Factors influencing adoption of payments banks by Indian customers: extending UTAUT with perceived credibility
| Date | 21 March 2019 |
| Published date | 21 March 2019 |
| DOI | https://doi.org/10.1108/JABS-07-2017-0111 |
| Pages | 173-195 |
| Author | Kriti Priya Gupta,Rishi Manrai,Utkarsh Goel |
| Subject Matter | Strategy,International business |
Factors influencing adoption of payments
banks by Indian customers: extending
UTAUT with perceived credibility
Kriti Priya Gupta, Rishi Manrai and Utkarsh Goel
Abstract
Purpose –The purpose of this paperis to investigate the factors influencing the behavioralintention to
adopt paymentsbanks services by Indian underbankedand unbanked population.
Design/methodology/approach –The proposedmodel has assimilated factors from the UnifiedTheory
of Acceptance and Use of Technology(UTAUT) along with perceived credibility. The factors of UTAUT
include performanceexpectancy, effort expectancy, facilitationof conditions and social influence. Apart
from testing the direct relationships of the model constructs with the behavioral intention to adopt
payments banks services, the study has also explored mediating and moderating effects of certain
constructs. The research model has been empirically tested using 660 responses from a field survey
conducted in New Delhi –the capital city of India –by using the structured equation modeling (SEM)
technique. The target respondents of the study are small businessmen and migrant laborers who are
eitherunderbanked or unbanked.
Findings –The findings of thestudy reveal that the model is able to explain 67.5 per centof the variance
in behavioral intention. The results indicate that all the factors are direct determinants of behavioral
intention. Perceivedcredibility is found to be the strongest influencerof behavioral intention. The findings
also indicate thatperceived credibility partially mediates therelationships between ‘‘social influence and
behavioral intention’’and ‘‘performance expectancy and behavioralintention.’’ The relationship between
performanceexpectancy and behavioral intention is also foundto be moderatedby facilitatingconditions
and effort expectancy.
Research limitations/implications –As this studyis based on a conveniencesample of respondents of
only one city of India, this could negatively reflect on the generalizability of results across other cities.
Moreover, the study has only focused on the perceptions of small businessmen and migrant laborers.
This raisesconcerns regarding the applicabilityof the results for other segments ofthe current population
that have different demographic characteristics (e.g. occupation, income, education level and
technology experience). Modifying the conceptual model presented in this research to include
‘‘experience’’ and ‘‘age’’as moderators can also be worth considering in future. Although this study has
extended the UTAUT to include perceivedcredibility, the results of the explanatory power of the model
indicate that there is still room for improvement. Therefore, including other constructs, e.g. hedonic
motivation, perceived risks and trialability, could be a fruitful path forward. Future studies may also
examine the factors influencing the actualuse behavior of payments banks, rather than just behavioral
intention.
Practical implications –The study looks forwardto providing the payments banks serviceproviders in
India with suitable guidelines for effectively implementing and designing payments banks services.
Specifically, the results of this study have provided clues for Indian payments banks service providers
about the crucial role of perceivedcredibility in influencing the behavioral intention to adopt payments
banks. Therefore, service providers have to initially be sure that payments banks are able to conduct
financial transactions efficiently, securely and within less time, along with the availability of information
required by customers to successfully use the services. Service providers should enhance customer
confidence and trust by providing secure and reliable services. They should also emphasize on the
positivesafety measures of the payments banks during any marketingcampaign rather than just creating
brand awareness.
Kriti Priya Gupta is based at
Management Studies,
Symbiosis Center for
Management Studies,
Noida, Uttar Pradesh, India.
Rishi Manrai is based at the
Symbiosis Center for
Management Studies,
Noida, Uttar Pradesh, India.
Utkarsh Goel is based at
Management Studies,
Indian Institute of
Information Technology
Allahabad, Allahabad, Uttar
Pradesh, India.
