An Empirical Examination of Initial Trust in Mobile Payment

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<ul><li><p>Wireless Pers CommunDOI 10.1007/s11277-013-1596-8</p><p>An Empirical Examination of Initial Trust in MobilePayment</p><p>Tao Zhou</p><p> Springer Science+Business Media New York 2014</p><p>Abstract Due to the high uncertainty and perceived risk associated with using mobile pay-ment, it is critical to building users initial trust in order to facilitate their adoption and usage.Drawing on both perspectives of self-perception-based and transference-based factors, thisresearch examined initial trust in mobile payment. Self-perception-based factors includeubiquitous connection and effort expectancy, whereas transference-based factors includestructural assurance and trust in online payment. The results indicated that both perspectivesof factors affect initial trust, which further affects performance expectancy and usage inten-tion. Thus, service providers need to build users initial trust in order to facilitate their usageof mobile payment.</p><p>Keywords Mobile payment Initial trust Structural assurance Effort expectancy</p><p>1 Introduction</p><p>Mobile internet has been developing rapidly in the world. Especially, the application of thirdgeneration (3G) communication technologies has triggered mobile internet development.According to a report issued by China Internet Network Information Center (CNNIC) in July2013, the number of mobile internet users in China has exceeded 464 million, accountingfor 78.5 % of its internet population (591 million) [7]. Faced with the great market, serviceproviders have released a variety of mobile services, such as mobile instant messaging,mobile search, mobile games and mobile payment. These services can be categorized into fourtypes: communication, information, entertainment and transaction [13]. As a basic transactionapplication supporting mobile business, mobile payment has received considerable attentionfrom enterprises. For example, Alipay, which is the largest online payment service providerin China, has released mobile Alipay. Telecommunication service providers such as ChinaMobile have also developed mobile payment products, which enable users to pay public busfees and buy cinema tickets via their mobile phones. However, although service providers</p><p>T. Zhou (B)School of Management, Hangzhou Dianzi University, Hangzhou 310018, Peoples Republic of Chinae-mail: zhoutao@hdu.edu.cn</p><p>123</p></li><li><p>T. Zhou</p><p>have invested great effort and resource on mobile payment, the user adoption rate is relativelylow. For example, only 17.1 % of mobile internet users have ever used mobile payment inChina [7]. In US, this figure is 12 % [34]. Service providers need to understand the factoraffecting user behavior and adopt effective measures to facilitate user adoption and usage ofmobile payment.</p><p>Mobile payment means that users access information and services, such as checkingbalance, transferring money and conducting payment via mobile devices such as mobilephones. Compared to online payment, a main advantage of mobile payment is ubiquity.That is, with the help of mobile devices and networks, users have been freed from temporaland spatial constraints. They can conduct mobile payment at anytime from anywhere. Thisprovides great convenience and value to users, which may facilitate their adoption of mobilepayment. However, mobile payment also involves great uncertainty and risk. For example,mobile networks are vulnerable to hacker attack and information interception. Mobile devicesmay be also infected by viruses and Trojan horses. These problems may increase usersconcern on payment security and decrease their usage intention. They need to build trust inorder to mitigate their perceived risk and facilitate their usage of mobile payment.</p><p>In this research, we are mainly concerned with initial trust that users develop during thefirst interaction with mobile payment systems. Building initial trust is critical to mobile pay-ment user adoption. On one hand, mobile payment is a novel service to most users. Whenthese users plan to use mobile payment, they may perceive great uncertainty and risk due tothe lack of usage experience. They need to engender enough trust to alleviate this perceivedrisk. On the other hand, the switching cost is low. Users can easily switch from a serviceprovider to an alternative one. Thus, service providers also need to build users initial trustin order to retain them.</p><p>Extant studies have used information systems theories such as the technology accep-tance model (TAM) and innovation diffusion theory (IDT) to examine mobile payment userbehavior. Technological perceptions such as perceived usefulness and relative advantage areidentified to affect usage intention of mobile payment [16,28,36]. However, these studieshave seldom examined the effect of initial trust on user adoption of mobile payment. Asnoted earlier, due to the high perceived risk and low switching cost, building users initialtrust is critical to their usage behavior. Thus, it is necessary to examine initial trust in mobilepayment. We investigated two categories of initial trust determinants which include self-perception-based and transference-based factors. Users initial trust may not only developfrom their own perceptions, but also be transferred from other parties and channels. In thisresearch, self-perception-based factors include ubiquitous connection and effort expectancy,whereas transference-based factors include structural assurance and trust in online payment,which reflect institutional trust and cross-channel trust transference, respectively.