Adoption of Digital Wallet: Influencing Factors among Undergraduates in Malaysia
Nuraishah Raimee1*, Logeswary Maheswaran1, Jeya Santhini Appannan1, Nurazwani Mat Radzi1
1 Faculty of Accountancy and Management, Universiti Tunku Abdul Rahman, Selangor, Malaysia
*Corresponding Author: [email protected]
Accepted: 15 June 2021 | Published: 1 July 2021
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Abstract: In the present world, smartphones play an essential role in the daily life of many people. The technological advancement has made smartphones as devices for digital users to make money transactions or payments by using applications installed in the smartphone.
Therefore, the article focuses on the adoption of digital wallet among undergraduates. Our paper also discusses some of the risks and challenges faced by the undergraduates in using a digital wallet. This study methodology is based on the qualitative method. Focus group interview will be conducted with undergraduate students. The study revealed that device compatibility, convenient to use, ease of use, cashback and reward, and strongly influence the use the digital wallet. use the digital wallet. This paper presents the findings of this study by suggesting and providing some implication on how service providers could improve their product and service to ensure alignment with students' preferences.
Keywords: Digital Wallet, Smartphone, Malaysia, Adoption, Undergraduate
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1. Introduction
Decades ago, handphone was a mode for communication solely, as technology upgrade handphone turns as an essential part of human's life. Nowadays, it supports enhanced services and needs of all the stakeholders. (Commision, 2017). The features of handphone that are popularly being chosen were smartphones (Commission, n.d.). The statistics of user increased rapidly from 68.7% in 2016 to 75.9% in 2017 proved that smartphone has turned into the most preferred device among Malaysian. Rise of smartphone users in Malaysia results with an increase of users in e-commerce marketplace in Malaysia; this provides a positive correlation to gross domestic product (GDP) in 2017 to 6.3%. The growth in e-commerce increased the value from RM75.0 billion in 2016 to RM85.8 billion in 2017 (Malaysian Communications and Multimedia Commission, 2018). The meaning of commerce is an activity of buying and selling of goods and services in large scale. In today's era, smartphones are facilitating the new initiation of e-commerce in its way. Nowadays, smartphones have become more prevailing devices. The following chart indicated the number of smartphone users worldwide from 2014 to 2020.
Figure 1: Number of Smartphone users worldwide from 2014 to 2020 Retrieved from (Our Statista Research Department, 2020)
Digital wallet is an electronic device that enables the users to make a commercial transaction which is inclusive of payment. The platform is in the form of software where the personal information is in encrypted for security purposes. Since the world is moving towards digitisation, the digital wallet is expected to develop the current society into cashless (Apanasevic, 2013). Individuals and smartphone had become best buddies and inseparable, it is very convenient to make digital payment and adaptation of digital wallet trendy. Digital wallet, which is popularly known as E-wallet is one of the trendings in E-commerce platforms.
Recently, 78.3% of consumer shops online via their smartphone as it gained its popularity among consumers. It is undoubtedly more convenient to download the e-commerce application through the smartphone and ease the purchase for the users. A few payment methods become the preferred method among the consumers as its third online payment attracts 8.2% of online shoppers to complete their purchase. The majority (60.4%) of them used PayPal, Alipay (16.3%), MOLPay (15.8%) and IPay88 (13.4%) in their online transaction (Malaysian Communications and Multimedia Commission, 2018).
MCMC conducted a survey recently about the use of a smartphone to shop online, and its result skewed towards the younger generation of as 90.2% for the group of below '20s and 84.5% of those in their 20's. Breakdown of the products is as follows by full-time students at 9.2%, whereby 82.8% currently enrolled in university or college while 17.2% in secondary school (Malaysian Communications and Multimedia Commission, 2018).
