Factors influencing willingness to use debit cards among vietnamese card holders transaction cost and rational choice perspectives

Rationale

In recent years, developing a “cashless economy” becomes a crucial objective of Vietnam government and the whole banking system Thanks to the efforts of Vietnam government, especially the State Bank of Vietnam, commercial banks and other financial institutions, there are many modern means of payments available in this country such as plastic cards, bank transfer, e-wallet, and cryptocurrencies However, currently, cash is still the most popular means of payment in this country (World Bank, 2020).

Among various modern non-cash payment methods that have emerged in Vietnam, debit cards still play a distinct role in developing a cashless economy due to several reasons First, debit cards have entered Vietnam since 1990 (Pham, 2008) As the first non- cash means of payment in Vietnam, this type of plastic card has dominated the digital payment market in terms of popularity until now Moreover, everyone can use debit cards even though they do not have access to Internet or smartphones Also, debit cardholders are not required to meet complicated credit conditions compared to credit card users (Foscht et al., 2010) In fact, the Vietnamese government and commercial banks has taken great efforts for many years to increase the number of debit cards among the public. Specifically, State Bank of Vietnam has issued many policies to facilitate the cooperation between Vietnamese commercial banks and the international card networks as well as completed legal frameworks for efficient management of debit card use, the installment and operation of POS and ATM points On the other hand, Vietnamese commercial banks have also taken initiatives in implementing aggressive strategies to encourage more adoption of debit cards such as advertising, personal selling, or cooperating with other companies to offer promotions for debit card users at the point of sales or open bank accounts for paying salaries Thanks to the push of both Vietnamese government and the whole banking system in increasing debit card penetration, until the last day of the first quarter of 2020, the total number of debit cards is 86 million (State Bank of Vietnam,

2020) while the total population of this country is approximately 96 million Given the high penetration rate of debit cards among the public, raising the usage rate of debit card should be the quickest and the least costly way to achieve a cashless economy in this country.

Despite high popularity, the actual use of debit cards among Vietnam cardholders is relatively low A report by Euromonitor International (2019) revealed that Vietnamese cardholders mostly use debit cards to withdraw cash for daily payment transactions In other words, the debit card in Vietnam does not function as a truly substitute for cash as it is supposed In fact, the debit card market in this country has saturated since 2017 when each bank account owner has more than one debit card in average (Fiin Group, 2017). However, until 2020, only 22 percent of Vietnamese citizens have made or received card payments in the previous year (Work Bank, 2020) Even in urban areas where 90% of citizens had adopted a debit card since 2017 (Vietnam Bank Card Report, 2017), nearly a half of them reported to use only cash for all financial transactions in the past three months upon a survey conducted in 2019 (FT Confidential Research, 2019) Compared to other nearby developing countries such as Indonesia, Philippines, Malaysia, or Thailand, Vietnam is even more cash-based (FT Confidential Research, 2019).

Cash culture is deeply rooted among Vietnamese cardholders and this reflects in both low number of debit card transactions and the high value of each debit card transaction (Euromonitor International, 2019) In fact, the amount of spending per debit card in Vietnam is even one of the highest in Asia Pacific (Euromonitor International, 2019) This implies the fact that although Vietnamese debit card holders acknowledge the usefulness of debit cards in high value transactions, they still tend to use cash more frequently for other daily payments The development of a cashless economy is, therefore, not based on how much debit cards are available but how much they are used in daily transactions as a truly substitute for cash.

The distinct situation of Vietnamese debit card market raises a critical question regarding how to raise the actual usage rate of debit cards as a true substitute for cash.Previous studies have examined determinants of individuals’ intention and behavior to use plastic money Those research treated the use of plastic cards based on different perspectives such as a reasoned action or a planned behaviour (Ali et al., 2017; Amin,2013; Worthington et al., 2007); a technology adoption (Kissi et al., 2017; Makanyeza andMutambayashata, 2018; Oanh and Cassidy, 2018) or even a lifestyle (Ahmed et al., 2010;Nga et al., 2011; Khare et al., 2012) Correspondingly, the literature revealed two prominent sets of determinants (1) an individual’s perception towards the various benefits that plastic card usage can offer to them and (2) the individual’s capabilities to attain such benefits Based on these findings, previous research proposed two primary suggestions to encourage the behavior of using plastic cards including (1) enhancing their perceived benefits and (2) facilitating individuals’ access to plastic cards Nevertheless, those measures are mostly suitable for those who have not adopted the cards yet while inadequate to solve the issue of low actual usage rate among the card holders The reason is that the card holders have already adopted the card and had knowledge of the cards’ benefits upon their own experience.

Different from the nonusers, those who have already adopted debit cards have two alternative choices of payment methods: (1) paying directly by cash or (2) using their banks’ money transferring services associated with their cards In fact, the debit card use fundamentally features a transaction for associated debit card services in which the service provider or the “seller” is the issuing bank while the “buyer” is the cardholder Whether the debit cardholders select card instead of cash for making payment, therefore, depends on their willingness to involve in such banking transaction.

As the core of Marketing science, a transaction between the “seller” and the

“buyer” is the fundamental outcome of the market exchange (Bagozzi, 1975) A transaction not only incurs transaction costs but also provides value to the transactors(Dyer, 1997; Walker and Weber, 1984; Williamson, 1998) However, there is a lack of literature which treats the use of debit cards as a transaction to examine comprehensively costs and benefits of debit card transactions and test their impacts on the willingness to use the card.

Purpose, subject, and scope of the research

The general objective of this dissertation is examining the impacts of perceived transaction costs and perceived benefits on willingness to use debit cards under the theoretical frameworks of the transaction cost economics theory and the rational choice theory In order to give insights into those relationships, this dissertation further explores the moderators in the impacts of perceived transaction costs and perceived benefits on the willingness to use the card Based on the findings, this dissertation aims to providing new suggestions for effectively raising the actual usage rate of debit cards among Vietnam cardholders, contributing to the development of a cashless economy in this country.Correspondingly, this dissertation targets the following specific objectives:

- Identifying dimensions of debit card transaction characteristics, perceived transaction costs and perceived benefits associated with the debit card transaction.

- Proposing a conceptual model linking determinants of the willingness to use debit cards with mediating and moderating effects.

- Evaluating the situation of debit card usage in Vietnam based on the cardholders’ perception about debit card transactions and their willingness to use the cards.

- Testing and comparing the impacts of perceived transaction costs and perceived benefits associated with debit card transactions on the willingness to use the card.

- Testing the mediating effects of perceived transaction costs in the relationship between three primary dimensions of a transaction including asset specificity, uncertainty, and transaction frequency on the willingness to use debit cards.

- Examining and comparing how the habit of using cash and two determinants of financial literacy in Vietnam, including education level and location (urban/rural) (Morgan and Trinh, 2019), could moderate the impacts of perceived transaction costs and benefits on the willingness to use debit cards.

- Proposing new strategies for commercial banks and new policies for the Vietnamese government in encouraging actual use of debit cards in circulation.

The primary subjects of this dissertation include the determinants of willingness to use debit cards for making payment for goods and services of Vietnamese card holders as well as the significance and magnitudes of those relationships.

