FACTORS AFFECTING ADOPTION OF E-PAYMENT AMONG PRIVATE .
FACTORS AFFECTING ADOPTION OF E-PAYMENTAMONG PRIVATE UNIVERSITY STUDENTS IN KLANGVALLEYGOH SAU WEIMASTER OF BUSINESS ADMINISTRATIONUNIVERSITI TUNKU ABDUL RAHMANFACULTY OF ACCOUNTANCY AND MANAGEMENTAPRIL 2017
FACTORS AFFECTING ADOPTION OF E-PAYMENTAMONG PRIVATE UNIVERSITY STUDENTS IN KLANGVALLEYGoh Sau WeiA research project submitted in partial fulfillment of therequirement for the degree ofMaster of Business AdministrationUniversiti Tunku Abdul RahmanFaculty of Accountancy and ManagementApril 2017ii
FACTORS AFFECTING ADOPTION OF E-PAYMENTAMONG PRIVATE UNIVERSITY STUDENTS IN KLANGVALLEYByGoh Sau WeiThis research project is supervised by:Dr. Chong Shyue ChuanAssistant ProfessorDepartment of EconomicsFaculty of Accountancy and Managementiii
Copyright @ 2017ALL RIGHTS RESERVED. No part of this paper may be reproduced, stored in a retrievalsystem, or transmitted in any form or by any means, graphic, electronic, mechanical,photocopying, recording, scanning, or otherwise, without the prior consent of the authors.iv
DECLARATIONI hereby declare that:1. This Research Project is the end result of my own work and the due acknowledgement hasbeen given in the references to all sources of information be they printed, electronic, orpersonal.2. No portion of this research project has been submitted in support of any application for anyother degree or qualification of this or any other university, or other institutes of learning.3. The word count of this research report is 16,076.Name of Student:Goh Sau WeiStudent ID:15UKM00278Signature:Date:v
ACKNOWLEDGEMENTI am appreciating sincere from the heart to all the parties who have facilitated me in thisthesis throughout the duration of the time until the completion of the research.Firstly, I would like to express our gratitude to my supervisor, Dr. Chong Shyue Chuanguided me to complete this research project. He had spent his precious time to help and guideme when I was in doubt through the development of the research. His valuable guidance,support and suggestion have helped me a lot when I am facing difficulties in my researchproject.Besides that, I would also like to show appreciation towards the respondents for their timeand effort in completing the questionnaires. Without their contribution from their responses,this research project would not have proceeded.Last but not least, I also want to show my gratitude towards my seniors, which they haveshared their knowledge and experiences with me. Even I am not able to mention everyone byname but by using this platform I would like to thanks to all these people.vi
DEDICATIONThis humble work is especially dedicated to:Dr. Chong Shyue Chuan, my project supervisor,All the respondents,AndTo my family and all my loved ones,Thank you for being my guidance and support.vii
TABLE OF CONTENTSPageCopyright . . .ivDeclaration . . .vAcknowledgement . .viDedication . . .viiTable of Contents . . . .viii-xiiList of Figures . . . . .xiiiList of Tables . . . .xivList of Appendices . . . .xvPreface . .xviAbstract . .xviiChapter 1Introduction1.0 Introduction . .11.1 Research Background . . . . 1-41.2 Problem Statement . . . .4-51.3 Research Questions . .51.4 Research Objective . .61.3.1 General Objective . . 61.3.2 Specific Objectives .6-71.5 Significance of Study . .7-81.6 Chapter Layout . . 8-9viii
1.8 Conclusion . . .9Chapter 2Literature Review2.0 Introduction . . . 102.1 Literature Review . . .112.1.1Intention . . . . . .11-122.1.2Attitude . .12-132.1.3Subjective Norm . . . .13-142.1.4Perceived Ease of Use . .14-152.1.5Perceived Usefulness . .152.1.6Perceived Security . .16-172.1.7Trust . . .17-182.1.8Benefit . .18-192.1.9Self-efficacy . .19-202.2 Review of Relevant Theoretical Model . . .21-242.3 Proposed Theoretical / Conceptual Framework . 252.4 Hypotheses Development . . .262.5 Conclusion . . .26Chapter 3Research Methodology3.0 Introduction . . 273.1 Research Design . . 273.1.1 Quantitative Research . .283.1.2 Descriptive Research .283.2 Data Collection Methods . .283.2.1 Primary Data . . .29ix
3.3 Sampling Design . . . .293.3.1Target Population . . .29-303.3.2Sampling Frame and Sampling Location . .303.3.3Sampling Elements . . 303.3.4Sampling Techniques . .313.3.5Sampling Size . . . .313.4 Research Instrument . .31-323.4.1Questionnaires Design . . . 323.4.2Pilot Test . . .333.5 Constructs Measurement . .33-343.5.1Origin of Constructs .34-363.6 Data Processing . . . .373.6.1Descriptive Checking . . . . .373.6.2Data Editing 373.6.3Data Coding . .373.6.4Data Transcription . .373.6.5Data Cleaning . . . .383.7 Data Analysis . . . .383.7.1Descriptive Analysis . . .383.7.2Factor Analysis . 38-393.7.3Reliability Test . 38-393.7.3Inferential Analysis . .393.7.3.1Pearson’s Correlation Analysis .39-403.7.3.2Multiple Regression Analysis . . 40-413.8 Conclusion . . . .41x