</p><p>The rest of this paper is organized as follows. We review relevant literature on mobilepayment user adoption and initial trust in the next section. Then we develop research modeland hypotheses in Sect. 3. Section 4 reports instrument development and data collection. Wepresent results in Sect. 5 and discuss these results in Sect. 6. Section 7 presents the theoreticaland managerial implications. We conclude the paper in Sect. 8.</p><p>2 Literature Review</p><p>2.1 Mobile Payment User Adoption</p><p>As an emerging service, mobile payment has not received wide adoption among users. Thus,researchers have tried to identify the factors affecting user behavior. They have often drawn</p><p>123</p></li><li><p>Initial Trust in Mobile Payment</p><p>on information systems theories such as TAM and IDT as theoretical bases. Kim et al. [16]suggested that individual differences and system characteristics affect perceived usefulnessand ease of use, both of which in turn affect Korean users intention to use mobile payment.Individual differences include innovativeness and mobile payment knowledge, whereas sys-tem characteristics include mobility, reachability, compatibility and convenience. Mallat [28]conducted a qualitative study and noted that relative advantage, complexity, compatibility,costs and trust affect user adoption of mobile payment in Finland. Schierz et al. [36] statedthat compatibility, perceived usefulness, mobility and subjective norm affect user attitude,which further affects German users intention to use mobile payment.</p><p>In addition to technological perceptions such as perceived usefulness, trust also has asignificant effect on mobile payment user behavior. Chandra et al. [5] noted that both ser-vice provider characteristics and mobile technology characteristics affect users trust, whichfurther affects their adoption of mobile payment through perceived usefulness and perceivedease of use in Singapore. Service provider characteristics include reputation and perceivedopportunism, whereas mobile technology characteristics include perceived environmentalrisk and structural assurance. Shin [37] noted that perceived ease of use, perceived useful-ness, trust and perceived risk affect Korean users adoption of mobile payment.</p><p>2.2 Initial Trust</p><p>Trust reflects a willingness to be in vulnerability based on the positive expectation towardanother partys future behavior [29]. Trust often includes three dimensions: ability, integrityand benevolence [15,39]. Ability means that service providers have the knowledge and exper-tise necessary to fulfill their tasks. Integrity means that service providers keep their promisesand do not deceive users. Benevolence means that service providers are concerned with usersinterests, not just their own benefits.</p><p>Due to its significant role, trust has received extensive consideration in the informationsystems research [3], especially in the e-commerce context, which involves great uncertaintyand risk. Initial trust has also been attached importance by researchers. Various factors areidentified to affect initial trust. The first category of factors is related to website characteristics.Users may rely on their perceptions of website to form their initial trust. Website qualityis a significant determinant of initial trust [25]. Other factors such as information quality,site appeal and usability also affect initial trust [12,31]. In addition, both factors of TAMincluding perceived usefulness and ease of use have effects on initial trust [4,6]. The secondcategory of factors is related to company. Reputation is a strong factor affecting initial trust[9,22]. The third category of factors is related to user. Trust propensity, which reflects anatural tendency, has a significant effect on initial trust [18]. The fourth category of factors isrelated to third parties. Users may transfer their trust in third parties to websites. These trustdeterminants include portal affiliation, peer endorsement [38], web assurance seals [14], andbrand association [8].</p><p>3 Research Model and Hypotheses</p><p>3.1 Self-perception-Based Factors</p><p>Ubiquitous connection means that users can obtain ubiquitous information and services.This means a challenge for service providers as mobile networks have limited bandwidth andunstable connections. Users may encounter slow responses and service interruption under</p><p>123</p></li><li><p>T. Zhou</p><p>some circumstances. If users encounter these problems during the first interaction with mobilepayment systems, they may feel that service providers lack enough ability to offer qualityservices to them. This may decrease their trust. On the other hand, online payment oftenrequires users to sit before desktop computers. Mobile payment frees users from temporaland spatial constraints and enables them to conduct payment at anytime from anywhere.This brings a positive utility to users and may enhance their performance expectancy. Kimet al. [16] also suggests that mobility affects perceived usefulness (similar to performanceexpectancy) of mobile payment. Thus, we suggest,H1: Ubiquitous connection positively affects initial trust in mobile payment.H2: Ubiquitous connection positively affects performance expectancy.