Tapping into the Future: What Drives Generation Z to Adopt Digital Payments?
Keywords:
Intention to adopt digital payment, Technology Acceptance Model, Perceived Usefulness, Perceived Ease of Use, Social Influence, TrustAbstract
Research aims:
Gen Z tends to be early adopters of technology, and by understanding what motivates them to adopt digital payments, businesses and financial institutions can innovate and develop products that better cater to their needs and preferences, which can lead to the development of more user-friendly and secure payment solutions. The study aims to empirically test the factors determining intention to adopt digital payment among Zillennial or Generation Z who use e-wallet
Design/Methodology/Approach:
Using a convenience sampling technique, an online survey was conducted to collect data from Gen Z living in 15 districts in Pekanbaru, yielding 220 usable responses that were analyzed using Partial Least Square Structural Equation Modelling.
Research findings:
The study findings highlighted that perceived usefulness, perceived ease of use, and trust have a significant positive effect on Gen Z’s intention to adopt digital payment. However, social influence does not show a significant impact.
Theoretical Contribution/Originality:
This study’s findings contribute to the literature by examining the determinants of intention to adopt digital payment by utilizing the Technology Acceptance Model (TAM) as underpinning theory. Specifically, this study provides new insight into determinants of intention to adopt digital payment among Gen Z, who have a deeply intertwined relationship with technology, characterized by an almost innate understanding and reliance on digital tools and platforms.
Practical/Policy/Social Implications:
Gen Z tends to be early adopters of technology, and by understanding what motivates them to adopt digital payments, businesses and financial institutions can innovate and develop products that better cater to their needs and preferences, which can lead to the development of more user-friendly and secure payment solutions.
Research Limitations/Implications:
The first limitation is this study focus only on Gen Z and left other cohort unexamine. Studies across cohorts could provide more significant insights into determining factors of digital financial services adoption across generations. Furthermore, this cross-sectional study was conducted at a specific time, so the causal relationships could not be established. Hence, researchers in the future may employ a longitudinal strategy to analyze changes in the intention to adopt technology and their effects across time, and might broaden the sample to include different cohorts.
References
Aboelmaged, M. and Gebba, T.R. (2013) ‘Mobile Banking Adoption: An Examination of Technology Acceptance Model and Theory of Planned Behavior’, International Journal of Business Research and Development, 2(1). Available at: https://doi.org/10.24102/ijbrd.v2i1.263.
Akhtar, S. et al. (2019) ‘Factors influencing individuals’ intention to adopt mobile banking in China and Pakistan: The moderating role of cultural values’, Journal of Public Affairs, 19(1), p. e1884. Available at: https://doi.org/10.1002/pa.1884.
Alswaigh, N. and Aloud, M. (2021) ‘Factors Affecting User Adoption of E-Payment Services Available in Mobile Wallets in Saudi Arabia’, p. 222. Available at: https://doi.org/10.22937/IJCSNS.2021.21.6.29.
Alswaigh, N.Y. and Aloud, M.E. (2021) ‘Factors Affecting User Adoption of E-Payment Services Available in Mobile Wallets in Saudi Arabia’, International Journal of Computer Science & Network Security, 21(6), pp. 222–230. Available at: https://doi.org/10.22937/IJCSNS.2021.21.6.29.
Anderson, J.C. and Gerbing, D.W. (1988) ‘Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach’, Psychological Bulletin, 103(3), pp. 411–423.
Andrade, C. (2020) ‘The Limitations of Online Surveys’, Indian Journal of Psychological Medicine, 42(6), pp. 575–576. Available at: https://doi.org/10.1177/0253717620957496.
Ansam, H. (2022) Hasil Survey di Pekanbaru dan 6 Kota Besar Lainnya, Nilai Transaksi Bulanan Uang Elektronik Capai Rp 35,1 Triliun, GoRiau.com. Available at: https://www.goriau.com/berita/baca/hasil-survey-di-pekanbaru-dan-6-kota-besar-lainnya-nilai-transaksi-bulanan-uang-elektronik-caai-rp-351-triliun.html (Accessed: 18 June 2024).
de Bel, J. and Gâza, M. (2011) Mobile Payments 2012 – My Mobile, My Wallet? Amsterdam: Inopay, pp. 1–100.
Cain, M.K., Zhang, Z. and Yuan, K.-H. (2016) ‘Univariate and multivariate skewness and kurtosis for measuring nonnormality: Prevalence, influence and estimation’, Behavior Research Methods, 49(5), pp. 1716–1735. Available at: https://doi.org/10.3758/s13428-016-0814-1.
Chawla, D. and Joshi, H. (2019) ‘Consumer attitude and intention to adopt mobile wallet in India – An empirical study’, International Journal of Bank Marketing, 37(7), pp. 1590–1618. Available at: https://doi.org/10.1108/IJBM-09-2018-0256.