Chapter 4Data Analysis4.0 Introduction . . . . 424.1 Descriptive Analysis .424.1.1Respondents’ Demographic Profile . 43-454.2 Factor Analysis . . .45-514.3 Reliability Analysis . .52-534.4 Inferential Analysis . .534.3.1Pearson Correlation Analysis .53-544.3.2Multiple Regression Analysis 55-594.5 Conclusion . . . .60Chapter 5Discussion, Conclusion and Implication5.0 Introduction . . 615.1 Summary of Statistical Analyses . . .615.1.1Descriptive Analysis .61-625.1.2Scale Measurement . .625.1.2.15.1.3Reliability Test . . .62Inferential Analysis .635.1.3.1Pearson Correlation Coefficient . .635.1.3.3Multiple Regression Analysis . .635.2 Discussion of Major Findings . . .645.2.1Summary of Hypotheses Testing . 64-655.3 Managerial Implication . .66-685.4 Limitation of Study . 685.5 Recommendation for Future Research . .695.6 Conclusion . . . .70xi
References . . .71-83Appendices . . 80-105xii
LIST OF FIGURESPageFigure 1Theory of Reasoned Action21Figure 2Theory of Planned Behaviour22Figure 3Technology of Acceptance Model23Figure 4Proposed Theoretical/Conceptual Framework50xiii
LIST OF TABLESPageTable 1Questions Ask for Each Factor Influence34-36Table 2Rules of Thumb of Pearson’s Correlation39Table 3Respondents’ Demographic ProfileTable 4Kaiser-Meyer-Olkin Measure of Sampling Adequacy45Table 5Factor Analysis46Table 6Rotated Component MatrixTable 7Internal Reliability Test52Table 8Rules of thumb about Correlation Coefficient size53Table 9Correlation Coefficient54Table 10Multiple Regression Result55Table 11Summary of Hypotheses Testing5743-4447-50xiv
LIST OF APPENDICESPageAppendix A: Questionnaire84-91Appendix B: Output of SPSS92-105Appendix C: Ethical Approval for Research Projectxv106
PREFACEThe purpose of this research project is to evaluate the factors affecting adoption e-paymentamong private university students in Klang Valley. The total of use of e-payment is stillgrowing as compared to the years before based on the results and findings of otherresearchers. Therefore, retailers and marketers are keen to find out the factors that affectintention to adopt e-payment.Besides, this study examines how the independent variables (Attitude, Subjective Norm,Perceived Ease of Use, Perceived Usefulness, Perceived Security, Trust, Benefit and Selfefficacy) will affect the dependent variable (E-Payment Intention). The researcher for thisproject would like to evaluate the e-payment intention of private universities’ student inKlang Valley. Therefore, this research project would be able to provide a betterunderstanding to the retailers and marketers regarding the factors affecting adoption epayment among private university students in Klang Valley.Lastly, I hope that this research project can provide the readers with a better insight andknowledge of the e–payment intention in younger adults.xvi
ABSTRACTPurpose: The purpose of this study is to examine the factors affecting adoption of e-paymentamong private universities student in Klang Valley.Design/methodology/approach: This study inspects factors affecting adoption e-paymentamong private universities student in Klang Valley by using cross-sectional analysis of 500target respondents in five different private universities in Klang Valley. This paper observesthe relationship between attitude, subjective norm, perceived ease of use, perceivedusefulness, perceived security, trust, benefit and self-efficacy to the e-payment intention ofprivate universities’ students.Findings: It can be concluded that there is a significant relationship between the attitude,subjective norm, perceived ease of use, perceived usefulness, perceived security, trust, benefitand self-efficacy to the e-payment intention of private universities’ students. Besides, I foundout that self-efficacy has the strongest relationship with online shopping intention.Practical Implications: This study is important to academicians, buyers and sellers whoinvolved in e-payment as it demonstrates attitude, subjective norm, perceived ease of use,perceived usefulness, perceived security, trust, benefit and self-efficacy are among the eightcritical factors in affecting the e-payment intention.Originality/value: There is only a few research studies have attempted to explain the factorsaffecting e-payment intention with the adoption variables from Technology AcceptanceModel (TAM) and Theory of Planned Behaviour (TPB). Instead, many researchers wereconducted to examine how security and trust related to consumers’ purchase intention. Thus,this study may extend the literature demonstrating the eight factors affecting e-paymentintention of private universities’ student in Klang Valley.xvii
