The barriers to Adoption of a Cashless Economy in South African Informal Markets: consumers’ perspective

Abstract

This study aims to enhance the Unified Theory of Adoption and Use of Technology (UTAUT2) by integrating security and privacy concerns associated with cashless payments (CLP). The research investigates impediments to adopting cashless payments in the informal sector among South African consumers. Data was collected through an online survey administered to South African informal sector customers using a quantitative approach. Four hundred and seventeen participants contributed, yielding three hundred and twenty-five usable responses for testing the research hypotheses. Structural Equation Modelling (SEM) via Analysis of Moment Structures (AMOS) was applied for data analysis. The findings reveal that Perceived Trust (PT) and Perceived Risk (PR) exert the most significant influence on the adoption of cashless payments. Social Influence (SI) also demonstrates a statistically significant impact on this adoption. Conversely, Performance Expectancy (PE), Effort Expectancy (EE), Price Value (PV), and Habit (Ht) exhibit statistically insignificant associations with this adoption. To create a more comprehensive model for determining cashless payment adoption in the informal sector, the researchers modified UTAUT2 by incorporating consumers' perceived trust and risk. Notably, there is limited research on adopting cashless payments within the context of the informal sector. The research findings hold implications for policymakers, banks, and fintech companies, offering insights into the factors contributing to the sluggish adoption of CLPs in the informal sector. This understanding can guide the design of appropriate solutions to address consumer concerns regarding using CLPs in the informal sector, facilitating a successful transition towards a cashless economy