- Research context: Even though debit cards could be used in many contexts to serve a variety of needs for the cardholders such as cash withdrawal, deposit, and money transferring either at banks or via Internet, mobile, and POS, this study gives the primary focus on the choice of debit cards over cash for accessing money transferring services via POS at the points of purchase only for several reasons First,when debit cards are selected for making payments of goods and services, they demonstrate their fundamental function as an alternative for cash Second, given the substantial number of daily commercial transactions, encouraging the use of debit cards for making payments at points of sale will significantly contribute to the overall usage rate of debit cards and thereby, accelerate the development of a cashless economy.

- Research space: Vietnamese debit cardholders who have already adopted debit cards issued by commercial banks operating within Vietnam.

- Research period: Secondary data was collected from 2013 to 2020 Primary data was collected in 2019.

Research methodology

Based on the research objectives, this study will adopt both positivistic and interpretivistic perspectives Firstly, since there is a lack of literature which treats debit card usage as a transaction to examine perceived transaction costs and benefits associated with the use of the card, the interpretivistic paradigm allows to explore the underlying dimensions of those costs and benefits Next, the postivistic paradigm will enable the measurement of these constructs for further estimating and evaluating the hypothesized relationships between perceived costs and benefits associated with the use of debit cards and the willingness to use the card Following those research paradigms, this research will firstly apply the inductive research approach to start with observations which will be then conceptualized to develop the full meanings and measurement scales for perceived costs and benefits of using debit cards as a transaction Next, the deductive research approach is employed in which the transaction cost economics theory and rational choice theory provide the theoretical underpinnings for developing research models and hypotheses which are then subjected to quantitative analysis for testing (Malhotra and Birks, 2006).

Both descriptive and causal research design are employed in this study. Correspondingly, mixed research methods are employed in this dissertation Specifically, this dissertation applies the following research methods:

(1) Meta-analysis method: Secondary information from the previous reports and studies that are relevant to the research objects are collected, summarized, and analyzed Specifically, this dissertation reviews the literature regarding the factors affecting the intention to use plastic cards which were conducted either in Vietnam or foreign countries to compare their approaches, methods, and findings The literature review is then combined with the situation analysis regarding national policies and commercial banks’ strategies on raising debit card usage and the actual usage rate of debit cards in Vietnam to reveal the knowledge gaps and clarify research objectives.

(2) Qualitative research method: In-depth interviews with Vietnamese debit cardholders were conducted The findings of the qualitative study support the development of research hypotheses, conceptual model, and measurement properties.

(3) Quantitative research method: A quantitative survey method with the employment of questionnaire will be implemented afterwards to test the proposed hypotheses in the conceptual model The research findings provide a scientific basis to draw some implications for both the government and commercial banks to increase the usage rate of debit cards among the card holders in Vietnam Before the survey data are used for testing the research hypotheses, the reliability and validity of measurement items for constructs used in the conceptual model are evaluated This dissertation follows the guideline suggested by Anderson and Gerbing (1988) to test measurement scales based on the exploratory factor analysis, confirmatory factor analysis and the calculation of Cronbach’s Alpha Since the conceptual model features both moderating and mediating relationships, structural equation modelling (SEM) analysis is adopted on both AMOS 22 (for testing direct and mediating relationships) and Warp PLS (for testing moderating relationships).

Figure 1 features the research process of this dissertation First, based on the literature review on factors affecting the use of plastic cards and the context of

Vietnam debit card market, this dissertation reveals the practical issues about the low debit card usage among card holders in Vietnam and the knowledge gap regarding the willingness to use debit cards for money transferring services over cash among the card adopters In order fill those gaps, an exploratory study is conducted in which in-depth interviews are employed to not only explore dimensions of costs and benefits associated with debit card use as a transaction but also adapting and developing measurement scales for dimensions of a debit card transactions The findings from the in-depth interviews also support the formulation of a conceptual model and relevant hypotheses A survey is then conducted for testing the measurement scales and hypotheses Finally, statistical results are reported for further discussion and implication.

Structure of the dissertation

The willingness, intention, and behaviour to use debit cards

Behavioral intention is a central construct and also the only predictor of human behaviour in the theories of reasoned action and planned behaviour (Ajzen, 1991) This construct refers to the extent to which an individual plans or intends to engage in a specific behaviour, given a goal state As to reflect to the motivational factors underlying a goal-driven behaviour, behavioral intention is measured by items such as “In (time frame), do you intend to do (behavior)?” or “Do you plan to engage in (behavior) over the next (time frame)?”.

However, not all behaviors are planned, or goal-based due to risky or uncertain situations Correspondingly, the prototype/willingness model was developed to help explain and predict the probability of risky behaviors (Gerrard et al., 2002; Gibbons et al., 2003; Gibbons et al., 2006) In this model, behavioral willingness is employed as the central antecedent of behaviour given a risk-conducive environment As to refer to the willingness to engage in a behaviour, this construct is measured by the extent that a person is willing to conduct such behaviour and the probability that the behaviour would occur. There are a few studies which provides empirical evidence that behavioral willingness and behavioral intention are two independent predictors of human behaviour in which behavioral willingness adds to the “predictive validity” of behavioral intention, especially for uncertain behaviour (Gerrard et al., 2006; Gibbons et al., 2004; Spijkerman et al., 2005; Thornton et al., 2002; van Empelen and Kok, 2006) Meanwhile, others treat behavioral willingness and behavioral intention as alternatives since these constructs are similar in their nature and only different in the contexts upon which they occur (Ajzen and Fishbein, 2005; Fishbein, 2008) Specifically, while behavioral intention is used to predict a particular behaviour which are planned with clear goal states, behavioral willingness is more relevant to behaviors in uncertain circumstances where it is difficult to plan and set a clear goal.

This dissertation focuses on the behaviour of using debit cards for making payment of goods and services among Vietnamese debit card holders In fact, most of previous studies examine this use behaviour through the proximal antecedent of behavioral intention while there is a lack of literature on the behavioral willingness to use debit cards.The reason is that these researches treat the usage of debit cards as a planned behaviour based on the theoretical underpinnings of theory of reasoned action/ planned behaviour, theory of technology adoption model, and the unified theory of acceptance and use of technology However, in this dissertation’s research context, it is argued that it is difficult to plan the behaviour of using debit cards for making payment of goods and services at points of purchase due to several reasons.

First, the retail sectors in Vietnam are not fully modernized The POS machines have not installed in many points of sales yet, especially in traditional markets Even when debit cards are accepted at the payment time, the cardholders still face many risks and uncertainty regarding their use of debit cards such whether the POS system works properly, the debit cards may be lost or stolen and whether they themselves remember to bring debit cards with them Those risks were referred loss risk, theft risk, unavailability risk, and unacceptance risk (Cheng et al., 2011; Karoubi et al., 2016) associated with plastic card use in previous studies.

Second, debit cards require the cardholders to deposit a specific amount of money into their accounts while there is always the probability that the issuing banks may make mistakes in transferring money or the debit card information is stolen As a result, the cardholders those who do not completely trust the banking system would be uncertain about whether banking transactions are always conducted and recorded correctly and whether their debit card information and the deposit itself are secured The difficulties in controlling the issuing banks’ performance, therefore, further make them unsure about whether debit cards should be planned for making payments This was also mentioned as performance risk or fraud risk related to the use of plastic cards (Cheng et al., 2011; Karoubi et al., 2016).