Digital wallet usage had been mushrooming quickly in Malaysia over the last couple of years, and there are over 40 digital wallet licenses issued by Bank Negara Malaysia (Bank Negara Malaysia, n.d.). There is no sign of reduction of usage shortly. Bank Negara Malaysia aims to make the nation as the cashless nation by 2020, with mobile-based payments being a core to the blueprint. Most of the vendor throughout the country started accepting payment through digital wallets regardless of the size of vendors. Therefore, the objective of this study is to explore the factors of undergraduates in adoption in digital wallet together with discussion some of the risks and challenges faced by the undergraduates in using the digital wallet in the context of Klang Valley Private University students.
2. Literature Review
Digital wallet
A digital wallet is deemed as a digital alter-ego of the physical wallet. It holds the digitised valuables for authorisation that is utilised accordingly to gain access to various goods. The entrance is granted either via password, QR code, facial image or other almost similar entity.
However, the main characteristics of a mobile wallet can be defined as an object that is made up of a liquid crystal display. Smaller than a regular plastic bank card, with preferably a touch- sensitive screen and simple user interface that lets the user flip through the digital wallet in the same way he/she flips through a leather wallet. Erickson (2013) described it as the device that can display and store coupons or account offers from the business which users subscribed or engaged by providing real-time discounts and offers from different business locations. It should also act as the payment tool with inscribed credit and debit cards details in it.
Top Three of Digital wallet company in Malaysia 1) Boost
Boost is no longer regarded as just a regular mobile payment app on the App Store and Play Store. It boasts as Malaysia's homegrown lifestyle digital wallet app that is both secure and rewarding. Boost takes pride in its mission to provide users with a worry-free cashless mobile payment experience throughout the day. Topping up on the Boost app is simple as it partners with 17 banks such as Maybank, CIMB, RHB Bank, Public Bank, Hong Leong Bank, among others. Daily transactions with Boost is also extremely rewarding with cashback, vouchers and various promotions. Since 2017, Boost has accumulated more than 4 million members with its mobile wallet being accepted in over 100 000 touchpoints, including both online and physical stores in Malaysia.
2) TouchnGo wallet
Touch ‘n Go eWallet is a mobile app that integrates the use of the physical Touch ‘n Go Card along with its digital wallet features. It allows users to add in their Touch ‘n Go card number to enable easier tracking of transactions. Other functions which are available on the app for daily usage are payment for movie tickets and transferring of money between TnG E-Wallets.
The apps also provide topping up of E-Wallet for toll usage, purchasing of flight tickets, retail transactions with affiliated merchants and driving through tolls with payment done through deductions from the E-Wallet.
3) GrabPay
Grab is one of the leading e-hailing app Southeast Asia and they are unique as they provide digital wallet feature called GrabPay, which was introduced in Malaysia since 2018. GrabPay conveniently accommodates payments for Grab's car rides and GrabFood, as well as for purchases made at various affiliated outlets such as F&B merchants and cinemas. The loyalty points makes GrabPay usage more existing as the points may enable the conversion into various discount vouchers which may redeemed from Grab Rewards catalogue. By using Grabpay, further discounts for car rides may also be given.
Undergraduate
Current undergraduate is also known as technology society, a survey was conducted among 1300 middle school children, and almost 40% of the respondent agreed they prefer to working with technology-related industry. 89% of responded said a college education is valuable and the path to get into a good job (Barnes & Noble College). Since this generation is frequent users of technology, their attention span is very much shorter (Menendez, Diaz, & Menendez,
2020). The internet speed must be as fast as possible. Undergraduate might be much attached to technology; however, they have their downside by lacking conscientious skills. (Menendez, Diaz, & Menendez, 2020).
Factors influencing adoption of Digital Wallet Convenience
Multiple researched had been conducted to examine the factors resulting in the adoption of digital wallets. The research indicates, the typical usage of digital wallets is for transactions such as transferring money, performing various payments and online shopping. Other benefits from using digital wallets, namely loyalty benefits, minimum interest rates, receipts management, and cash benefits, with greater convenience and ease (Rowland & Shrauger, 2013). This proves that technology provides a more convenient way to deal with money transactions compared to the traditional wallet, thus enhancing their satisfaction.
