Efficient payment systems are crucial for developing countries’ economic development, and are regarded as the backbone to a highly competitive country. Innovations in the payment industry have also lead to greater access to formal financial system. As such, this study explores the factors influencing e-payment adoption by businesses and consumers in Malaysia.
More specifically, this study modifies and extends the Perceived E-Readiness Model. The modified model redefines relationships between the variables and introduces business strategy as a new independent variable and e-payment adoption as the dependent variable. I combine two established theories in technology innovation and adoption behaviour areas—the Technology Acceptance Model and the Technology Readiness Index—into an integrated model. This model better explains the impact of behavioural readiness and perceptions of technology to e-payment adoption.
By using partial least squares structural equation modelling, I analysed 165 business data and found that e-payment adoption by businesses was strongly influenced by nine organisational and external factors (human resources, business resources, technology resources, business strategy, governance, commitment, awareness, market forces e-readiness, and supporting industries e-readiness). The government e-readiness factor was insignificant. I also analysed 687 consumer data and found that three consumer behavioural dimensions (innovativeness, optimism, and insecurity) were strong predictors of the perceived ease of use of e-payment technology. On the other hand, only the optimism dimension significantly and positively influenced perceived usefulness. The discomfort dimension was insignificant.
Qualitative responses through open-ended questionnaires received from businesses and consumers respondents provided additional support to the quantitative findings. Comments highlighted by technology service providers through semi-structured interview sessions contributed additional perspectives on the subject matter. I analysed these qualitative data manually and by using Leximancer software.
Further, I perform mediation and moderation data analyses to further explain the respective findings and arguments offered. I identified a few relationships in both the business and consumer models to have been partially mediated by several variables: the business strategy and commitment variables in the business model, and perceived ease of use and perceived usefulness in the consumer model. Using a multi-group analysis technique, this study also provides evidence of the moderating effects of several moderating factors. Business characteristics identified as moderators for business model were firm age, firm size and business performance. Meanwhile, based on consumers’ demographic information, the moderators for consumer model were age, gender, level of education, and usage experience. In order to assess the moderating effects of these factors, theoretical frameworks and moderating hypotheses were developed accordingly.
The results of the study lead to the conclusion that, the government, regulatory authorities, and other related agencies should consider the highlighted organisational and external factors for businesses, and the identified behavioural dimensions and perceptions for consumers when strategising their plan to expedite the Malaysia’s migration to epayment.