The influence of trust and perceived risk on mobile payment adoption in emerging markets

Abstract

The financial services sector continues to evolve, due to the rapid advancements in technology. Innovative banking services such as mobile payments are becoming more popular, providing benefits such as convenience, lower costs, and faster processing of transactions to consumers. Despite the benefits, the adoption of mobile payments in many countries remains low. Previous adoption studies have found that perceived risk negatively impacts consumers’ intention to adopt mobile payments while trust has been found to contribute to consumers’ confidence in mobile payments. Mobile payment adoption research has been conducted in many countries, in emerging markets, but very few studies have focused on the South African context. Given the unique context and challenges faced in South Africa, it is important to understand whether the perceptions of trust and perceived risk influence consumers’ intention to adopt mobile payments. The study followed a quantitative, explanatory, cross-sectional approach. Data was collected using an online survey questionnaire. 193 responses were collected using a non-probability convenience sampling technique. Data was analysed using Pearson’s correlation coefficient and multiple linear regression analysis. Key findings of the study were that trust plays a significant role in influencing consumers to adopt mobile payments. In contrast, financial risk and privacy risk, were found to be not predictors of consumers intention to adopt. The main conclusions of the study were therefore that the sub-constructs of perceived risk, which are financial risk and privacy risk are not reliable indicators of intention to adopt.