The consistency of the results is proven in the study by Schoeneman, Mahapatra, Chandola, Napp, & Zola, 2017 on 380 respondents from a large and diverse population in India. The study discovered that positive consumption experiences among the respondents are positively affected by the level of convenience while shopping using digital wallets via their mobile phones. Comfort is defined as "ease of usage of the tool, which improves and permits easy payments, completion of the shopping task, receiving the products delivered, saves time and energy which is required for the shopping process". In the recent study of PWC they state the main reason for the users to switch from the traditional method to the current technology is due to the convenience of using digital wallets. Apart from that the promotions offered by digital wallets such as cashback and rewards and digital receipts attracts the number of digital wallet users in Malaysia (PWC, 2018).
A study by Chauhan in 2017 supported the notion that convenience in using digital wallets is the main contributing factors to adaptation . Study also found that most of the users agree that using digital wallets to make payments is more convenient and less time-consuming. From the study, the responses that gathered was that the convenience of not having to go to physicalstore derived from using the technology has an insignificant impact on the respondents' choice in adopting it.
Device compatibility
Increased uses of smartphones have increased a potential platform for shopping (Tsai & Ho, 2013). The device compatibility is the leading reasons why most people switch from the traditional method of using technology in making their payment example digital wallets.
Another study (Moore & Benbasat, 1991) found that most people prefer utilising digital wallets compared to credit card and cash to complete transaction in malls. Compatibility can be defined as the point to which using a new system which is an innovation system, can be perceived as consistent with the existing values, beliefs, experiences, and needs of individuals (Schierz, Schilke, & Wirtz, 2010). Compatibility also plays an essential element in technology adoption models, and incompatibility of the individual's values with the innovation is bound to obstruct the adoption (Rogers, 2003). Compatibility is expected to affect consumer's attitudes towards digital wallets systems (Aydin, 2016).
Cashback and rewards offered
Cashback and rewards offered, fast service and instant availability is amongst the reason to choose the digital wallet. According to the study conducted by (Chauhan & Shingari, 2017), the feedback from one hundred students who participated in the survey, 52% of them agreed
that the primary reason for switch to using digital wallets is the convenience. while another 41% of them concurred that cashback and rewards offered .On the other hand, 41% of them agreed that digital wallets is proved to be fast and provides better service. In comparison, 39%
of them prefer digital wallets due to instant availability offered by the service.
Ease of use
With the smartphone currently being used for other purposes already, its uncomplicated user interface proves helpful when being short of cash. This is due to its simple one-click pay system which does not require the hassle of filling in details such as card number and password upon every transaction. It allows users to link their digital wallet to bank accounts and therefore makes payments instantaneously. The results, on the other hand, show that fast service offered by the digital wallets, direct and easy operator billing by the system and ease of use of the digital wallets such as phone used for other purposes already, simple user interface helpful when short of cash have significant
Social Influence
Social influence of family, friends and reference plays a major role when adopting a new technology, as uncertainty may be minimised by getting the opinions of others users . In mobile payment systems, this effect may be defined as the way the individuals' social environment perceives (Schierz, Schilke & Wirtz, 2010). This concept in its classical form was defined by (Fishbein & Ajzen, 1975) - as "the person's perception that most people who are important to him think he should or should not perform the behaviour in question". Empirical evidence confirming this assumption was found in the literature on various new technology systems and services settings (Hu, Poston, & Kettinger, 2011).
