Determinants of mobile payments adoption in retail organizations

: a multi-perspective study and assessment framework

Abstract

Mobile payment is one of the hottest technologies for transactions in today's retail industry. This new form of electronic transactions made using mobile device seems to be growing rapidly and looks promising as an alternative payment instrument. The concept behind mobile payments is generally accepted but the market remains largely fragmented filled with emerging technologies and new transaction models. Precisely when this will become widely available and how the industry will get there is still unclear. Prior research mostly focuses on technology innovation or consumer-centric view while there is a scarcity of research related to merchant attitude towards adoption. Noticeably missing from the literature is a systematic framework to diagnose and analyze the determinant factors that impact retail merchant adoption subject to influences within and outside the retail organization. This study aims to develop a holistic understanding of the factors influencing mobile payments adoption in retail organizations through a multi-perspective approach. First, the supply-side views were examined through a qualitative survey with 21 industry experts to probe how well mobile payments are perceived by the industry. Next, the end-user preferences were explored through conducting focus group interviews with 47 participants in 5 groups to elicit the consumer attitude towards use of mobile payments. Quantitative survey based on a valid sample of 105 retail merchants was then used to empirically assess how the merchant adoption decisions for new transaction technology may be influenced by the interplays of managerial perceptions, market drivers and organizational enablers under a multi-actor environment. Results from the expert survey reinforce the view that both market drivers and organizational enablers play critical roles in influencing the adoption intent and implementation effectiveness. Key findings from the focus groups indicate the need to enable those facilitating conditions such as wide merchant coverage and multi-operator interoperability which are found to impact the pace of adoption. Analysis of the empirical data from the quantitative survey was based upon the SEM technique. A two-step procedure was used to validate the measurement model and then investigate the strengths and relationships among the theoretical constructs of the structural model. Findings indicate that perceived usefulness and marketing orientation have a statistically significant influence on managerial attitude toward use, and the influence of perceived ease of use on perceived usefulness is also significant. The hypothesized relationship between organizational intention to use with three constructs - attitude toward use, implementation practice and provider facilitation are all supported. Implication of the results indicates the attitudinal variables postulated by TAM model are mostly useful in predicting new technology adoption like mobile payments. It is also shown that marketing orientation is found to be the most significant predictor for adoption intent which implies the importance to focus on the organization-wide generation of intelligence about current and future market needs across multiple channels. Furthermore, innovation culture is found to impact both the marketing orientation and implementation practice which implies the need to foster an organizational culture that can support effective learning, collaboration and implementation. Moreover, integration with additional control variables related to implementation practice and provider facilitation helps to present a more comprehensive understanding of the organizational adoption requirements. Based on the overall research findings, the TEMPA framework was developed which can serve as a blueprint for retail merchant to develop more effective adoption roadmap for mobile payments. This novel framework consists of eleven interrelated building blocks that show the logic of how a merchant determines the adoption of mobile payments in a holistic transaction environment. Each building block associates with a set of critical determinants derived from this study which may impact the adoption decisions. Collectively, these building blocks represent the different dimensions and orientations when adoption decisions are being made. The TEMPA framework provides a combined view of both attitudinal-based and capability-oriented considerations of a retail organization when approaching a new transaction environment such as mobile payments. Feasibility of this framework was pilot tested and validated by using three exemplary cases. Pilot results indicate the framework is well-received as useful and applicable to help retail merchants identify the most suitable business model and specific areas that require improvement in order to best exploit the value proposition of mobile payments.

Date of Award	16 Jul 2012
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Kong Bieng CHUAH (Supervisor)