CHAPTER 1INTRODUCTION1.0IntroductionThe objective of this study is to determine the factors that affecting adoption of e-paymentamong private university students in Klang Valley. This chapter consists of summarizedchapter one into six parts to illustrate and describe a clear idea for whole research project. Allthe parts will be explained in details which consist of hypotheses, research objectives,problem statement, research background and significance of study in this entire chapter.1.1Research BackgroundThe advancement of wireless and internet technology has created opportunities andchallenges for good and services commerce. The growth of electronic commerce is built upone-payment that most of the business cooperation views this e-payment system as veryimportant concerns for successful business and financial services (Kousaridas, Parissis &Apostolopoulos, 2008). This statement is supported by many previous studies such as Hsieh(2001), Peha and Khamitov (2004). In addition, Stroborn, Heitmann, Leibold and Frank(2004), Linck, Pousttchi and Wiedemann (2006), Cotteleer, Cotteleer, Prochnow (2007), andKousaridas et al. (2008) stated in their studies on electronic commerce.1
Electronic payment, which is also called as e-payment has become well-known nowadays forpaying transactions the online purchases made. (Teoh, Choy, Lin & Chua, 2013). There aremany limitations in traditional e-payment systems that inhibit consumers from adopting them.Based on Chou et al. (2004) and Linck et al. (2006) stated that in correlation with thetraditional payment methods, e-payment system in the market have few constructivecharacteristics together with convenience, security, anonymity, reliability, scalability, privacy,acceptability and effectiveness. These also stated in several previous studies such as Strobornet al. (2004), Tsiakis and Sthephanides (2005). Besides that, Cotteleer et al. (2007) andKousaridas et al. (2008) had mentioned in their study as well. According to Hord (2005), epayment symbolises some kind of cashless payment that does not include a physical papercheque. E-payment is used widely in digital environment such as electronic shopping (eshopping) or online shopping, electronic banking (e-banking) and electronic learning (elearning) that involves internet connection to work with. There are some studies that refer epayment as financial exchange (Kalakota & Whinston, 1997; Zhang & Jasimuddin, 2012).The major purposes of e-payment are serve as e-banking that may include payment methodfor e-shopping, which all the customer can remote all the transactions using electronic valuebut not paper cheque.According to the research done by Teoh, Chong, Lin and Chua (2013), they managed toidentify two major e-payment systems used in Malaysia that impact the development of ecommerce transactions. The systems are large value payment system (SIPS) that incorporatesreal-time digital exchange and securities system (RENTAS). The e-payment systems haddivided into three categories that include retail payment channels such as internet and mobilebanking or payment, retail payment instruments such as credit or debit card and e-money aswell as the last category which is retail payment systems that equally to shared automatedmachine (ATM) network, direct debit and Interbank GIRO. These systems is growinggradually that economies also benefit from this. E-payment systems had support onMalaysia’s gross domestic product (GDP) transactions that is 58 times, which equal toamount RM49.5 trillion (USD15.9 trillion) in the year 2011. According to research done byMoody’s Analytics, the increase in number of e-payments usage had contribute to GDPamounting USD 296 billion in year 2011 to 2015 internationally. According to the reportdone by Central Bank of Malaysia in 2012, the increase in retail payment transactions aremainly on electronic money and credit cards which stated that there are more than 80 per centconducted electronically in the year 2011. Government E-payment Adoption Ranking’s2
