A framework for mobile payment adoption through a TOE Lens : a case of South African Merchants (SMEs)

Abstract

In pursuit of increasing the understanding of the mobile payment ecosystem, this research focused on the role of the merchant within this ecosystem, with a specific focus on South African SMEs, given the major role that they have at an economic and social scale. This thesis is a design science research (DSR) led research study examining the critical factors impacting adoption of mobile payment technologies by South African Merchants, specifically SMEs. Past and present research has focused predominantly on technology, security and consumer adoption studies, with limited research into merchant related studies. To further expand our understanding of the mobile payment ecosystem, there is a need to respond to identified recommendations to further study the merchant as it is as vital as the consumer. In the South African economy, SMEs play an important role in job creation, contribution to GDP, social upliftment, adoption of new technologies. However, there is a lack of understanding of what impacts SMEs in South Africa in their adoption of mobile payment technologies. The Dynamic Capabilities (Teece, 1997) was applied to increase the researchers understanding of the business environment that the merchants (SMEs) operated in. The dynamic capabilities approach was incorporated into the study with the broader focus being through the lens of the Technology Organisation and Environment (TOE) theory (Tornatzky and Fleisher, 1990). At a firm level, the TOE served to be a stronger fit in understanding the role of technology in organisations. Through an interpretive approach, qualitative and quantitative research methods were applied in the process of data collection. In each of the DSR cycles, a different method of data collection was used, primarily; semi structured interviews, survey and focus groups. This allowed the researcher to further understand the merchants (SMEs) while building out a framework as part of the DSR process. The findings from the interviews with the SMEs, identified critical factors and themes to be considered for mobile payment usage and adoption by SMEs. The findings revealed that the factors impacting mobile payment adoption by South African SMEs were risk, convenience, ease of use, trust in service providers, system features, device features and issues, cost of fees, company image and credibility, blue tooth connection, customer service and integrated systems. At a broader thematic level, several themes emerged that would warrant future research: business decision making and impacts, customer access and marketability, the impact of payment systems and payment process on the business, infrastructure setup, support, and connectivity and operating a business and its processes. The results indicate that multiple factors within the TOE spheres need to be considered holistically when developing mobile payments solutions for use by merchants in South Africa. The Merchant Mobile Payment Conceptual Framework shows that the following factors are deemed more critical in influencing the adoption of mobile payments by merchants in South Africa: convenience, customer service, risk, ease of use, cost of fees and trust. This thesis contributes to the body of knowledge as it adds to the ICT profile of SMEs, exploring how they use ICT and how factors such as power shortage and access to the internet and Wi-Fi affect them. Most importantly, this thesis identifies the critical factors that mobile payment solution providers need to address in the provision of mobile payment technologies for use by SMEs.