Comparison of factors that inhibit the adoption of cellphone banking between low and high income groups in South Africa

Abstract

In South Africa, the penetration rate of Cellphones is greater than 100 percent. South African banks are leveraging off this technology by providing a bouquet of financial services via the Cellphone – Cellphone banking. However, the adoption of Cellphone banking has been much slower when compared to other electronic banking channels, such as internet banking. The objective of this research was to compare factors that inhibit adoption of Cellphone banking between the low and high income groups. Based on existing innovation adoption theory, there were five factors of adoption identified: Trialability, Perceived Complexity, Perceived Value, Perceived Credibility and Perceived Risk. A telephonic survey was administered. The survey questionnaire contained a series of closed-ended questions relating to the five factors of adoption and a single open-ended question to identify factors not being researched. The results of the survey found that the greatest inhibitor to Cellphone banking was Trialability, followed by Perceived Complexity and Perceived Risk (regardless of income levels). The results of the open-ended questions were grouped in two themes; Personal Preference and Banking Perception. The comparison of results between the open-ended themes found that personal preferences have a significant impact between the low and high income groups. The majority of the high income respondents preferred Internet banking to Cellphone banking. However, banking perceptions had a higher impact on the low income respondents when comparing the two themes. The study establishes that financial institutions should provide a demonstration and give the customers the opportunity to test Cellphone banking in an effort to increase adoption; as this should reduce the perceived complexity and risk associated with this service.