3. Research Methodology
The purpose of qualitative research is to understand the meaning of people and their experiences in the world through their perspectives (Fraenkel & Wallen, 2006). This study conducted two ways of qualitative research; the open-ended survey and the video recording (Graham and Celia, 2005) among undergraduate students. Besides, the term private university student helps the researchers in narrowing down the scope of this research. There are two main reasons for the researchers decision in engaging university students as the target population in this research. Firstly, based on research conducted by Farag, Schwanen, Dijst, & Faber (2007), young consumers possess a more positive outlook towards internet experience and online shopping as compared to ageing consumers. As they are more internet and technology savvy, it is highly unlikely that these young consumers get irritated quickly and appear disappointed when faced with any challenges while using the mobile wallet. Secondly, university students are heavy users of mobile devices which are one of the technology gadgets in the market (Burns
& Bush, 2014). Students rely tremendously on these technology gadgets while engaging in their daily routines and activities. Therefore, Malaysia's population can be adequately represented by university students at a certain point with the support of the above factors.
4. Discussion and Conclusion
Convenience
A digital wallet is considered to be highly convenient as it aids in eliminating the need to carry the physical wallet. It also assists in better management due to the synchronisation of data from multiple platforms such as bank accounts, credit and debit cards, mobile accounts and billing portals. This enables consumers to make their purchases within seconds by simply tapping on
their mobile device. This efficiency leads to a sense of satisfaction on the consumer’s part. It will be necessary for all wallet solution providers to look at wallet features for best practices, and consistency where feasible, particularly for customer-facing activities at merchants
Respondent 1
" I can pay quickly use my phone over the payment terminal and verifying the purchase by scanning the QR code. The transaction process can be completed in just a few seconds".
Respondent 2
“The digital wallet apps will update and recoded automatically once the payment is made”
Respondent 3
Using digital wallet, I do not have to bring a lot of debit or credit cards when I am shopping. Besides, I no longer bring a lot of cash either. All I need is only tap my handphone and scanned to pay for the items I purchased.
Device compatibility
Almost everyone in today's world uses mobile devices. Many users widely use smartphone and machine have to compatible to use digital wallets. Familiarity one to the device makes one more convenience to use the tool. Digital wallets are used widely as most of the devices now mostly accepting the digital wallet. The introduction of the digital wallet makes the society to become cashless. This new system is a disruptive economy which is becoming new normal in today's society.
Respondent 1
The digital wallet can be easily installed if you own a smartphone.
Respondent 2
Since everyone owns a smartphone and smart devices, the digital wallet eases the burden of the user. We can install digital wallet easy, and there is always no issues with our phones.
Respondent 3
We the younger ones always have a smartphone and still feels that its convenience as we don't have to carry much money with us. Lucky we have these devices compared to years ago during our parent’s time.
Cashback and rewards offered
Rewards, when offered in the form of tangible benefits such as monetary incentives, coupons and free sample gifts, provide a sense of motivation for consumers. This type of reason is extrinsic (Davis et al., 1992), and it targets the specific behaviour of individuals in aiming to achieve desired outcomes. These consumers are driven and willing to make an effort to obtain these rewards and tangible incentives (Kim & Han, 2014); (Varnali, Yilmaz, & Toker, 2011).
This is visible in terms of marketing communication and advertisements, as it was observed that customers' concentration on ads increase when the message includes benefits (Kim & Han, 2014). Scholars assume the extrinsic motivation elements are internalised with values and goals regarded as one's own in the long run (Deci, Vallerand, Pelletier, & Ryan, 1991); (Ryan &
Deci, Self-determination theory and the facilitation of intrinsic motivation, social development,
and well-being., 2000). In this way, the externally regulated behaviour ends up being internally absorbed by consumers through the use of penalties or rewards (Ryan & Connell, 1989). In mobile payment context, the tangible benefits offered for downloading and using mobile wallets such as free value-added services, discounts and internet access may lead consumers to develop positive attitudes and increase one's inclinations towards it.
Respondent 1
There are plenty of promotions available by using digital wallets such as discounts, good deals, cash rebate, reward points, petrol cashback etc. This will encourage the usage of digital wallet.
Respondent 2
I can get cashback when I spend on Boost, the cashback reward can be as low as 50 cents or higher than that. There are also various on-going lucky draw contests every month.
Respondent 3
I can use it for almost everything, including paying my utility bills and get cash back every time.