Third, habit of using cash has been deeply rooted among many Vietnamese people while withdrawing money is relatively convenient in this country given a wide network of ATM points As a result, the choice of using debit cards or cash in some cases is not really rational and planned or goal driven.

Based on the above discussion, it is argued that the behaviour of debit cards in this research context is more associated with a risk-conducive or uncertain environment, instead of a planned, goal-stated one Therefore, instead of behavioral intention, behavioral willingness is more relevant to predict this use behaviour This dissertation, therefore, gives the focus on the antecedents of the willingness to use debit cards.

Although there is a lack of literature on the determinants of willingness to use plastic cards, given the fact that behavioral willingness and behavioral intention are similar in their natures and highly correlated (Pomery et al., 2015) while behavioral willingness is a proximal determinant of use behaviour, the next section will discuss the literature review about the intention and behaviour to use plastic cards.

Determinants of intention and behaviour to use plastic cards

1.2.1 Plastic card usage as a planned behaviour/a reasoned action

The causal relationship between an individual’s beliefs and their behaviour is a crucial research stream in social psychology The reasoned action approach has provided one of the most popular contributions to measuring attitudes and predicting intention and behaviour This approach was primarily built upon the theory of reasoned action proposed by Fishbein and Ajzen (1975) and the theory of planned behaviour by Ajzen (1985, 1991). These two prominent theories of the reasoned action approach have provided a basis for designing strategies aiming at influencing behaviour (Fishbein and Ajzen, 2010) The underpinning concept of these two theories is that there is a psychological process upon which the belief that an individual forms about executing an action will eventually shape their behaviors The central construct of the two theories is intention, a motivational variable, which refers to the likelihood that an individual plans and invests effort in pursuing a behaviour.

The theory of reasoned action was the earliest version of this approach Specifically, the reasoned action theory was rooted in the social psychological research stream regarding the relationship between attitude and behaviour It is widely believed that an attitude is “a state of readiness to act” In other words, an individual acts consistently with his or her attitude Fishbein and Ajzen (1975) distinguished two types of attitudes which differ in the targets of what they evaluate including (1) attitudes toward a non- behavioral target such as general objects, people, institutions, or concepts and (2) attitudes toward a specific behavioral performance In comparison between two types of altitudes, Fishbein and Ajzen (1975) believed that the attitude toward performing a specific behaviour is a more precise predictor of an individual’s performance and therefore, this type of attitude is featured in the theory of reasoned action In more details, based on the expectancy–value attitude model, this attitude is formed by specific beliefs towards the likelihood of particular outcomes resulted from performing a behaviour Further, Fishbein and Ajzen (1975) asserted that besides attitudes, behavioral intention is also shaped by

“perceived normative pressure”, or the degree to which people perceive that those who are important to them would either expect or support their performance of the behaviour.Similar to attitude, perceived

Attitudes normative pressure is shaped by a set of specific beliefs, also called normative beliefs. Those beliefs refer to an individual’s expectations about how much the behaviour is approved or disapproved by specific individuals or groups This also pertains to the extent to which an individual is motivated to comply with those referents In general, the theory of reasoned action treats attitudinal and normative components as the two prominent predictors of intention to perform a specific behaviour In addition, if there is any other variable which influences the intention, such effect is only indirect and must be mediated by either the attitudinal component or the normative component or both In short, the theory of reasoned action asserts that an individual intends to implement a behaviour when they form a favourable attitude toward their performance and perceive that their important referents approve such behaviour.

Further, in the late 1980s, Ajzen (1985, 1991) expanded the theory of reasoned action to include the third determinant of behavioral intention called “perceived behavioral control” upon his consideration of behaviors that may not under the full control of the individual The concept of perceived behavioral control is similar to that of the self- efficacy construct (Bandura, 1986) Specifically, this variable pertains to the extent to which an individual perceives that they are capable to implement a specific behaviour. This also demonstrates another belief-based construct in which the individual’s sense of capability is formed by their beliefs about factors which either facilitate or impede the behavioral performance The addition of perceived behavioral control results in the development of the planned behaviour theory In this theory, behavioral intention is reasonably and directly driven by three belief-based constructs including attitudes (attitudinal belief), subjective norms (normative belief) and perceived behavioral control (control belief) that an individual holds about the behaviour and relating situational factors The conceptual model of the theory of reasoned action and planned behaviour is shown in Figure 1.1.

Figure 1.1: Theory of reasoned action/ planned behaviour (Fishbein and Ajzen,

These two theories have become a popular basis for various extended theories and empirical studies since their simplicity and flexibility allow their widely adoption in various behavioral contexts The literature reveals a number of researches which adopt either the theory of reasoned action or the theory of planned behaviour to explain the determinants of intention to use plastic cards (Ali et al., 2017; Amin, 2012; Amin, 2013; Worthington et al., 2007) In those research, plastic card usage was treated as a behaviour and the intention to perform this behaviour is shaped by attitudes towards various potential benefits of plastic card usage, the extent to which the reference groups approve and expect the use of plastic cards as well as the individual’s capacity to use the card However, these researches either modified or expanded the reasoned action approach to fit with the research contexts and purposes.

Amin (2012) expanded the theory of reasoned action to add financial cost, knowledge of Islamic credit card, financial recommendation, and demographic factors such as age, marital status, education level, and religion in explaining the use of credit cards Based on data collected from 354 individuals, the study revealed that attitudes have an insignificant effect on the use of Islamic credit card while the new constructs including financial recommendation, knowledge on Islamic credit card and demographic characteristics have significant impacts on the selection of the Islamic credit card.

Figure 1.2: Conceptual framework in a research by Amin (2012)

Amin (2013) adopted and expanded the theory of reasoned action to examine the determinants of intentions to use Islamic credit cards upon Islamic banking system inMalaysia Since this research focused on bank customers who were aware of the availability of credit cards and even how to use it, this research neglected the impact of behavioral control Instead, it only examined the effect of subjective norms and attitude while adding a new factor, perceived financial cost, to predict the intention to use the Islamic credit card of Pakistan bank customers Based on the regression analysis of quantitative data drawn from 257 bank customers living in Malaysia, the study revealed that subjective norms and attitudes towards the use of Islamic credit cards positively and significantly affect the intention to adopt the card Meanwhile, a significant negative impact of perceived financial cost on the intention to use Islamic credit cards was found. Among the three factors, attitudes demonstrated the strongest impact on intention to use the card Similarly, Ali et al (2017) revisited the same conceptual model and employed a quantitative data drawn from 466 bank customers living in the Pakistan’s biggest city to examine the intention to select Islamic credit cards in this country The study revealed that the hypotheses regarding the effects of subjective norms, attitudes, and perceived financial costs towards the use of Islamic credit cards were all supported and subjective norms hold the strongest impact on intention to use the card.

Figure 1.3: Conceptual framework in research by Amin (2013) and Ali et al.

Theory of planned behaviour was also adopted to examine the intention to use either debit cards or credit cards in some previous studies in both Vietnam and other foreign countries However, their findings are not consistent.

