Adoption of e-Payment By Thai Consumers

Adoption of e-Payment By Thai

Consumers

Adoption of e-Payment By Thai

Consumers

Sittikorn DireksoonthornSittikorn Direksoonthorn

BankA financial intermediary accepting deposits and granting Loans; offers the widest menu of services of any financial institution/individual.

What is a Bank?

Deficit-spending individuals and institutions

Surplus-spending individuals and institutions

BankBank

Deposits Deposits

LoansLoansPositive-spreadPositive-spread(Expected-yield)(Expected-yield)

Loan-interestLoan-interest

Service Areas in the Modern Bank

The The Modern Modern

BankBankThe investment/financial

planning function

The investment/financialplanning function

The real estate and communitydevelopment function


The cash managementfunction


The merchant banking function(temporary stock investment for M&A )


The investment banking function(security underwriting )


The security brokerage(trading ) function


The insurance function(risk management)


The credit function(loan)


The payments function(transactions)


The thrift function(saving)


Payment Services Business

The The Modern Modern

BankBankThe investment/financial

planning function

The investment/financialplanning function



















The Case of Thailand’s

e-Payment Thailand is a developing country or emerging economy

where lag behind in the e-payment usage when compared with the best practice-group; Finland, Denmark, the USA, the UK and Australia (Pariwat and Hataiseree, 2006)

Having the outstanding of e-Payment usage compare with some ASEAN countries (Thailand = 11*, Malaysia = 6* and Indonesia = 0.4 *(* Transaction per Person per Year in 2006)

Having the consistently upward trend of Fund Transfer via ATM (ORFT); 2% in 2001 to 9% in 2006 = 50 million Trans.)

Looking for the better use of technology to move low-value transactions away from branch counter to e-Channel (Virtual Bank Branch)

Fee income less than half of those investing in capital. Highly Cost of the investing and subsidizing 1.16 billion

baht for payment market

Problem Statement & Contribution

Highly Fixed cost and variable cost of Thailand’s payment market were estimated at 1.16 billion bath (Bank of Thailand Cost survey in 1998)

Fee receives accounted for less than half of investing

Having a huge investing and subsidizing cost in e-payment development by Thai Banks

Highly need more return on Economic of scale and scope Highly need more effective strategies to attract Thai

consumers to accept e-payment as a common. This study deal with Thai consumer’s recent

experiences in order to move a greater use of e-payment by reflecting more understanding factors’ adoption; Psychological and Demographical profiles

Research objectives

To investigate whether and how Thai consumer’s demographic profile and psychological factors related to the adoption of e-payment channels

To explore the different type of Thai consumer’s profiles that prefers in different e-payment channel

Literature Reviews

Thailand e-Payment Case Review Psychological Factors influencing the adoption

of e-Payment channel The relationship of Adoption Factors and

Demographical Profile; Gender, Age, Household income, Educational, and Occupation

Type of e-Payment service channels Automatic Bill Payment (Direct debit) ATM Phone Banking PC banking

Theoretical Framework from the

Literatures Theory of Acceptance Model by Davis (1989): Perceived

usefulness and Perceived ease of use Diffusion of Innovative adoption by Rogers (1962):

Relative advantage, Compatibility, Simplicity / Complexity, Observability, and Trialability

There are many researchers have incorporated pieces of Rogers and Davis to identify the adoption characteristic.

There are strongly relationship between the Adoption Factor and Demographic Profile

The empirical work of Akinci et. al. (2004) had provided an extensive and excellent review of this literature to identify the psychological factors that related to e-banking and e-channel adoption.

Research FrameworkPsychological Factors to

adoption1. Ease of use2. Transaction security3. Transaction accuracy4. Speediness5. Convenience6. Time utility7. Provision of different personal

services8. Social desirability9. Usefulness10. Economic benefits11. User involvement

Demographic Profile to adoption

1. Gender2. Age3. Household income4. Educational5. Occupation

Adoption of e-Payment Channel by Thai Consumer

1. Automatic Bill Payment (Direct debit)

2. ATM3. Phone Banking4. PC banking

1. What kind of relationship factors of demographics’ profile and psychological influence to Thai consumers adoption in each e-Payment channel?

1. What kind of relationship factors of demographics’ profile and psychological influence to Thai consumers adoption in each e-Payment channel?

2. What different type of Thai consumer prefer to use in each of e-Payment channel?

2. What different type of Thai consumer prefer to use in each of e-Payment channel?

The Hypothesis

e-Payment adoption and demographic factors Gender: Individual males than females are more likely to

adopt e-payment Age: Individuals with mid-age are likely to adopt e-payment Education: Individuals with higher levels of education are

more likely to adopt e-payment Occupation: Individual with high-level of occupation are more

likely to use e-payment e-Payment channel adoption and psychological factors

There are positive associations between the adoption of e-payment channel and the belief (psychological factors) about extent to which the e-Payment possesses the 11 specific attributes identified.

These different e-payment channels lead to null hypothesis These are no difference in the characteristic associated with

the adoption of ABP, ATMs, Phone banking and PC banking.

Research Methodology

Quantitative research in form of questionnaire survey Identify 11 psychological factors with Top-5 Thai bank The questionnaire consist of 3 parts

Part I: Psychological factors (5 likert scale), to measure the belief of Thai consumers toward e-payment channel

Part II: Proxy 10-service payment to measure the reflection of how often the respondents use this entire e-payment channel (a constant sum of 100 points to each channel)

Part III: Demographical record of respondents information• For any case which respondent have not used a particular

before, the questions about the psychological before will be treated as having missing value and the level of adoption would have a zero value.

10-Service proxy (Sum of 100 points)

Payment of credit card bills Payment of bills of telephone service (landline

phone), water, electricity, school and university fee Payment of Hire purchase agreement Payment of Cable TV Payment of Internet usage Payment of postpaid mobile phone Payment of prepaid (top-up) mobile phone Payment of Life insurance Payment of Non-life insurance (automobile, housing

etc.) Payment of Mortgage on house

(selected from Lawson and Todd 2003; Wan, Luk et al. 2005

Statistical Method

First step: the index of e-payment channel usage would be computed by taking the average of the 4-score given to an e-payment channel according to how often the 10-banking service

After that a repeated-measure one-way ANOVA will run on these 4 indices

Sampling Design and Process

Total sample size => 600 (achieved by the self administered questionnaire technique)

400 respondents is recruited in Bangkok (where is represent a large diversity of Thailand.)

Data collection: probabilistic sample design Questionnaire survey in 5 main areas;

ATM users A central business district Shopping mall University and Thai Bank Branch

Thank you

Documents

Adoption of e-Payment By Thai Consumers