Ease of use
Phones are now being used for multiple purposes, and its simple user interface proves helpful when short of cash as the digital wallet is one-click pay without filling details about credit card number and passwords every time. It allows the user to link the digital wallet to accounts and pay right away so that the consumers face no issues to enter the details every time a transaction happens.
Respondent 1
"It only takes a few minutes to set up the digital wallet application. Just download the app and follow on-screen instructions to set up your account and add your payment details. Our credit card detail can be stored in the digital wallet, you won't have to fill in the card payment detail every time you want to make a payment”
Respondent 2
"Using a digital wallet is ideal for someone who wants the flexibility to make payments from different accounts. When you come to make a payment, you can choose which card or mobile money account you want to use. This will save space in your actual wallet, as all the information of the cards is already inside the digital wallet apps.
Respondent 3
"Mobile payments apps can perform a variety of tasks like bill payments, ticket bookings, and online shopping through one single app. Therefore, user feels it too easy of use for them because they do not have to remember all the account number. Its has been save.
Social Influence
Social influence plays a vital role in today's life; family and friends become the most influential group. Usually, this leads to a faster change of behaviour and enthusiasm to use the digital wallet. Transitions are difficult in certain people and age group; however, social influence plays a vital role in this. It is human’s nature to be convinced when someone known explains a matter
compared to the unknown person. The social environment of the situation positively impacts the usage of digital wallets.
Respondent 1
All of my friends are using the digital wallet and recommend it.
Respondent 2
Most of the shops accept digital wallet as a payment method; it is many conveniences.
Respondent 3
There is a lot of advertisement at social media's where influencers typically show the benefit of using a digital wallet.
Managerial Implication
Undergraduate is more than ready to embrace the digital wallet technology in Malaysia.
Convenience, ease of use, cashback and rewards will play a significant role in this adoption of the digital wallet. There are many organisations offering digital wallet services to the customers, some being open wallet and some being closed wallet services. For the increased adoption of these services by undergraduate, managers will need to propagate the comfort, and convenience digital wallet payment can bring to their life. This can be depicted in advertisements released by these organisations and also by practical display in shopping zones.
The advertisements can show how easily one can make payments without bothering about the typical transaction-related issues like change, authenticity and calculating of currency notes.
The advertisements can also show how the digital wallet service is capable of saving time and increasing the productivity amongst individuals using these services. In shopping malls and significant showrooms, digital wallet companies can set up kiosks and experience centres to promote the usage of digital wallet services. This direct experience will imbibe a deep understanding of the payment system amongst non-users and bring forward the usefulness and ease of the payment system.
Scope of Future Research and Limitations
This study, however, is not without its limitations. Due to time and cost constraints, it was able to focus solely among undergraduate students. The results, therefore, are inadequate to conclude the whole view of the intention of private university students in the adoption of digital payment. Hence, the results cannot be generalised and representing undergraduates' adoption of digital mobile. Secondly, overall consumers are highly educated. The respondents are holding high educational qualifications, such as bachelor of degree or are professionals.
Nevertheless, consumers with lower educational qualifications might have different intentions to adopt digital payment. The findings will provide better generalisation if targeted on respondents from a broader range of education qualifications in future research. In this research, the measures of constructs are studied only conducted from a qualitative perspective.
Therefore, an individual's intention to adopt digital payment may change over time for better or worst. Hence there is still more scope for adding to this area of research.
Conclusion
In conclusion, mobile payment is convenient for the users as there is no need to carry much cash nor payment cards. Smartphones enable these mobile payments rather seamlessly with a single click hence attracting younger users to embrace this payment method. These digital wallets also provide a better payment option as there is a cumulative points system whereby points can be redeemed later. Digital wallets are usually designed in such a manner where it
gives ease to the users, and therefore, adaptability will be easy. In a nutshell, the younger generation is all ready to embrace the usage of digital wallets. With the use of digital wallets emerging steadily in the country, it is certainly interesting to see the positive impact it has to the user and the overall development of the GDP of the country in the world.
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