Sari and Rofaida (2011) tested whether the theory of planned behaviour could explain the intention to use credit cards Their study was conducted based on quantitative data collected from 100 university staff members The findings showed that the theory fits with the context of using credit cards very well in which attitudes towards using credit cards demonstrated the strongest impact Similarly, Haghighi et al (2012) examined determinants of debit card usage at points of purchase based on the theory of planned behaviour They tested the conceptual framework indicating the

Perceived financial cost impacts of attitudes, subjective norms, and perceived behavioral control on intention to use the card based on quantitative data collected from 163 purchasers in Tehran city, Iran The findings supported that all the three constructs under the theory of planned behaviour were significant to predict the selection of debit cards Among the three constructs, attitudes also were the strongest determinant However, when Nugroho et al (2018) applied the theory of planned behaviour to examine the use of plastic cards among undergraduate students, the results drawn from 290 respondents showed that only subjective norms and perceived behavioral control had positive and significant effects on intention to choose plastic cards while attitudes did not hold such effect.

Le (2015) applied the theory of planned behaviour to examine the factors affecting the intention to use Visa credit cards among 320 Vietnamese bank customers The author also expanded this theory by adding “perceived financial cost” as a new potential determinant in the model This variable represents customers’ perception towards the fees or bank charges for using the card The research results revealed that all the hypothesized relationships were supported Among the constructs, perceived financial cost represented the strongest impact on the intention to use the card.

Figure 1.4: Conceptual framework in a research by Le (2015)

A study by Trinh and Vuong (2019) also demonstrated an effort to expand the theory of planned behaviour by adding “perceived risk” as a new construct to predict the intention to use credit cards among Vietnamese bank customers Based on the data of 402 respondents, the research revealed that all the three constructs featured in the theory of planned behaviour and perceived risks were significant determinants of Vietnamese bank customers’ intention to use credit cards The findings indicated that attitudes towards the card, perceived behavioral control and social norms had positive impacts while perceived risk had a negative effect on the intention to use the card.

Figure 1.5: Conceptual framework in research by Trinh and Vuong (2019)

1.2.2 Plastic card usage as a technology adoption

As one of the innovative efforts of the banking system to either reduce the availability of cash or mitigate the shortage of cash in the economy (Makochekanwa, 2016), plastic cards can be considered as a technology in the banking service industry (Patil, 2014; Rooplata and Sathya, 2016; Sultana and Hasan, 2016; Szmigin and Bourne, 1999) As a result, the use or selection of plastic cards represents technology adoption and this refers to the success of plastic cards as a technology (Alwahaishi and Snášel, 2013; Davis, 1989; Min et al., 2008).

In the context of technology adoption, actual use behaviour is described as how much the individual uses that technology in their daily routines while behavioral intention is regarded as the degree to which an individual intends to perform such use behaviour (Carlsson et al., 2006; Harsono and Suryana, 2014) An understanding of factors affecting the use behaviour and intention to use technology or accept innovations has grasped a lot of interest among both academia and practitioners The literature revealed two prominent models, the theory of technology adoption model and the unified theory of acceptance and use of technology, which have been widely used to explain the use of plastic cards as the acceptance and adoption of a technology.

Theory of technology adoption model

The technology acceptance model, also known as TAM, was first proposed by Davis

Research gaps

Table 1.1 summarizes the factors influencing the intention and behaviour of using plastic money in previous studies In general, the literature reveals that there are two primary research streams in examining the factors affecting the intentions and behaviors to use plastic cards: (1) from the benefit perspective and (2) from the cost perspective.

Upon the benefit perspective, there are two prominent sets of factors including (1) an individual’s perception towards the various benefits that plastic card usage can offer to them and (2) the individual’s capabilities to attain such benefits Specifically, the factors such as “attitude”, “perceived usefulness”, “performance expectancy”, and “convenience” imply the “functional benefits” of the cards or how the use of plastic cards benefits the holders in helping them accomplish their tasks with efficiency (Ali et al., 2017; Amin,2013; Kissi et al., 2017; Oanh and Cassidy, 2018; Worthington et al., 2007) Similarly, the construct “social influence”, “social norms”, and “status” indicate the “social benefits” of using plastic cards in meeting the expectation of the individuals’ reference groups (Ali et al., 2017; Amin, 2012; Oanh and Cassidy, 2018;

Worthington et al., 2007) or showing off one’s social status (Khare et al., 2012) In addition, “hedonic motivation” reflects the “emotional benefits” of adopting plastic cards in providing pleasure and enjoyment for the users (Makanyeza and Mutambayashata,

2018) Likewise, as a lifestyle, using plastic cards provides “psychological benefits” since it helps individuals satisfy their needs of attaining their personal values or desired status (Ahmed et al., 2010; Nga et al., 2011; Khare et al., 2012) On the other hand, the factors such as “perceived ease of use”, “perceived self-efficacy”, “effort expectancy” and

“facilitating conditions” could be conceptualized as the individuals’ accessibility and capacity to obtain the above benefits Correspondingly, the practical implications of previous studies mostly focus on enhancing and promoting the perceived benefits of while facilitating better access to the use of plastic cards However, in addressing this research’s question regarding how to enhance the actual usage rate of debit cards as a true substitute for cash among Vietnamese debit card holders who have already get access to debit cards and had experience about the benefits of debit cards very well, those measures are obviously inadequate.

Based on the cost perspective, there are two prominent factors emerged as determinants of the intention or the actual behavior to select plastic cards, including

“processing time” and “financial cost” However, time and financial cost is two among many other costs incurred in a transaction In fact, the perceived transaction costs associated with the use of debit cards are beyond customers’ perception towards financial costs of debit card use as featured in the literature Moreover, a transaction not only incurs transaction costs but also implies benefits (Dyer, 1997; Watson et al., 2005) As a transaction, perceived benefits of using debit cards may be beyond the perceived usefulness or attitude towards how debit cards could facilitate doing tasks as suggested by previous studies For example, by selecting to associate with debit card transaction instead of cash payment, the card holders could attain some add-on benefits following some promotional programs which are offered by both their banks and suppliers of goods or services at the point of sales In spite of that, there is a lack of literature which treats the use of debit cards as a transaction to examine how cardholders’ perception of costs and benefits associated with such transaction could influence their willingness to select debit cards for making payments.

Table 1.1: Summary about factors influencing the intention and behaviour to use plastic cards

Benefits of plastic cards in facilitating tasks or express values and lifestyle

Attitudes Ali et al (2017); Amin (2012);

Amin (2013); Le (2015); Haghighi et al (2012); Sari and Rofaida (2011); Trinh and Vuong (2019)

Kissi et al (2017); Makanyeza and Mutambayashata (2018)

Hedonic motivation Kissi et al (2017); Makanyeza and

Mutambayashata (2018) Convenience Khare et al (2012)

Personal values Ahmed et al (2010); Khare et al.