Chin, W.W., Marcolin, B.L. and Newsted, P.R. (2003) ‘A Partial Least Squares Latent Variable Modeling Approach for Measuring Interaction Effects: Results from a Monte Carlo Simulation Study and an Electronic-Mail Emotion/Adoption Study’, Information Systems Research, 14(2), pp. 189–217. Available at: https://doi.org/10.1287/isre.14.2.189.16018.
Chitungo, S.K. and Munongo, S. (2013) ‘Extending the Technology Acceptance Model to Mobile Banking Adoption in Rural Zimbabwe’, in. Available at: https://www.semanticscholar.org/paper/Extending-the-Technology-Acceptance-Model-to-Mobile-Chitungo-Munongo/f3a295d88983bba56d9264b96f3197faa8bf7027 (Accessed: 23 November 2023).
Chong, A.Y.-L., Chan, F.T.S. and Ooi, K.-B. (2012) ‘Predicting Consumer Decisions to Adopt Mobile Commerce: Cross Country Empirical Examination Between China and Malaysia’, Decision Support Systems, 53(1), pp. 34–43. Available at: https://doi.org/10.1016/j.dss.2011.12.001.
Christensen, L.B., Johnson, R.B. and Turner, L.A. (2015) Research methods, design, and analysis. 12. ed., global ed. Boston, Munich: Pearson.
Cohen, J. (1988) Statistical power analysis for the behavioral sciences. 2nd ed. Hillsdale, N.J: L. Erlbaum Associates.
Contini, D. et al. (2011) ‘Mobile Payments in the United States: Mapping Out the Road Ahead’, p. 57.
Davis, F.D. (1989) ‘Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology’, MIS Quarterly, 13(3), p. 319. Available at: https://doi.org/10.2307/249008.
Faqih, K.M.S. and Jaradat, M.-I.R.M. (2015) ‘Assessing the moderating effect of gender differences and individualism-collectivism at individual-level on the adoption of mobile commerce technology: TAM3 perspective’, Journal of Retailing and Consumer Services, 22, pp. 37–52. Available at: https://doi.org/10.1016/j.jretconser.2014.09.006.
Gomber, P., Koch, J.-A. and Siering, M. (2017) ‘Digital Finance and FinTech: current research and future research directions’, Journal of Business Economics, 87(5), pp. 537–580. Available at: https://doi.org/10.1007/s11573-017-0852-x.
Gopay (2023) Serba-serbi Sistem Pembayaran Digital untuk Bisnis, GoPay - Aplikasi Ringan untuk Transfer & Bayar. Available at: https://gopay.co.id/blog/sistem-pembayaran-digital (Accessed: 13 January 2025).
Hahn, E.D. and Ang, S.H. (2017) ‘From the editors: New directions in the reporting of statistical results in the Journal of World Business’, Journal of World Business, 52(2), pp. 125–126. Available at: https://doi.org/10.1016/j.jwb.2016.12.003.
Hair, J.F. et al. (2017) A primer on partial least squares structural equation modeling (PLS-SEM). Second edition. Los Angeles: Thousand Oaks: Sage.
Hair, J.F. et al. (2019) ‘When to use and how to report the results of PLS-SEM’, European Business Review, 31(1), pp. 2–24. Available at: https://doi.org/10.1108/EBR-11-2018-0203.
Hanafizadeh, P. et al. (2014) ‘Mobile-banking adoption by Iranian bank clients’, Telematics and Informatics, 31(1), pp. 62–78. Available at: https://doi.org/10.1016/j.tele.2012.11.001.
Hartman, M.E. (2006) ‘E-Payments Evolution’, in T. Lammer (ed.) Handbuch E-Money, E-Payment & M-Payment. Physica-Verlag HD. Available at: https://doi-org.ezproxy.um.edu.my/10.1007/3-7908-1652-3_2 (Accessed: 15 June 2022).
Hsu, C.-L., Wang, C.-F. and Lin, J.C.-C. (2011) ‘Investigating customer adoption behaviours in Mobile Financial Services’, International Journal of Mobile Communications, 9(5), pp. 477–494. Available at: https://doi.org/10.1504/IJMC.2011.042455.
Kock, N. (2015) ‘Common Method Bias in PLS-SEM: A Full Collinearity Assessment Approach’, International Journal of e-Collaboration, 11(4), pp. 1–10. Available at: https://doi.org/10.4018/ijec.2015100101.
Kock, N. and Lynn, G. (2012) ‘Lateral Collinearity and Misleading Results in Variance-Based SEM: An Illustration and Recommendations’, Journal of the Association for Information Systems, 13(7), pp. 546–580. Available at: https://doi.org/10.17705/1jais.00302.
