The behavioural intention to adopt Digital Financial Services in South Africa

Abstract

South Africa has made significant progress towards expanding financial services by using digital technologies, with 81% of the population above sixteen years of age having formal bank accounts. Despite this significant increase, it still remains a cash-dependent country. The owners of these bank accounts use them as mailboxes, with 40% found dormant for low-income households. This phenomenon indicates that the adoption of the Digital Financial Services (DFS) tools (bank cards) is low. Social grant recipients are found to follow this trend, with 58% using their accounts as mailboxes, while 2% are considered dormant. This study set forth to examine a set of factors (enablers and inhibitors) that were likely to predict DFS tool adoption intention behaviour, using the Unified Theory of Use and Acceptance of Technology (UTAUT), Technology Readiness Index, and the Resistance Theory of Innovation to underpin a conceptual model comprising seven “facilitators” and three “barriers” as identified potential determinants.

Quantitative analysis methods were used to test the conceptual model by surveying social grant recipients (n = 215) from the King Sabata Dalindyebo (KSD) Local Municipality in South Africa’s Eastern Cape Province. Findings showed that five enabling factors, namely performance expectancy, effort expectancy, perceived value, price benefit, and trust, were significant predictors of behavioural intention to adopt DFS. Contrary to observations from the existing literature on DFS adoption, all three inhibiting factors, namely perceived cost, unavailability of facilitating conditions and perceived risk, were not found to be significant predictors of behavioural intention to adopt DFS.

The study found that among study participants, facilitating factors significantly influenced behavioural intention to adopt DFS barring facilitating conditions and network externalities. The barriers were all found not to have any significant effect on the behavioural intention to adopt DFS. These findings aligned with existing literature on DFS and “fintech” adoption in emerging economies. The study also highlighted the importance of trust and communication between service providers and consumers to drive DFS adoption in South Africa