(2012); Nga et al (2011); Willis and Worthington (2006)

Benefits of using plastic cards in meeting reference groups’ expectation

Social norms Ali et al (2017); Amin (2013); Le

(2015); Haghighi et al (2012); Nugroho et al (2018); Oanh and Cassidy, 2018; Sari and Rofaida (2011); To (2016); Trinh and Vuong (2019)

Social influence Kissi et al (2017); Makanyeza and

Ability to obtain the benefits of plastic

Perceived control behavioural Le (2015); Haghighi et al (2012);

Nugroho et al (2018); Sari and Rofaida (2011); Trinh and Vuong cards (2019)

Other factors Habit Kissi et al (2017); Makanyeza and

In addition, previous studies mostly approached the use of plastic cards as a single option while neglecting their alternative choices In this research context, it is argued that unlike the non-users, the card holders have already adopted and had certain experience of using the debit cards Therefore, they are capable to use the cards while social norms regarding the use of debit cards may be no longer important to them Instead, they face two alternative choices when they need to make payment: (1) paying directly by cash or

(2) using their banks’ money transferring services associated with their cards Their decision to use debit cards over cash, therefore, primarily depends on their willingness to involve in debit card transaction facilitated by their banks given certain risks and uncertainties involved The costs and benefits associated with those transactions may, in turn, influence the extent to which the cardholders are willing to use debit cards for payment transactions However, even when behavioral willingness and behavioral intention are used interchangeably, the above literature reveals knowledge gaps regarding what benefits and costs associated with the use of debit cards as a transaction governance mode are and how those transaction costs and benefits may influence the debit cardholders’ willingness to select the card for executing their payment transactions.

Research questions

In response to the above research gaps, this research adopts the transaction cost economics theory and rational choice theory as new theoretical lens to explain Vietnamese debit card holders’ willingness to use the card Correspondingly, this dissertation treats the use of debit cards for making payments for goods and services as a transaction between the card holders and their banks and aims to answer five primary questions including:

(1) Do transaction costs associated with debit card usage affect the cardholders’ willingness to select debit cards instead of cash for making payment?

(2) Given the fact that a transaction is characterized by three dimensions including asset specificity, uncertainty, and frequency of transaction, do the cardholders’ perceived transaction costs mediate the effects of these three dimensions on their willingness to use debit cards?

(3) Do benefits associated with debit card usage as a transaction affect debit cardholders’ willingness to use the card?

(4) Is there any moderator in the impacts of perceived transaction costs of debit card usage on the willingness to use the card?

(5) Is there any moderator in the impacts of perceived benefits of debit card usage on the willingness to use the card?

This chapter reviews the literature regarding the determinants of willingness/intention to use plastic cards in Vietnam and other countries to find out the research gaps that will be filled by this dissertation Specifically, there is a lack of literature about the determinants of willingness to use plastic cards Meanwhile, the literature review on the intention and behaviour to use plastic cards reveals that the use of plastic money was mostly treated as either a reasoned action/ a planned behaviour, the adoption of a technology, or a lifestyle The practical implications from the findings of previous studies do not have significant meaning in increasing usage rate of debit cards among cardholders who have already begun adoption of the card In fact, cash and card are two alternative choices whenever the cardholders want to make payment at the points of purchase If they choose to make payment with debit cards, they will associate with a transaction with their banks for money transferring service However, there is hardly research which treats debit cards as neither a rational choice nor a transaction to investigate determinants of cardholders’ willingness to make that choice and involve with such transaction The transaction cost economics theory and rational choice theory are,therefore, selected as the theoretical framework of this dissertation to fill such research gaps.

CHAPTER 2: THEORETICAL FRAMEWORK AND HYPOTHESIS

Digital payment systems

2.1.1 Overview about digital payment ecosystem

According to the Global partner for Financial inclusion (GPFI), the digital payment ecosystem is made up of entities providing digital payment services (i.e., banks, non-bank payment organizations, and mobile operators), payment systems (i.e., part of the financial infrastructure), distribution systems (i.e channels, agents and digital access points), an information technology system, an effective user identification system, and a payment environment (GPFI, 2017) The operating environment includes two primary frameworks. First, the legal framework that is formed by laws and regulations, in which the State Bank/ Central Bank plays the main role Second, the promoting framework underlying users’ awareness, financial knowledge, and consumer protection measures which is created and strengthened by a commitment from both the public and private sectors and serves to improve financial inclusion (GPFI, 2017).

The development of the digital payment ecosystem which is associated with the promotion of financial inclusion (also referred as the inclusive digital payment ecosystem) is supported by the improvement of the payment environment, especially the promoting framework (GPFI, 2017) In the views of the G20 and OECD, consumer protection in the field of finance and financial education, along with legal provisions, are key and mandatory factors to ensure the necessary framework for digital payment and users’ safety and giving them the right to make informed financial decisions (ITU, 2016).

Thus, basically, digital payment ecosystems also have characteristics of digital financial services ecosystem in general Components of the digital payment ecosystem and digital financial services ecosystem include: users (i.e customers, governments,businesses, and non-governmental organizations) are people and organizations that have demand for digital financial services and products; service providers (banks, licensed non- bank financial institutions, other financial institutions, and fin-tech companies); digital tools, financial, and technical infrastructures that allow service delivery; government policies, laws, and regulations which allow financial services to be provided in a reasonable, accessible, affordable and secure manner (ACI Universal payments, 2019).The digital payment ecosystem can be considered a sub-system of the digital financial services ecosystem In addition to the common characteristics, the digital payment ecosystem has some distinct characteristics regarding the participants and digital payment methods as discussed below.

There are many different payment methods in a digital payment system, and they can be divided into four groups as below (Nguyen and Luu, 2019):

Group 1: Card-based payment methods

Credit cards and debit cards are the most popular online payment method in the world, used by about 42% of people using online payment services This is because the credit card is connected to the credit account and the debit card is connected to a regular bank account Using either a credit or debit card to conduct online transactions usually requires the provision of a card number and user information on payment websites or applications Since typing characters every time making a payment by card can cause inconvenience for users, many payment companies offer cards with other handy features such as Straal's File or One-click payments and digital card-based wallets of MasterPass, Visa Checkout, ApplePay These card utilities allow users to provide information only once and store it in a confidential way for subsequent use.

Group 2: Payment method based on bank transfer (Bank-transfer-based methods)

Traditional bank transfer could be implemented within special banking system, local (iDeal), regional (SEPA) or global (SWIFT) Bank transfers are often expensive and slow, especially when making inter-regional transfers To facilitate the use of payment procedures and receive confirmation of transactions in real time, in some countries, payment service providers offer a payment-link-payment method (pay-by-links) In the payment link, payment service providers have accounts at popular banks operating in a certain geographical area The payer will transfer the money to the bank account of the payment service provider, after which the payment/transfer is made internally and immediately within the bank (within the bank's infrastructure) In fact, payment service providers can give the payee the transaction confirmation as soon as the transaction is made.

This payment method is required the payment parties to have an electronic wallet(not a card-based electronic wallet) within the same payment system, such as PayPal orRevolut The limitation of this payment method is that payment via electronic money transfer is usually more expensive than that on the card platform.

