FACTORS AFFECTING CONSUMER BEHAVIOR OF PAYMENT CARD USERS IN VIETNAM45481

VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS FACTORS AFFECTING CONSUMER BEHAVIOR OF PAYMENT CARD USERS IN VIETNAM Nguyen Quang Huy, Nguyen Thi Thu May Foreign Trade University ABSTRACT This study aims to examine the role of factors affecting the payment cards use of Vietnamese consumers based on the Unified Theory of Acceptance and Use of Technology model These factors are verified through a sample of 101 consumers living in Hanoi The results show that the five factors strongly impacting on the payment cards use of Vietnamese consumers (from high to low) are Facilitating conditions; Perceived creditability; Social influence; Performance expectance; Effort expectance, which all have positive impact on the payment cards use of Vietnamese consumers Finally, the study draws conclusion and some recommendations for commercial banks and the future Performance researches expectancy Key words: Payment card, Consumer behavior, Vietnamese consumers, Banking Effort expectancy INTRODUCTION Behavioral Use intention behavior The payment card is known as a morden and versatile technology that brings immense benefits to consumers, banks and the society It helps customers to pay Social infuence faster and more easily, banks to mobilize idle capital among the population, and governments to manage the amount of money coming in and out of market more closely and effectively Hence, payment card and non-cash payment methods are Facilitating becoming widely used, to be a new trend in the next era conditions In recent years, the card circulation market in Vietnam has made positive progress when the number of circulating increasedExperience annually According to the 2019 Gendercards has Age Voluntariness Report of Vietnam Bank Card Association, by the end of 2018, theofnumber of use circulating cards reached over 86 milion, an increase of 12% compared to 2017 In particular, international cards grew higher than domestic cards, at 17% compared to 11% Nevertheless, the growth rate of card usage continued to decline significantly, only 8% in 2018, compared to 12% 2017 and 22% in 2016 Obviously, consumer behavior on payment card has varied from year to year Banks, therefore, need to 291 IN TERNATIONAL CONFERENCE ON - CIFBA 2020 change their business strategies in order to meet the consumer needs It is essential for banks to be aware of what factors influence consumer behavior of payment cards users This study aims to clarify the role of payment cards for consumers and the society, with a group of factors affecting consumer behavior of payment card users in Vietnam The research objectives are to identify factors that influence payment card usage on consumer behavior; identify opportunities and challenges of banks in the non-cash payment market in Vietnam, and then propose solutions to promote the use of payment cards in Vietnam The following sections of this article include: (i) Literature review; (ii) Research methods; (iii) Empirical Results and discussion; (iv) Conclusion and recommendations LITERATURE REVIEW 2.1 Theory of consumer behavior Consumer behavior is “behavior that consumers exhibit in finding, buying, using and evaluating products and services that they expect will satisfy their individual needs” (Peter D Bennet, 1988) It is also “a process that describes how consumers make (+)eliminating a type of product or service” (Charles W decisions about choosingH1 and Effort expectancy Lamb, Joseph F Hair and Carl McDaniel, 2000) Companies study consumer interests H2 (+)behavior to identify the customers’ needs, Use Performance and habits Specifically, companies find what consumers want to buy, why they buy acceptance expectancy the product/service and brand, how, where and when to buy it, and how much to build a marketing strategy in order to motivate consumers to choose their products/ services (Philip Kotler, 2001) Nowadays, the study of consumer behavior has gone H3 (+)whether consumers are aware of the benefits of the Social infuence even further Companies study purchased products/services (Performance Expectancy), how consumers perceive and evaluate after using products/services Consumers’ perception will affect subsequent purchases andH4the (+)information to other consumers (Social influence) Facilitating conditions 2.2 Affecting factors In local and international studies, the factors affecting consumer behavior have (+) Some typical studied factors affecting consumer Preceived been studied officially andH5 clearly behaviorcreditability on the choice to use the service in general and payment cards in particular, such as: H6 H7 As for research on electronic payment methods, the “Factors affecting consumer AgeMing, Yen Teoh and perception of electronic payment methods” Gender research (Wendy