UNDERSTANDING PERCEIVED RISKS IN PROXIMITY MOBILE PAYMENT ADOPTION IN SOUTH AFRICA AND THE MEDIATING EFFECT OF PERCEIVED VALUE

Michael Humbani

doi:10.32479/irmm.11814

Abstract

The purpose of this study is to empirically test the relationship between perceived risk factors and adoption of proximity mobile payments, and to explore the mediating effect on perceived value. Using a descriptive research design, an online self-administered questionnaire was used to collect data from 297 users of proximity mobile payments in South Africa. Confirmatory factor analysis using Amos version 27 was used to analyse the data. The assessment of the path coefficients indicates a statistically significant relationship between psychological insecurity and adoption of proximity mobile payments. Further analysis indicated that perceived value fully mediates the relationship between psychological insecurity and adoption of proximity mobile payments. To the best knowledge of the author, this study is the first to provide empirical evidence of the mediating effect of perceived value on the relationship between perceived risk factors and adoption of proximity mobile payments in an emerging economy. Therefore, the study makes valuable contributions to academicians and practitioners in quest for safe proximity mobile payment apps.Keywords Perceived risks adoption intention, proximity mobile payments, perceived value theoryJEL Classifications: M31, L81DOI: https://doi.org/10.32479/irmm.11814

Highlights

The number of mobile payment services that have been introduced across the globe are unprecedented, in part due to exponential growth in the adoption of smartphones
This study investigates the use of a mobile device to initiate and complete purchases, in which case the use of proximity mobile payment apps is considered the use of a new technology regardless of the associated risks
Cronbach’s Alpha and composite reliability (CR) values were determined while the average variance extracted (AVE) values to determine convergent validity were computed

Summary

Introduction

The number of mobile payment services that have been introduced across the globe are unprecedented, in part due to exponential growth in the adoption of smartphones. The mobile phone technology has brought about many opportunities for banks, mobile network operators (MNO) and software service providers to introduce financial transaction services including mobile payments. Mobile phones are anticipated to become a common tool for initiating, authorizing and completing transactions, many mobile payment service efforts have failed (Dahlberg et al, 2015). Consumers can complete a payment transaction without having to be physically present in the store (De Kerviler et al, 2016). For proximity mobile payments to occur, the consumer has to be physically present in the store. The common mode of purchases includes point-of-sale (POS) where consumers can scan a QR code to effect payment, or use near field communication (NFC) technology to make the transaction. This study focuses on proximity mobile payments largely touted by researchers as direct substitute for using cash or debit cards (De Kerviller et al, 2016; O’Brien, 2018)

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