Cryptocurrencies are currencies created by complex cryptographic algorithms, based on open-source software and blockchain technology Everyone who owns the cryptocurrency wallet will have a unique key to prove his or her identity and a corresponding public key Advanced technology platforms and high security levels make cryptocurrencies considered an indispensable trend in the evolution of money and information technology Currently, there are many different types of cryptocurrencies in the world, but the most popular is Bitcoin (BTC) All the remaining coins have the same name as Altcoin Altcoins are created by different algorithms but are still based on Bitcoin's main platform Some popular digital currencies such as Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Monero (XMR), DASH, Ethereum Classic (ETC), IOTA (MIOTA), and NEM (XEM) The advent of cryptocurrencies has created a completely new, global, and independent monetary system with central banks Activities related to cryptocurrencies include using cryptocurrencies as a payment method, speculating cryptocurrencies, mining Bitcoin, and raising capital through the issuance of cryptocurrency (ICO).

Entities in the digital payment ecosystem

Key actors in the payment value chain include acquirers / processors, card networks, issuers, payment gateways, and ISOs / MSPs (Business Insider, 2018).

Table 2.1: Group of subjects in the digital payment system and some major companies / organizations involved (Business Insider, 2018)

Buyer/ Processor Adyen, Barclays, Chase paymentech,

Cielo, FirstData, TSYS, BBVA, Bank of America, Citi, Elavon, worldpay

Card network Discover, JCB, Mastercard, Pulse,

Star, VISA, Interlink, NYCE, RuPay,

Issuers Bank of America, Barclays, CHASE,

DISCOVER, ICBC, USAA, WEX, CapitalOne, Citi, USBank, Wirecard

Gateways Alipay, authorize.net, Braintree,

Paypal, PaySimple, SAGE Pay,Wepay, Adyen, Amazon, Blue Snap,

ISOs/MSPs Aliant, Creditcard, Paywire,

TouchSuite, Cayan, Fidelity, National Bankcard, Pivotal…

Payment gateway is defined as an online processor, capable of connecting the payment account of the buyer and the account of the seller to execute a transaction. The main task of payment gateways is to process and verify the authenticity of the purchase request Above all, this is only a payment intermediary service - not a store of value Every business enterprise that makes payment connections with payment gateways needs to have an account called a Merchant Account.

A special feature of the Merchant account is that it allows money transfers or refunds to buyers - in case the transaction is cancelled (for any reason) Payment gateway providers are responsible for allowing payment on payment websites or applications. Payment gateway functions as a tool to support card swiping (POS) when making payments online.

Processing unit (Acquirer, Acquiring Bank)

Processing unit is a financial institution which provides payment services, processes online transactions, and ensures safety for financial transactions The acquirer acts as a liaison with the issuing banks to obtain approval for an authorized transaction.

Issuing organization (Card / bank issuer)

Issuing organization is a financial institution which issues various types of payment cards to customers The payment card can be credit card, debit card or prepaid card.

Card network is a network of card issuers and purchasers, responsible for conducting, managing, and controlling everything related to card transactions under its brand In fact, it is a proxy or Internet server between the buyer and card issuer, that is responsible for relaying information and controlling for security The relationship in the card-based payment transactions between entities is shown in Figure 2.1.

Figure 2.1: Card-based payment transaction (Business Insider, 2018)

In order to offer a variety of products like today, the business of bank cards has gone through many stages of testing and development In fact, card business is a relatively new business with the advent and development from the early 20th century to the present. The history of card payment was generally documented in 1914, when an American company, Western Union, provided a customer-requested payment service Accordingly, the company issued a metal card with some information embossed on it to ensure two basic functions including (1) identifying customers and

(2) retaining embossed information on the metal plate (Cashco, 2016).

In acknowledgement of the convenience of Western Union cards, General Petroleum also released its first gasoline card in 1924, allowing customers to buy gasoline at its stores throughout the United States Thus, it can be said that the metal cards are the foundation for the introduction of the plastic cards nowadays The first plastic card was issued in 1950 by the company Dinners Club At that time, Frank McNamara, the founder of Dinners Club, was very confused when he attended a party at a restaurant but forgot to bring his wallet He had the idea of issuing plastic cards so that customers could pay later.

By 1958, the American Express company issued plastic cards, which focused on the fields of travel and entertainment Then, in the late 1960s, several US banks came together to issue their own bank cards, which is the basis for the formation of the two most popular cards in the world today, Visa and Master cards (Cashco, 2016).

There are many ways to express the concept of a plastic card:

- It is a means of payment for goods and services without using cash or can be used to withdraw cash at correspondent banks or ATMs.

- A type of financial transaction issued by banks, financial institutions, or companies.

- It is a non-cash payment method that cardholders can use to withdraw cash or pay for goods and services at the merchants.

- A method of recording the amounts payable through a card reader in combination with a computer network system connecting the card issuing center with payment points In this way, payment will become quick, convenient, and quite safe for participants.

Debit card usage and transaction cost economics theory

The literature review as shown in Chapter 1 reveals that the use of debit cards in particular, or plastic cards in general has been examined widely upon various theories and models such as theory of reasoned action, theory of planned behavior, the technology adoption model, and the unified theory of acceptance and use of technology. Correspondingly, previous studies mostly approached the use of plastic cards as a new adoption, a new behavior or a single option while neglecting their alternative choices. Different from the nonusers, those who have already adopted debit cards have two primary alternative choices of payment methods: (1) paying directly by cash or (2) using their banks’ money transferring services associated with their cards Whether they select card payment over direct cash payment, therefore, depends on their willingness to involve in such banking transaction In fact, a transaction may incur costs and the perceived magnitude of those transaction costs could influence choices and behavior (Dyer, 1997; Walker and Weber, 1984; Williamson, 1998) This evokes the idea of adopting the transaction cost economics theory, which is mostly considered to examine firms’ choice of transaction governance mode but adaptable to explain individuals’ behavior, to investigate factors affecting debit cardholders’ willingness to use the card as a new theoretical lens The following sections will discuss the propositions of transaction cost economics theory and its adaptation in explaining individuals’ behavior and choices in various contexts and especially in financial service marketing.

Marketing is the science of human exchanges which focuses on the study of exchange relationship management (Bagozzi, 1975) The exchange process fundamentally results in a transaction between at least two parties, the “seller” and the “buyer” For a transaction being executed successfully, each of transaction participants needs to offer the other something of value A successful transaction will then lead to a contract which indicates the agreement between the two parties regarding the objects to be transacted and relevant rights and responsibilities of each party (Lusch and Brown, 1996; Williamson, 1991) However, executing a market transaction is costly since a contract is mostly incomplete and difficult to manage due to several reasons (Williamson, 1991; Coase, 1992) First, the issue of asymmetric information requires the transaction participants to spend time, effort, and even money on searching for information (searching costs) to ensure that the transaction is beneficial to them Once they involve in a transaction, they are subject to the counter party’s opportunistic behavior In order to secure their contracts and make sure that the execution of the contracts is smooth and proper, the transaction participants need to take time and efforts to administer the counter party’s fulfillment of obligations and measure contractual performance This is known as monitoring costs (Klein, 1980; Poppo and Zenger, 2002; Walker and Weber, 1987).