Kurniawan, A. (2022) Website DJKN. Available at: https://www.djkn.kemenkeu.go.id/kpknl-semarang/baca-artikel/14974/Hikmah-Pandemi-Covid-19-Dompet-Digital-Naik-Daun.html (Accessed: 13 January 2025).
Lazar, J., Feng, J.H. and Hochheiser, H. (2017) Research methods in human computer interaction. 2nd edition. Cambridge, MA: Elsevier.
Liébana-Cabanillas, F. et al. (2020) ‘Assessment of mobile technology use in the emerging market: Analyzing intention to use m-payment services in India’, Telecommunications Policy, 44(9), p. 102009. Available at: https://doi.org/10.1016/j.telpol.2020.102009.
Lisana, L. (2022) ‘Understanding the key drivers in using mobile payment among Generation Z’, Journal of Science and Technology Policy Management [Preprint]. Available at: https://doi.org/10.1108/JSTPM-08-2021-0118.
Luarn, P. and Lin, H.-H. (2005) ‘Toward an Understanding of the Behavioral Intention to Use Mobile Banking’, Computers in Human Behavior, 21(6), pp. 873–891. Available at: https://doi.org/10.1016/j.chb.2004.03.003.
Malhotra, N.K. (2010) Marketing Research_ An Applied Orientation. sixth edition. Pearson.
Mayer, R.C., Davis, J.H. and Schoorman, F.D. (1995) ‘An Integrative Model of Organizational Trust’, Academy of Management Review, 20(3), pp. 709–734. Available at: https://journals.aom.org/doi/abs/10.5465/amr.1995.9508080335?journalCode=amr (Accessed: 14 January 2025).
McKnight, D.H., Choudhury, V. and Kacmar, C. (2002) ‘Developing and Validating Trust Measures for e-Commerce: An Integrative Typology | Information Systems Research’, Information Systems Research, 13(3), pp. 334–359. Available at: https://doi.org/10.1287/isre.13.3.334.81.
Media, K.C. (2023) Survei Visa: 67 Persen Masyarakat Indonesia Bersiap Tinggalkan Uang Tunai, KOMPAS.com. Available at: https://money.kompas.com/read/2023/04/10/213000026/survei-visa--67-persen-masyarakat-indonesia-bersiap-tinggalkan-uang-tunai (Accessed: 13 January 2025).
Milly, N. et al. (2021) ‘Measuring Mobile Banking Adoption in Uganda Using the Technology Acceptance Model (TAM2) and Perceived Risk’, Open Journal of Business and Management, 09(01), pp. 397–418. Available at: https://doi.org/10.4236/ojbm.2021.91021.
Mondego, D. and Gide, E. (2018) ‘The Effect of Trust on Mobile Payment Adoption: A Comprehensive Review of Literature’, International Journal of Arts & Sciences, 11(01), pp. 375–390. Available at: https://acquire.cqu.edu.au/articles/ (Accessed: 14 January 2025).
Najib, M. and Fahma, F. (2020) ‘Investigating the Adoption of Digital Payment System through an Extended Technology Acceptance Model: an Insight from the Indonesian Small and Medium Enterprises’, International Journal on Advanced Science, Engineering and Information Technology, 10(4), pp. 1702–1708. Available at: https://doi.org/10.18517/ijaseit.10.4.11616.
Nguyen, O.D.Y. and Cassidy, J.F. (2018) ‘Consumer intention and credit card adoption in Vietnam’, Asia Pacific Journal of Marketing and Logistics, 30(4), pp. 779–796. Available at: https://doi.org/10.1108/APJML-01-2017-0010.
Nisa, U.K. and Solekah, N.A. (2022) ‘The Influence of TAM, Social influence, Security Relationship toward Intention to Use E Wallet through Attitude and Trust’, Iqtishoduna, 18(1), pp. 35–50. Available at: https://doi.org/10.18860/iq.v18i1.12916.
Nuryasman, M. and Warningsih, S. (2021) ‘Determining Factors Of Digital Wallet Usage’, Jurnal Manajemen, 25(2), pp. 271–289. Available at: https://doi.org/10.24912/jm.v25i2.740.
Pahlevi, R. (2022) Pasar E-Wallet Indonesia Diproyeksikan Capai US$70 Miliar pada 2025 | Databoks, https://databoks.katadata.co.id/. Available at: https://databoks.katadata.co.id/teknologi-telekomunikasi/statistik/699ccd21d4e8aa6/pasar-e-wallet-indonesia-diproyeksikan-capai-us70-miliar-pada-2025 (Accessed: 13 January 2025).
Patel, K.J. and Patel, H.J. (2018) ‘Adoption of internet banking services in Gujarat: An extension of TAM with perceived security and social influence’, International Journal of Bank Marketing, 36(1), pp. 147–169. Available at: https://doi.org/10.1108/IJBM-08-2016-0104.