research had showed that Malaysia has placed 29th out of 62 countries based on the overallperformance use of e-payment (Economist Intelligence Unit Limited, 2012).Based on survey piloted by the Malaysian Communication and Multimedia Commission(MCMC) in 2008, Malaysia ranked second for number of mobile users in ASEAN market.The study discovered that most of the mobile phone users were those age between 20-49years old. The survey states that young adults consists of 66.8 per cent that majority mobileusers in Malaysia. According to the 2016 Visa Consumer Payment Attitudes survey, 74 percent of Malaysians are becoming less reliant on cash and prefer to make e-payments. Thecause of this is due to most of the consumers do not feel safe using cash. E-payments aremore convenient and efficient that less trouble for consumers to carry cash for small ticketitems. Technology savvy Malaysians such as students in the private university have realisethe benefits of using e-payments such as mobile payments, contactless cards and wearablewith the advancement growth of technology in payment solutions.Under the act of the Private Higher Education Institutions Act (PHEIA) 1996, private highereducation institutions were legitimately recognised in Malaysia in 1996. According toMinistry of Higher Education (2010) stated that there are currently 20 of 514 of the privatehigher education institutions are status of a universities in Malaysia. Student that are currentlypursuing their tertiary education are 17 years old and above, which the year of birth aremostly between the year 1994 to year 1997 (MOHE, 2014). This group of students are alsoknown as Generation Y that are born between years 1978 and 1994 (Hanas, 2006) but thereare some research shown that Generation Y are those born in early 1980s to early 2000s.According to Wolburg and Pokrywczynski (2001), it has been forecasted that Generation Ywill reach 22 million student’s population that have greater spending power than anyprevious generation. The increase in mobile penetration has also caused a fast flow in mobilecommerce. Malaysian youths claimed that owning a mobile phone is a fundamental part oftheir life (Abdullah, 2004). As more young generations own and integrate smartphones intotheir daily lives, adoption of e-payment such as mobile payments will also increase.According to the research done by Forrester Research Inc., generation Y that most of themare students has their own personalities which suit the tools and technologies (Howe &Strauss, 2009). This group of people thought that they are special, team oriented,3
achievement oriented, pressured, self-confident, ordinary and protected. There are potentialcustomers that are able to benefits from technologies.Klang Valley, also called as Kuala Lumpur is the main capital of Malaysia that has the fastestgrowth in terms of economy and financially. According to the study of World PopulationReview (2016), there are population of 1.76 million people in the area of 94 squarekilometres. The report also included the population growth in Klang Valley that the workinggroup, which age are between 15 and 59 that the population have increased from 63 percentto 67 percent in year 2000 as people seek for more work opportunities. This also proved thatpeople in Klang Valley have relevantly more purchasing power due to higher income.1.2Problem StatementThe objective of this study is to demonstrate the identification of the factors that affecting theuse of e-payment in private universities’ students whom are majority of them are the younggeneration student that have greater spending power.According to the Department of Statistics Malaysia, they had forecasted in 2010 Malaysiaconsist of the largest segment that consists of 11 million people, which is 40 per cent ofMalaysia’s population are young adults. Hence, this group of universities’ students will be aprofitable target segment for Malaysian marketers as they have a massive drive to apply andhave the financial ability to meet their wants and desires.Malaysia is growing popularity on adoption of e-payment (Ramalingam, 2012). However,Malaysian are still little engage in e-payment due to some challenges such as less knowledgeon internet and this lead less confident on e-payment system (Luarn & Lin, 2005; Paynter &Lim, 2001). There are customers still remain using cash and cheques because there aredoubtful with the benefit of e-payment (Hataiseree, 2008). This study focuses on examiningstudents’ willingness to use e-payment as a payment instrument to do a transaction whichtrade in exchange for products or services.4
According to Central Bank of Malaysia (2009), customers are not willing to use e-paymentdue to lack of awareness. Many studies also showed that security and trust are the mainreason and concern that customer not willing to use e-payment. With the study done byAbr
critical factors in affecting the e-payment intention. Originality/value: There is only a few research studies have attempted to explain the factors affecting e-payment intention with the adoption variables from Technology Acceptance Model (TAM) and Theory of Planned Behaviour (TPB). Instead, many researchers were
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