Mobile Banking

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Factors influencing the adoption of mobile banking services at the Bottom of the Pyramid in South Africa

Khumbula Masinge masingek@mweb.co.za 083 411 0736

25245792

An integrated research report submitted to the Gordon Institute of Business Science (GIBS), University of Pretoria, in partial fulfilment of the requirements for the degree of Master of Business Administration.

10 November 2010

© University of Pretoria

Abstract

With the convergence of banking services and mobile technologies, users are able to conduct banking services at any place and at any time through mobile banking (Gu, Lee & Suh, 2009). This research examines the factors influencing the adoption of mobile banking by the Bottom of the Pyramid (BOP) in South Africa, with a special focus on trust, perceived cost and perceived risk including the facets of perceived risks: performance risk, security/privacy risk, time risk, social risk and financial risk. The research model includes the original variables of extended technology acceptance model (TAM2) (Venkatesh & Davis, 2000).

Data from this study was collected through a physical hardcopy survey in townships around Gauteng. The research has found that customers in the BOP will consider adopting mobile banking as long as it is perceived to be useful and perceived to be easy to use. But the most critical factor for the customer is cost; the service should be affordable. Furthermore, the mobile banking service providers, both the banks and mobile network providers, should be trusted. Trust was found to be significantly negatively correlated to perceived risk. Thus, trust plays a role in risk mitigation and in enhancing customer loyalty.

i

© University of Pretoria

Keywords

Adoption of mobile banking, perceived risk, trust, perceived cost, Bottom of the Pyramid (BOP).

ii

© University of Pretoria

Declaration

I declare that this research report is my own, unaided work. It is submitted in partial fulfilment of the requirements for the degree of Master of Business Administration at the Gordon Institute of Business Science, University of Pretoria. It has not been submitted before for any degree or examination in any other University. I further declare that I obtained the necessary authorisation and consent to carry out this research.

…………………………………. Khumbula Masinge

10 November 2010 Date

iii

© University of Pretoria

Acknowledgements

I wish to express my sincere gratitude to my supervisor, Dr Tashmia Ismail, for her patience, support and guidance. I am grateful to those who agreed to participate in this research by completing the questionnaire, conducting the survey, data capturing, analysis and editing. I wish to express a word of gratitude to my employer for providing me the opportunity and support to do my MBA studies, including my colleagues for their support. Words can not express enough my appreciation to my family, in particular my lovely wife Bignocia and my special two sons Kwetsima and Khanimambo for their love, patience and support during the entire period. Above all, I glorify the Almighty God for the strength, courage, wisdom and inspiration throughout the period of my studies.

Khumbula Masinge 10 November 2010

iv

© University of Pretoria

Contents
Abstract............................................................................................................................. i Keywords ..........................................................................................................................ii Declaration ......................................................................................................................iii Acknowledgements ........................................................................................................ iv Chapter 1 – Introduction to Research Problem ...........................................................1 1.1 1.2 1.3 1.4 1.5 1.6 Research Objectives...
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