ctg, 2013) shows that the three factors of benefit, efficiency and effort expectancy are significantly related to consumer perceptions of e-payments This study measured the impact levels of deteminants affecting consumer perceptions of e-payment services 292 VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS As for internet banking research, there are two researches: “Factors affecting the use of internet banking in Mauritius” (Dineshwar Ramdhony and Ashvin Ramjee, 2010) and “Conducting research and application of the Unified theory of Acceptance and Use Technology (UTAUT) in using internet banking” (Anoop Gorecha, 2005) Dineshwar and Ashvin’s research uses the theory of Technology Acceptance Models (TAM), Theory Plan of Behaviour (TPB) and Destroyed Theory of Plan (DTP) Anoop Gorech’s research aims to carry out the UTAUT model research into internet banking usage behavior research Both studies have been very successful in clarifying the factors that influence internet banking behavior 2.3 Consumer behavior model Numerous researches have looked at factors that influence consumer acceptability and use Researchers use a variety of theories to explain Kwong et al (2002) showed that Reasonable Action Theory (TRA), Theory of Planed Behaviour (TPB) and Technology Acceptance Model (TAM) are used for most researches on technology adoption All the above discrete theories, along with a number of other models, are consolidated by Venkatesh & David (2003) in the unified theory of technology adoption and use - Unified Theory of Acceptance and Use of Technology (UTAUT, 2003) The model is shown as follows: Picture Unified Theory of Acceptance and Use of Technology Source: Research of Venkatesh & David (2003) The UTAUT model identifies four factors that directly affect user’s acceptance and user’s behavior, including: Effort expectancy, Performance expectancy, Social influence and Facilitating conditions There are also peripheral factors (gender, age, willingness and experience) that adjust to the intended use In particular, Effort expectancy is defined as the extent to which an individual believes by using the 293 IN TERNATIONAL CONFERENCE ON - CIFBA 2020 system will help to achieve high work efficiency Performance expectancy describes the ease of use of the system Social influence is the extent to which an individual perceives others that they should use the new system And Facilitating condition is defined as the extent to which an individual believes that an organization with the same technical infrastructure exists to support the use of the system 2.4 Empirical model UTAUT has been experimentally tested, demonstrating superiority to other current models in the research method of Venkatesh (2003), Park et al (2007) and Venkatesh & Zhang (2010) However, this model is still less applicable in the study of the acceptance of using payment cards instead of cash of consumers in Vietnam In addition, through an overview of domestic and foreign research models, the authors choose to apply the UTAUT model and add a perception factor about reliability At the same time, reducing the two factors of voluntariness of use and experience to reflect the research areas to increase the value of explaining practical behavior related to the above problem The research model is proposed and tested as follows: Picture Empirical model selected Source: Compiled by the authors Based on the proposed research model as above, the authors give the research hypothesis: - H1: Consumers’ performance expectancy achieved by using a payment card which 294 VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS have a positive impact on the acceptance of payment card usage - H2: Consumers’ effort expactancy have a positive impact on the acceptance of the acceptance of payment cards - H3: Social influence has a positive impact on consumers’ acceptance of payment cards usage - H4: Consumers’ perceived creditability has a positive impact on the acceptance of payment cards usage - H5: Consumers’ facilitating conditions have a positive impact on the acceptance of payment cards usage - H6: Consumers’ gender has the effect of regulating their acceptance of payment cards usage - H7: Consumers’ age has the effect of regulating their acceptance of payment cards usage RESEARCH METHODS 3.1 Sample collection Research topics include market analysis, searching, information surveys, synthesizing information, applying theory to practice, etc Because of limited research time and scope, the authors focus on implementation in Hanoi, from April 29, 2019 to May 4, 2019 Subjects surveyed are consumers who have been using payment cards and are living in Hanoi Convenient, non-probability sampling methods, questionnaires sent via social networks and popular online communication channels in Vietnam 3.2 Research methods - Quantitative