Received 26 July 2017
Revised 15 March 2018
23 July 2018
Accepted 22 October 2018
DOI 10.1108/JABS-07-2017-0111 VOL. 13 NO. 2 2019, pp. 173-195, ©Emerald Publishing Limited, ISSN 1558-7894 jJOURNAL OF ASIA BUSINESS STUDIES jPAGE 173
Originality/value –The study representsa substantial contribution to the existingknowledge regarding
mobile payment channels in particular and technology acceptance area in general. In fact, this study
presentsa worthwhile direction by examining paymentsbanks services, which, so far, havenot been well
evaluated in the Indian context. To the best of the authors’ knowledge, this is an early attempt toward a
holistic and integrativeapproach to explain adoption of payments banksin India. Although prior studies
have addressed mobile banking and mobile payment adoption, the strength of this research lies in
combining the UTAUT constructs with perceived credibility. This is evidenced by the high explanatory
power (67.5per cent) of the research model adoptedin this study.
Keywords UTAUT, Mobile financial services, Behavioural intention, Indian unbanked customers,
Payments banks
Paper type Research paper
1. Introduction
The banking and financial industry has shown remarkable growth worldwidein the recent past,
both in terms of volume and complexity (Leeladhar, 2006). However, it has been found that the
banking sector outreach varies across countries (Beck et al.,2007). Only half of the adult
population in developing countries –precisely 54 per cent –has access to bank accounts,
compared to a whopping 94 per cent in OECD countries (Demirguc-Kunt et al.,2015). There
are several factors that constrain traditional bank usage in developing cou ntries. First, bank
accounts tend to be expensive because of yearly maintenance fees and other non-pecuniary
opening costs (Beck et al.,2008). Second, traditional banking is associated with several
disadvantages, such as long transaction queues, long-distance bank branches and short or
changeable operating hours (Dupas et al.,2012). Third, consumers may be too poor to
generate sufficient financial savings to bear the transaction costs (Bachas et al. ,2016).
The advancements in mobile technologyin banking and payment industry has introduced a
range of new functionalities in numerous mobile financial services (MFS), such as bank
account transfers, Peer to Peer (P2P) transfers, auto bill payments and proximity-based
payments at the point of sale.Traditional banks and other non-bank entities, which earlier
had problems in providing gainful banking services through customary channels to
underprivileged clients, acknowledge MFS as a form of ‘branchless banking” (Ivatury and
Mas, 2008), which reduces the costs of providing service to low-income customers.
Consequently, banks introduced multiple service access techniques through various
delivery channels, such as automatic teller machine (ATM) and Web and mobile phones
(Laukkanen & Pasanen, 2007). MFS has transformed the global financial and banking
industry in the past few years as it providesadded convenience to existing bank customers
in developed markets and offers new services to the underbanked or unbanked customers
in emerging markets. Governmentsin developing countries see MFS as a vehicle to achieve
financial inclusion, especiallyamong their rural and poor population.
In India, access to banking services is limited in remote and rural areas, and 40 per cent of
the country is outside the ambitof formal banking (Venkataramakrishnan, 2016). The reason
behind this limited access is that citizens live too far from the nearest financial services
institutions, and the cost of using these servicesis high. With the intention of ensuring higher
financial inclusion by increasing the reach of the financial and banking services, the
Government of India (GoI) is promoting MFS in the country through mobile banking, PPIs
(pre-paid instruments or e-wallets) and payments banks. Although mobilebanking and PPIs
have been in use in India for quite some time, payments banks is a relatively new concept.
Payments banks is a modern initiative of the GoI, which was launchedin 2014 based on the
concept of Kenya’s payments bank M-Pesa (Mas and Morawczynski, 2009). Payments
banks are basically stripped-down versions of banks, which can be promoted by existing
non-bank PPI cos, non-banking finance companies, mobile operator companies and/or
supermarket chains, and can deliver services such as “acceptance of demand deposits,
issuance of ATM/debit cards, payments and remittance services through various channels,
PAGE 174 jJOURNAL OF ASIA BUSINESS STUDIES jVOL. 13 NO. 2 2019
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