</p><p>Effort expectancy reflects the difficulty of using mobile payment. When users find mobilepayment systems difficult to use, they may feel that service providers have not investedeffort and resources on offering an easy-to-use system to them. This may lower their trustin service providers. Extant research has identified the effect of perceived ease of use (sim-ilar to effort expectancy) on mobile user trust [23,24]. In addition, effort expectancy mayaffect performance expectancy. Users may not expect to acquire positive utility from using adifficult-to-use system.</p><p>H3: Effort expectancy positively affects initial trust in mobile payment.H4: Effort expectancy positively affects performance expectancy.</p><p>3.2 Transference-Based Factors</p><p>Structural assurance reflects that mobile internet has technological and legal structures toensure payment security. Structural assurance represents an institution-based mechanism,which can help build user trust and alleviate perceived risk [33]. According to trust transfer-ence [40], users may transfer their trust in these structures to mobile payment systems. Thatis, users believe that mobile payment systems that adopted these technological and legalstructures can guarantee their payment security. Kim et al. [17] also found that structuralassurance has a strong effect on user trust in mobile banking. In addition, structural assur-ance may affect performance expectancy. When users perceive that there exist technologicalstructures to ensure security, they may form a positive expectation toward future perfor-mance. Otherwise, they may doubt payment security, which may lower their performanceexpectation.</p><p>H5: Structural assurance positively affects initial trust in mobile payment.H6: Structural assurance positively affects performance expectancy.</p><p>Trust in online payment reflects user beliefs in the trustworthiness of online paymentsystems. Compared to mobile payment that represents an emerging service, online paymentis very popular among users. Thus, users may transfer their trust in online payment systemsto the mobile payment systems belonging to the same brand. Extant research has noted thatoffline trust affects online trust [19]. In this research, we propose that online trust can be alsotransferred to mobile trust. In addition, online trust may also affect performance expectancy.When users have developed trust in online payment systems, they may also expect that mobilepayment systems can offer quality services to them as both belong to the same brand. Thus,we suggest,</p><p>H7: Trust in online payment positively affects initial trust in mobile payment.H8: Trust in online payment positively affects performance expectancy.</p><p>123</p></li><li><p>Initial Trust in Mobile Payment</p><p>Ubiquitous connection</p><p>Effort expectancy</p><p>Initial trust in mobile payment</p><p>Usage intention</p><p>Self-perception based</p><p>Transferencebased</p><p>Performance expectancy</p><p>Structural assurance</p><p>Trust in online payment</p><p>Fig. 1 Research model</p><p>3.3 Initial Trust, Performance Expectancy and Usage Intention</p><p>Initial trust may affect performance expectancy. Trust provides a guarantee that users obtainpositive results in future [10]. Trust enables users to believe that service providers have enoughability and integrity to offer quality services to them. Extant research has identified the effectof trust on perceived usefulness [26,42,45]. Consistent with these studies, we propose,H9: Initial trust in mobile payment positively affects performance expectancy.</p><p>Initial trust and performance expectancy may affect usage intention. Both factors asenablers may help facilitate user adoption and usage intention. According to the theory ofplanned behavior [1], trust and performance expectancy as user beliefs may affect behavioralintention. Numerous studies have identified the effects of trust and performance expectancyon user behavioral intention [3,43,44]. Thus, we propose,H10: Initial trust in mobile payment positively affects usage intention.H11: Performance expectancy positively affects usage intention.</p><p>Figure 1 presents the research model.</p><p>4 Method</p><p>4.1 Instrument Development</p><p>The research model includes seven factors. Each factor was measured with multiple items. Allitems were adapted from extant literature to improve content validity [41]. These items werefirst translated into Chinese by a researcher. Then another researcher translated them backi...</p></li></ul>

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