Consumer Acceptance of Digital Wallet

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CHAPTER 1

1. INTRODUCTION

1. Background of the study

Mobile payments have been in use for many years and have gained ground (Dahlberg, Mallat, Ondrus, & Zmijweska, 2008). The mobile wallet is the newest form of mobile payment that enables users to share content and access service as well as conduct payments and ticketing transaction. Simply put, a mobile wallet is the replacement of a person’s wallet with a mobile phone equipped with the functions of a bank card, credit card, house key, company access control ID, subway tickets, membership card, and so on. Jupiter Research (2008) forecasts that the mobile payment market will gain significant traction over 2010- 2012. Mobile wallet services are growing part of the digital economy. Since its inception, the mobile wallet has had exponential business growth with the introduction of its mobile commerce technology and its unique marketing business plan, and through the successful recruitment of a group of an enterprising and strong marketing force (Chen, 2008). With the rapid evolution of mobile technology, and an expanding base of mobile phone users, the mobile wallet has been recognized as having growth potential in the mobile commerce industry (Au & Kauffman, 2007). The industry strives to develop and build solid mobile commerce application and at the same time provide an environment for secure, convenience, cost- saving and efficient business transaction.

2. Problem statement

As with many rollouts, a key problem is that there are still not enough places for consumers to use this technology, even though it has been available for over two years. About 100,000 terminals and readers have been deployed with retail merchants, not counting multiple brands of applications accepted at the same shop or restaurant. Other problems have to do with the technology. Mobile vendors have struggled over how to personalize phones over the air, as well how to enable a better experience for downloading mobile wallet applications to the phone. Another challenge is posed by the many competing standards; it is necessary to standardize mobile payment protocols, schemes, and services.

Among other problems, customer apathy seems to be the greatest barriers (Viehland & Leong, 2007). According to Jupiter Research (2008), consumers are uncomfortable with the idea of mobile payment – i.e., “the fear of an unknown medium” – and they are not even willing to try paying with their mobile device. While there are widespread enthusiasm and hope about mobile wallet service, there are also fears of security breaches and identity theft. Mobile wallets provide many functions on a single mobile phone, so that having all your personal and sensitive information stored on a phone poses a great risk if the phone is lost, broken, or stolen. Despite concerns over security and privacy (Dewan & Chen, 2005), such issues have been addressed in only a few studies, and even those few focus on the sheer technical aspects of security and neglect user dimensions such as users’ perceived security, trust, and risk. It may be important to investigate how users perceive security and what their privacy concerns over mobile wallets are. Therefore, this study explores the factors influencing customer acceptance towards mobile wallet.

3. Research objectives

1. To identify whether self- efficacy is influencing consumer acceptance towards digital wallet

2. To identify whether trust is influencing consumer acceptance towards digital wallet

3. To identify whether perceived security is influencing consumer acceptance towards digital wallet

4. Research questions

In order to reach the research purposes for this study, the following research questions are stated:

1. Does the self-efficacy influence the consumer acceptance of digital wallet?

2. Does the trust influence...
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