Factors determining the use of mobile devices to make Near Field Communication payments in South Africa

Abstract

The South African industry is facing new competitive challenges when it comes to means of making payments. Banks and payment services providers are constantly working on innovative ways to assist customers in making payments. Technology pays an important role in this regard as means of making payments has evolved from cash to card transactions and electronic funds transfers. Factors such as the time it takes to make a payment at a point of sale, the security of the mechanism that is used to make the payment and usability of the technology are challenges that new payment technology needs to overcome for it to appeal to customers. A new means of making payments at a point of sale uses Near Field Communication (NFC) thorough mobile phones. This research focuses on individuals that pay for goods and services at point of sales and what factors would influence them to adopt this way of making payments. The customers selected to participate are currently banked with one of the big five banks in South Africa: ABSA, Standard Bank, First National Bank, Nedbank and Capitec. A review of the literature on the adoption of technology by individuals highlighted three key drivers, which are: perceived usefulness, perceived ease of use and perceived security. The extent to which these affect the adoption of a new technology was evaluated by 84 respondents, which were asked to rate the importance of these drivers in terms of their adoption to the using their mobile devices to perform NFC payments at a point of sale. A linear analysis was used to analyse the results of the quantitative survey and determined the importance of each of the drivers that influence individuals to adopt new technology. Individuals perceive NFC payments to be useful and easy to use but security came out as the most influential driver when it comes to individuals adopting the use of NFC through their mobile phones to make payments. Recommendation are made on the industry can be improved to influence the use of NFC payments at point of sales.