Abstract
Purpose: The purpose of this research was to determine the influence of race and income on the preferred payment instrument at pay points in a retail store in Pretoria Gauteng.Problem investigated: The method of payment, as well as the way these payment methods have been utilised, has evolved throughout history. Cash has stayed at the top of the payment instrument deck as a payment choice for the past 10 decades. With the expansion of technology payment instruments evolved to facilitate exchange between merchant and consumer. The preferred method of payment at a retail store in Gauteng, indicating whether consumers prefer cash payments or the use of cards was investigated. Further to this the difference in payment method between the different races and income groups was identified.Methodology: A quantitative survey research method was used. The statistical analysis entailed correlations using the Cramer’s V to test the dependency between two variables and the degree of dependency of variables, after which the Chi-Square test was also applied.Value of the research: The indication of consumer preference of payment method will have implications on which possibilities are available at the point of sale. Cash is no longer the only possible payment instrument; cards, debit and credit, are as easily used by consumers. Both banks and merchants will find this information important, since they need to make provision for different payment options. The results further distinguished consumer behaviour amongst different race groups and income groups.Conclusion: The research confirmed the previous findings in other countries that consumers have preconceived ideas on which payment instrument they would utilise at point of sale(POS.)
Highlights
The use of different payment instruments has been around for centuries
Several empirical studies have been conducted on payment systems in developed countries, and interest is shown in the utilisation of payment instruments across multiple continents, including America and Europe (Bounie, François & Houy 2007; Mann 2011)
The study was conducted to understand the utilisation of payment instruments in a retail store in Gauteng
Summary
The use of different payment instruments has been around for centuries. Since the genesis of money 3000 BC (Todorova 2009), tremendous change has taken place in payment instruments, and currently the online debit card payment method has been accepted widely. In 1984 already Americans were able to withdraw funds from an automatic teller machine (ATM) by making use of their debit cards and have access to the funds immediately. This feat dubbed debit cards as the precursors of electronic money at the point of sale (Weinstein 1984)
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