Finally, the transaction participants are also uncertain about the disturbances that may occur during the transaction time Those disturbances may be unexpected and sometimes not included in a contract in advance Once they occur, since the two parties are tied to the contract, the transaction participants need to take time and efforts to adapt to continue and secure the contract This is regarded as adaptation costs (Klein, 1980; Poppo and Zenger, 2002; Walker and Weber, 1987) The three types of costs including search costs, monitoring costs and adaptation costs associated with a transaction constitute transaction costs that are deemed to be incurred in any transaction (Williamson, 1998).

The transaction and its associated costs are the core concepts of the transaction cost economics theory Under this theory, firms always face two basic choices of transaction governance modes whenever they want to source a necessary good or service First, it could involve in a transaction with a supplier in the marketplace to make purchase of the good or service they need This transaction governance mode is known as

“market or” “buy” governance Second, they could also involve in an internal transaction with their employees which is governed by the firms themselves to have the necessary good or service produced in-house This is called “hierarchical” or “make” governance (Walker and Weber, 1984; Williamson, 1998).

The propositions of this theory are developed based on two fundamental assumptions. First, transaction participants are only boundedly rational due to their limited capacities in storing and processing information in their minds Given information received, they could not digest the information properly to comprehensively understand and properly draw the underlying implications and future consequences (Simon, 1972) As a result, although they try to rationally gear their decisions towards economic utility maximization purposes, their actual behavior is not always truly rational as intended Second, transaction participants are subject to the counter party’s opportunistic behavior More specifically, all economic agents are deemed to be self-interest and they may take advantage of unexpected circumstances for their own utility maximization while ignoring the potential expenses to the counter party (Williamson, 1991).

Based on the above assumptions, the transaction cost economics theory proposes that transaction participants always try to maximize their economic utility by pursuing cost minimization Consequently, given two choices of transaction governance modes, firms always behave in the way that minimize transaction costs Correspondingly, they will select to internalize the transaction and favor the “make” governance mode of the market transaction if the “buy” governance mode involves with higher transaction costs and vice versa The structure and magnitude of transaction costs associated with each transaction governance mode mostly depend on the three fundamental dimensions of a transaction, including asset specificity, uncertainty, and transaction frequency (Geyskens et al., 2006; Walker and Weber, 1984; Williamson, 1998).

Asset specificity indicates the extent to which the assets that are invested in a specific transaction are only tied to it while could not be used for alternative purposes (Shelanski and Klein, 1995; Williamson, 1998) The literature reveals a number of forms that asset specificity may take such as human asset specificity, site specificity, physical asset specificity, and dedicated assets Due to the fear of opportunistic behavior taken by the counter party, as the asset specificity deepens, transaction participants in a market governance transaction will take greater time and efforts to secure the contract with more complex contractual terms and governance structures (higher monitoring costs) (Heide 1994; Williamson, 1991, Williamson, 1998) In addition, when asset-specific investments increase, disturbances that may arise during the transaction time become more consequential As the market governance mode requires coordinated responses, the adaptation costs associated with the “buy” governance mode is higher compared to that of a hierarchical governance transaction where internal cooperation is facilitated more efficiently (Williamson, 1991; Rindfleisch and Heide,

1997) Therefore, the “make” governance choice may be favored in this case.

Since transaction participants face the issues of information asymmetries and the probability of the counter party’s opportunistic behavior while they are only boundedly rational, they always enter into a transaction with uncertainty (Walker and Weber, 1987; Williamson, 1991) Specifically, the transaction participants find it difficult to anticipate whether the counter party would fulfil their obligations properly and what possible circumstances may occur during the transaction period, especially when they are involved with long-term contracts (Poppo and Zenger, 2002; Williamson, 1998) The transaction cost economics theory distinguishes two types of uncertainty, including environmental uncertainty and behavioral uncertainty The former occurs when the disturbances associated with a transaction are so unpredictable that the transaction participants could not fully specify it On the other hand, the latter implies the difficulties in predicting the counter party’s performance (Geyskens et al., 2006) While the environmental uncertainty causes adaptation problems, therefore, incurs adaptation costs (to secure a contract), behavioral uncertainty leads to both adaptation and administration problems which raise both monitoring costs (to make sure that contractual rights and obligations are fulfilled properly) and adaptation costs (Walker and Weber, 1984; Williamson, 1998) According to transaction cost economics theory, as uncertainty increases, the “make” governance mode is favoured since it allows more flexibility in cooperation that helps reduce adaptation costs while minimize the risk of opportunism.

Buying frequency reflects how frequent a transaction for a specific good or service recurs As the buying frequency increases, the “make” governance mode is favored since this helps reduce the overhead costs for recurring transactions (Geyskens et al., 2006;Heide, 1994; Williamson, 1991) Conversely, market governance choice is favored if the necessary good or service is rarely used since it is wasteful to invest in in-house provisions for internal production in such case.

Although the transaction cost perspective was originally developed to explain the make-or-buy decision confronted by firms (Geyskens et al., 2006; Hardt, 2009; Rindfleisch and Heide, 1997; Shelanski and Klein, 1995), and hence, the existence of firms (Coase, 1992; Williamson, 1991), the theory has been expanded in several ways. First, the literature documented the adaption of the transaction cost approach in explaining various contract governance modes which did not perfectly demonstrate the make-or-buy problem (Kang, 2003) The fundamental theoretical underpinning of those research was simply that the choice of transaction governance modes depends on the magnitude of transaction costs incurred accordingly Second, despite the fact that the transaction cost economics theory was originally emerged to explain firm-related decisions and behaviors, it has been also adapted to examine individual customers’ behavior in various contexts. Since this dissertation aims to applying the transaction cost approach in explaining Vietnamese individual debit cardholders’ choice behavior, the next section will further discuss on how this theory has been expanded in individual behavior studies.

2.2.2 Debit card holders and transaction cost economics perspective

The original transaction cost economics theory was developed in the organizational context Therefore, this theory has been frequently used to examine firms’ choice and behaviour such as firms’ decision to conduct forward or backward vertical integration (John and Weitz, 1988; Russo, 1992), how firms collaborate in the relationship between the supplier and the buyer (Sriram et al., 1992), as well as firms’ investment in relationship marketing (Rokkan et al., 2003) Nevertheless, many scholars argue that the transaction cost approach could also be adapted to explain individuals’ choice and behavior associated with supplier-individual consumer transactions due to several reasons (Cannon et al., 2014; Cannon and Schwaiger’s, 2005; Bergen et al., 1992) First, the transaction cost perspective treats a firm as an economic agent which pursues profit maximization by maintaining cost effectiveness in production and minimizing transaction costs Similarly, individual consumers are rational in a way that given their scare resources, they strive to optimize their spending in terms of time, effort, and money to attain the maximum satisfaction (Cannon et al., 2014; Grứnhaug and Gilly, 1991; Zaltman and Wallendorf,

1983) Second, the transaction cost economics theory addresses the make-or-buy problem or the fundamental question regarding whether a firm should produce a necessary good or service in-house or purchase it from the outside market Likewise, individuals frequently face the daily question that “Should I do it myself or should I hire someone to do it for me?” Correspondingly, they need to make decisions between two alternative choices (1) taking their own efforts to handle the issue or (2) seeking for a suitable product or service in the outside market that could resolve their problem For instance, an individual may consider, “Should I grow flowers at home by myself or purchase flowers from a florist shop?” or, “Should I do all the housework by myself or have a full-service housekeeping company take care for me?” These individual questions are parallel to the firms’ make-or-buy problem as featured in the transaction cost economics theory (Grứnhaug and Gilly, 1991) Among various factors, the individuals’ choice may be made upon the cost comparison between alternatives More specifically, the individual may consider how much the time, effort, and money they need to spend to handle the task on their own and compare to that of seeking and selecting a suitable seller or service provider, checking the product quality or service performance, and resolving problems if the product or service fails or any other unexpected issues that may arise during the transaction.