method: The author collects information for studying by conducting a direct consumer survey in Hanoi - Descriptive statistics analysis: Data processing project uses SPSS 20 software with the following tools: + Testing Cronbach’s Alpha reliability coefficients to verify whether data collection is reliable or not by Alpha coefficient; + Exploring factor analysis EFA finds valuable factors in measurement; + Means analysis of factors; + Using multivariate regression models to determine the influence of each factor on consumers’ payment cards usage EMPIRICAL RESULTS AND DISCUSSION Statistical sample characteristics: The female sample consists of 58 women accounting for 57.4%; 43 men account for 42.6% The majority of people aged 18-22 years old, 36 people account for 35.6%; at the age of 23-30, there are 33 people, accounting for 32.7%; in the age group of 31-40, there are 18 people, 295 IN TERNATIONAL CONFERENCE ON - CIFBA 2020 accounting for 17.8%, the remaining over 40 years old are 14 people, accounting for 13.9% Education level, most of them have University degree with 77 people (76.2%), there are 13 people at postgraduate level accounting for 12.9%, Intermediate people make up 5.9%, the rest College with people (accounting for 5%) In terms of card usage time, most consumers use it for more than years with 59 people (accounting for 58.4%) The results are listed in the table below: Table Statistical sample characteristics Criteria Gender Age Education level Card usage time Quantity Percentage (%) % Aggregate Female 58 57,4 57,4 Male 43 42,6 100 From 18 to 22 years old 36 35,6 35,6 From 23 to 30 years old 33 32,7 68,3 From 31 to 40 years old 18 17,8 86,1 Over 40 years old 14 13,9 100 Intermediate 5,9 5,9 College 5,0 10,9 University 77 76,2 87,1 Postgaduate 13 12,9 100 Below year 7,9 7,9 From1 to years 34 33,7 41,6 Over years 59 58,4 100 Total 101 100 Source: Compiled by the authors based on research results Table Summary table of measurement results for scales Variable Crоnbаch’s Аlрhа Crоnbаch’s Аlрhа if Item deleted Performance expectancy 0,728 0,728 Effort expectancy 0,802 0,802 Social influence 0,792 0,792 Preceived creditablity 0,860 0,860 Facilitating conditions 0,862 0,862 Use acceptance 0,701 0,701 Scale Source: Compiled by the authors based on research results All scales have Cronbach’s Alpha coefficient greater than 0.7 which has good measurement significance Hence, after the reliability assessment, these factors will be included in the next EFA discovery factor analysis 296 VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS Compatibility test of Exploratory Factor Analysis model (KMO) and correlation test of observed variables (Barllet’s Test) Table KMO аnd Bartlett’s Test Value Comparision KMO 0,853 0,5 < 0,856 0.05, the difference between two sex groups of consumers is not different The author will use t-test results in the assumption of equal variance with Sig of using payment cards equal to 0.332 > 0.05 Therefore, the author can conclude that: At the 95% confidence level, there is no statistically significant difference in the payment cards usage of Vietnamese consumers between male and female groups The hypothesis H6 is rejected Testing of the difference by age To assess the difference between consumer groups by age, the author conducted ANOVA variance analysis with alpha level = 5% (95% confidence level), obtaining the following results: Table 10 ANOVA Sum of squares SD Df Mean square Between Groups 1.031 344 Within Groups 26.537 97 274 Total 27.568 100 F 1.256 Sig .294 Source: Compiled by the authors based on research results ANOVA test results from SPSS 20 show that: Table 4.15 Levene test for significant homogeneous variance (Sig = 0.112> 0.05), meaning that there is no difference in variance of groups Next, the results of testing the differences between groups also show that there is no difference between groups (Sig = 0.294> 0.05 (Table 4.16) Thus, it can be concluded: At the 95% confidence level, there is no statistically significant difference in Vietnamese consumers’ payment cards usage among the four different age groups of consumers The H7 hypothesis is rejected CONCLUSION AND RECOMMENDATIONS 5.1 Conclusion Based on theories of behavior and previous researches, the author has built a model of factors affecting the payment cards usage of Vietnamese consumers The results show that the scales for Facilitating conditions, Preceived Creditablity, Social Influence, Performance Expectancy and Effort Expectancy all have direct and positive impacts on payment card usage of consumers This research result is completely consistent with the research result of the model of UTAUT of Venkatesh & David (2003) In addition, there is no difference in behavior between men and women and between different ages Although the study has attempted different