Barriers to the adoption of mobile payment services in South Africa
Date
2014-01-08
Authors
Schreiber, Pamela
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Abstract
the low adoption of formal banking products presents a unique opportunity for
companies to offer simple and accessible banking products that make use of new
mobile phone technologies. There remains a large part of the adult population
that is potentially well suited to mobile transactional banking that is vastly different
from the historical methods of banking.
The purpose of this research was to understand the barriers leading to the slow
adoption rate of new mobile technology services within South Africa. This study
was focussed within the mobile financial transaction sector where there are many
new parties entering the market attempting to take advantage of the high cell
phone penetration levels and new technologies within the cellular phone industry.
This study was specific to new financial services not linked to current banking
structures that are either targeted at the unbanked or at current banking users as
an alternative to historical banking models.
An online questionnaire was used for data collection from respondents who had
either previously used, currently use or had never used mobile banking services in
order to understand their habits. A total of two hundred and thirty-seven
questionnaires were completed and twenty-six were excluded due to being
incomplete. The total sample size of the useable questionnaires was two hundred
and eleven. There were one hundred and six respondents in target group one
(current users), fifty-two respondents in target group two (previous users) and fiftythree
respondents in target group three (never used).
The demographics of those users who are likely to use mobile banking services
as suggested by the survey are more male than female, are between the ages of
twenty-one and thirty-nine and have at least finished school.
Factor analysis was run on the data collected from the questionnaires and it was
concluded that the factors that were initially proposed were indeed factors
influencing the adoption of mobile banking services in South Africa. The factors
were Value and Usefulness, Security, Technical Knowledge and Ease of Use. In
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addition to these factors, it was shown that Cost was an additional barrier that
affected adoption.
The analysis showed that the service needs to deliver an unmet need of the user.
If the user finds value in the product and it is better to use than alternative
products, then it will be adopted. Costs relating to banking as a whole can be a
large barrier to adoption. Companies need to ensure that both their setup and
ongoing costs are kept minimal, while making it clear in their marketing that this is
the case.
The product needs to be easy to use while not requiring a lot of effort. Support
needs to be given to users throughout the product life cycle while ensuring that
the registration processes is efficient in order to get their target market using in the
first place. The combination of ease of registration and negligible ongoing
complexities will ensure that users will continue to make use of their services.
To ensure ongoing usage of mobile banking services, organisations need to instil
a sense of confidence on their users. Being able to use all features of the product
allows users to gain this assurance and will, therefore, continue to use the
product.
Finally, it is crucial that users believe that their financial information is in safe
hands. Trust has to be gained firstly in the company itself, then in the service.
Taking head of the demographic profiling together with the factors influencing
mobile banking service adoption will allow organisations wishing to enter the
market or increase their market share within South Africa to create a strategy to
be successful in the future.
Description
MBA thesis
Keywords
Mobile payments