mobile payment technology is a significant determinant for both PU (β = 0.64, p<0.01) and PEOU (β = 0.44, p<0.05). M-payment was perceived as useful and easy to use for the consumers who are aware of the technology. Therefore, companies need to recognize implications of distributing relevant information on the technology; first, they need to orient their marketing efforts on informing the consumers about the technology.
Conclusion
The results of the hypotheses of the TAM model deliver strong and significant values for the influence of PEOU on PU and PU on BI. On the other hand, PEOU does not play a statistically significant role in the respondents’ acceptance of mobile payment technology.
In order to increase the perceived usefulness of the m-payment, providers need to focus on strengthening positive trust perceptions of consumers. The perceived trust will facilitate their customers’ acceptance of the contactless m-payment technology. More detailed information should be provided on the security features of the payment device. Security precautions have to be discussed on various channels to enrich the element of trust and gain wider acceptance.
One of the primary efforts can be building awareness about mobile payment technology. There is a high influence of the awareness of consumers to their acceptance of mobile payment technology. The awareness will bring the understanding of usefulness. The increasing speed and resulting convenience for the customer can be communicated to the awareness efforts.
The generalization of the study findings is limited due to the use of convenience sampling. Future studies, which target probability-sampling method based samples in Cyprus and in other destinations, may provide further insights on the subject. The existing research model should also be extended by the addition of other variables and integration with other constructs. Despite these limitations, the present empirical study can be helpful for academics, industrial applications, and instructors in the area of mobile payment technologies and for the tourism and hospitality management education programs.
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