demographic sampling to enhance representation, samples were only collected in Hanoi Further research may expand the scope of the survey to obtain better information At the same time, expand the study to non-cash payment methods in general 300 VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS 5.2 Recommendations The research’s result shows the order of importance of factors affecting consumers’ choice to use payment cards Hence, the author focuses on proposing solutions to the factors with high weight (immensely influence) Some proposed solutions are as follows: To Facilitating conditions Bank should choose convenient locations to set up a branch, which will reduce concerns whenever going through the bank’s transaction office In addition, bank need to invest more into modern systems, machines, supporting facilities to make customer transactions convenient and professional To Perceived creditablity First of all, banks should establish a regime of confidentiality of personal information and properties for customers in the safest way In addition, banks need to have a clear policy on compensation for customers when banks make unsafe card payments This is considered a table of commitment to customers in ensuring the safety and privacy of bank customers To Social influence Banks need a creative and innovative marketing team in order to specify values with communication products so that consumers can understand those values are truthfulness and clearly This is an effective method to create influence in society nowaday When a bank owns one or more media publications that are well received by people, the reputation of that bank will be better, from which consumers will trust more To Performance expectancy Banks need to propagate and advertise widely so that customers can realize the convenience of paying via cards such as saving time, customers can make financial payments anywhere and whenever Moreover, the bank should offer simpler policies and transaction procedures so that customers can save time To Effort expectancy Banks need to conduct customer surveys on a regular basis about the advantages and disadvantages that customers are facing when performing non-cash payment in general and paying card in particular They should regularly upgrade supporting devices, build new programs which is more simple and easier to implement in noncash payment * Corresponding author Email address: loanvu.kttn@gmail.com  301 IN TERNATIONAL CONFERENCE ON - CIFBA 2020 REFERENCE [1] Aw, Y.C., Abd Hamid, N.R and EAW, H.C., 2011, “Risk perception of the e - payment systems: a young adult perspective”, Proceedings of the 10th WSEAS International Conference on Artificial Intelligence, Knowledge Engineering and Data Bases (AIKED), Cambridge, February [2] Abrazhevich, D., 2004, “Electronic payment systems: a user-centered perspective and interaction design”, PhD thesis, Technical University of Eindhoven, Eindhoven [3] Samaneh Tavakoli Hashjin - Dr Younos VakilaRoaia - Dr Mohammad Hemati, 2014, “The study of Factors influencing the accepting of Internet Banking (Case Study: Bank Sepahin Alborz Province)”, Arabian Journal of Business and Management Review No 7, Feb 2014 [4] Wendy Ming - Yen Teoh & Ctg, 2013, “Factors affecting consumers’ perception of electronic payment: an empirical analysis”, Internet Research, No.4 [5] Hanudin Amin, 2010, “Factors Affecting the Decisions of Tabung Haji Customers in Malaysia to Use ATM Banking: An Empirical Investigation”, The Journal of Internet Banking and Commerce [6] Safeena et al, 2010, “Customer Perspectives on E-business Value: Case Study on Internet Banking”, Journal of Internet Banking and Commerce, vol 15, no [7] Anoop Gorecha, 2005, “Application of The Unified Theory of Acceptance and Use of Technology to Internet Banking”, The University of Nottingham [8] Chien Yi - Wen and Sharon A Devaney, 2001, “The effects of credit attitude and socioeconomic factors on credit card and installment debt”, Journal of Consumer Affairs, pp 162 - 179 [9] Lee, M C., (2009), “Factors influencing the adoption of internet banking: An integration of TAM and TPB with perceived risk and perceived benefit”, Electronic commerce research and applications, pp 130 - 141 302 ... behavior of payment cards users This study aims to clarify the role of payment cards for consumers and the society, with a group of factors affecting consumer behavior of payment card users in Vietnam... 2.1 Theory of consumer behavior Consumer behavior is ? ?behavior that consumers exhibit in finding, buying, using and evaluating products and services that they expect will satisfy their individual... purchases andH4the (+)information to other consumers (Social influence) Facilitating conditions 2.2 Affecting factors In local and international studies, the factors affecting consumer behavior have