Prastiawan, D.I., Aisjah, S. and Rofiaty, R. (2021) ‘The Effect of Perceived Usefulness, Perceived Ease of Use, and Social Influence on the Use of Mobile Banking through the Mediation of Attitude Toward Use’, Asia Pacific Management and Business Application, 009(03), pp. 243–260. Available at: https://doi.org/10.21776/ub.apmba.2021.009.03.4.
Preacher, K.J. and Hayes, A.F. (2008) ‘Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models’, Behavior Research Methods, 40(3), pp. 879–891. Available at: https://doi.org/10.3758/BRM.40.3.879.
Rahardja, U. et al. (2023) ‘Technological readiness and its impact on mobile payment usage: A case study of go-pay’, Cogent Engineering, 10(1), p. 2171566. Available at: https://doi.org/10.1080/23311916.2023.2171566.
Ramayah, T. et al. (2018) Partial Least Square Structural Equation Modelling (PLS-SEM) using Smart PLS: An Updated and Practical Guide to Statistical Analysis. Second Edition. Pearson Malaysia Sdn Bhd.
Ringle, C.M., Wende, S. and Becker, J.-M. (2022) ‘SmartPLS 4’. Oststeinbek: SmartPLS GmbH. Available at: http://www.smartpls.com.
Saif, M.A.M. et al. (2022) ‘Determinants of the Intention to Adopt Digital-Only Banks in Malaysia: The Extension of Environmental Concern’, Sustainability, 14(17), p. 11043. Available at: https://doi.org/10.3390/su141711043.
Shankar, A. and Datta, B. (2018) ‘Factors Affecting Mobile Payment Adoption Intention: An Indian Perspective’, Global Business Review, 19(3_suppl), pp. S72–S89. Available at: https://doi.org/10.1177/0972150918757870.
Singh, S. and Srivastava, R.K. (2018) ‘Predicting the intention to use mobile banking in India’, International Journal of Bank Marketing, 36(2), pp. 357–378. Available at: https://doi.org/10.1108/IJBM-12-2016-0186.
STATISTA (2024) Indonesia: online transaction value 2023, Statista. Available at: https://www.statista.com/statistics/958171/indonesia-online-transaction-value/ (Accessed: 12 June 2024).
Sullivan, G.M. and Feinn, R. (2012) ‘Using Effect Size—or Why the ρ Value Is Not Enough’, Journal of Graduate Medical Education, 4(3), pp. 279–282. Available at: https://doi.org/10.4300/JGME-D-12-00156.1.
Teoh, W.M.-Y. et al. (2013) ‘Factors affecting consumers’ perception of electronic payment: an empirical analysis’, Internet Research, 23(4), pp. 465–485. Available at: https://doi.org/10.1108/IntR-09-2012-0199.
To, A.T. and Trinh, T.H.M. (2021) ‘Understanding behavioral intention to use mobile wallets in vietnam: Extending the tam model with trust and enjoyment’, Cogent Business & Management. Edited by C. Gomez Corona, 8(1), p. 1891661. Available at: https://doi.org/10.1080/23311975.2021.1891661.
Tsu Wei, T. et al. (2009) ‘What drives Malaysian m‐commerce adoption? An empirical analysis’, Industrial Management & Data Systems, 109(3), pp. 370–388. Available at: https://doi.org/10.1108/02635570910939399.
Ullah, S. et al. (2022) ‘Consumers’ Intention to Adopt m-payment/m-banking: The Role of Their Financial Skills and Digital Literacy’, Frontiers in Psychology, 13, p. 873708. Available at: https://doi.org/10.3389/fpsyg.2022.873708.
Venkatesh et al. (2003) ‘User Acceptance of Information Technology: Toward a Unified View’, MIS Quarterly, 27(3), p. 425. Available at: https://doi.org/10.2307/30036540.
Visa (2023) 2 dari 3 orang Indonesia bersiap meninggalkan uang tunai – Survei Visa. Available at: https://www.visa.co.id/about-visa/newsroom/press-releases/nr-id-230410.html (Accessed: 13 January 2025).
Wulandari, C.S. (2023) Dompet Digital Naik Daun, Membetot Minat Kala Pandemi, https://www.bi.go.id/id/bi-institute. Available at: https://www.bi.go.id/id/bi-institute/BI-Epsilon/Pages/Dompet-Digital--Naik-Daun,-Membetot-Minat-Kala-Pandemi.aspx (Accessed: 13 January 2025).
Yang, M. et al. (2021) ‘Cashless Transactions: A Study on Intention and Adoption of e-Wallets’, Sustainability, 13(1), pp. 1–18. Available at: https://www.mdpi.com/2071-1050/13/2/831 (Accessed: 14 January 2025).
