An analysis of the factors influencing success of bank‐issued micropayment system in Taiwan

Abstract

PurposeThe point of sale (POS) e‐micropayment program is undergoing a revival in Taiwan. Local banks are co‐operating with organizations which have existing captive markets to issue e‐wallet smart cards. Such co‐operation reflects the restriction imposed by Taiwan's Banking Act and the very high density of convenience stores in Taiwan. The paper aims to help researchers and the program's operators to understand the dynamics influencing such a revival.Design/methodology/approachAn extended Post‐acceptance Model of IS Continuance incorporating network externality is used and the roles of factors such as perceived usefulness and network externality are determined through hypothesis testing.FindingsThe study shows that these programs have good potential to succeed even though consumers' choice on whether transport‐related or convenience store‐related card has highest potential to succeed differs in different parts of Taiwan. Network externality cannot be ignored and contributes to Taiwan consumers' choice on the program which has the highest potential to succeed.Practical implicationsThe paper's findings clearly advise the program's operators that their priority is to get more outlets to participate in these programs.Originality/valueThe paper shows how external factors such as regulatory restriction, retail structure affect the program's development and how the roles of network externality are subsequently affected.