The literature reveals a number of empirical studies that employ the transaction cost perspective in explaining individuals’ behavior and choice There are two prominent contexts that the transaction cost economics theory was found applicable First, in the e- commerce context where customers face two alternative choices of shopping experience, including (1) traditional purchase from brick-and-mortar retailers and thereby, executing the whole buying process on their own; and (2) online purchase from an e-tailer and thereby, accessing to online shopping services provided by the e-tailer Correspondingly, Liang and Huang (1998) explain customer acceptance of electronic purchasing method based on the analysis of transaction costs associated Those transaction costs are defined by asset specificity and uncertainty involved with online purchases Similarly, Steinfield and Whitten (1999) highlight the competitive advantages of e-commerce against traditional retailers based on how online purchases could economize transaction costs for individual shoppers Upon the theoretical underpinnings of transaction cost perspective,Teo and Yu (2004) conducted an empirical survey on online buyers in Singapore and validated a model of online buying behavior linking customers’ willingness to purchase online with their perceived transaction costs associated with online shopping Notably,perceived transaction costs were found to not only negatively influence the choice of online purchase but also mediate the impacts of uncertainty and buying frequency on the willingness to shop online Likewise, Yeh and Yang (2012) adapted the transaction cost approach to explain the relationship between uncertainty and individual customers’ intention to make purchase from online auction websites through transaction costs involved.

Second, the transaction cost approach has also been adopted in the context of financial service marketing in which the concept “transaction cost” was defined differently Klee (2004) affirmed that transaction cost is the primary determinant that influences individual bank customers’ selection between plastic cards and cheques for making payment However, the author regarded transaction cost as merely the time that a bank customer needs to spend on executing a financial transaction with the employment of each means of payment Consequently, this research concluded that debit cards are selected more frequently than cheques since payment transaction via debit card is evaluated as being executed faster than cheque payment transactions Although time involved in processing transaction do not reflect fully transaction costs as featured in the transaction cost economics theory, Klee (2004) contributes to the literature regarding customers’ choice over different means of payment by affirming the cost minimization tendency among individual bank customers when they face alternative choices of money transaction governance The transaction cost economics theory was adapted more clearly in the context of microfinance business Cuevas (1988) was the pioneer author who conceptualized costs of microfinance transactions as the “cost of intermediation” or the non-interest expenses which incurs in the borrower-lender transaction This also reflects the overall efficiency of different microfinance business models’ performance (Singh and Kapoor, 2018) Correspondingly, previous studies explained individual customers’ acceptance of various microfinance models through their perceptions about different transaction costs associated with those models such as travel costs and opportunity time costs (Karduck and Seibel, 2005; Singh and Kapoor, 2018; Tutlani, 2016) The theoretical underpinning of these research is drawn from the expansion of the transaction cost economics theory as proposed by Kang (2003) that the choice of various contract governance modes is made upon the comparison of perceived transaction costs incurred in different contracts In the same vein, Ramasamy and Yeung (2003) revealed that perceived transaction costs constitute a crucial factor influencing how financial advisors make choice among various mutual funds in emerging countries On the other hand, Bauer et al (2005) and Dauda and Lee (2016) regarded perceived costs associated with banking transactions such as fees, time, risk and stress as a crucial measurement of banking service quality (both online-banking service and general banking service) This factor, therefore, significantly influences customer choices of banks and customer satisfaction (Dauda and Lee, 2016).

Debit card usage and rational choice theory

In addition to the transaction cost perspective, this research employs the rational choice theory as a way to either expand or complement the limitations of the transaction cost economics theory Specifically, despite the fact that the transaction cost economics perspective is widely acknowledged by both academic scholars and practitioners as a crucial theoretical viewpoint for analyzing choice behavior, it has its own limitations As criticized by Dyer (1997) and Gibbon (2010), this theory exclusively focuses on minimizing transaction costs as a sole way to achieve efficiency, while the choice of governance may also influence transaction value In other words, the focus of the transaction cost economics theory is merely on transactions costs, but transactions also imply benefits (Boudreau et al., 2007) In fact, the inclusion of transaction benefit as another determinant of the make-or-buy decision was once mention in a research by Grossman and Hart (1986) who try to expand the propositions of the transaction cost perspectives In the same vein, transaction benefits are believed to exist and conceptualized as the benefits obtained from making an economic exchange (Watson et al.

2005) The author also adds that the transaction benefits obtained from various modes of governance may differ.

Transaction benefits are beyond financial return and may exist at both an individual level and/or an organizational level (Boudreau et al., 2007) In fact, given the card-or- cash decision, plastic card usage may offer distinct benefits to cardholders that cash usage does not (Jawaid et al., 2018) Despite the co-existence of transaction costs and benefits, there is hardly theory which directly considers their impacts on the governance choice. This dissertation, therefore, aims to expand the application of the transaction cost economics theory by taking a more comprehensive cost-benefit perspective grounded by the rational choice theory This section will further discuss about the rational choice theory and its relevance in examining the willingness to use debit cards.

According to Allingham (2002), rational economic and social behavior are usually assessed and analyzed under the theory of rational choice Such theory has been the root for many theoretical frameworks providing guideline for the forecast of choices’ sequence and result Importantly, there are three factors making up rational choices of individuals including constraints, beliefs, and preferences (Acheson, 2002) The first series of constraints suggests that all “restricted-resources” including time, money, individuals’ efforts, and capabilities will play a crucial role in evaluating the practicability of actions.

On the other hand, beliefs stand for individuals’ understandings of how likely their behaviors and actions can produce potential results Lastly, preferences indicate how(positively or negatively) individuals judge the possible results as mentioned above.According to McGee and Warms (2013), the rational choice theory suggests that the rational individuals will assess all potential expenses and gains of their action based on various accessible information including their own “resource-constraints”, the prediction of all possible results, and their preferences toward such results Consequently, the individuals’ action will be totally driven and directed in accordance with their preference of the best option possible The rational choice theory, as depicted in the belief widely approved, is an economical and lawful approach which ensures the maximum achievement of people through whatever they have at hand Put simply, Coleman (1990) suggests that it is the nature of individuals to get the most out of their limited or rationalized expense In addition, this theory also implies that people’s preferences, which are egocentric, will guide their actions for the accomplishment of maximum individual “profits” by the weighing and adjustment of benefits and costs. Besides, as argued by Acheson (2002), in the beginning, the rational choice theory allowed individuals to gain access to (hence, to analyse) unlimited data regarding possible choices of action, their potential results, and their expenses and gains Therefore, it is to say that the evaluation of cost-benefit will rule over the decision-making process in selecting the most profitable option under the effects of confined inputs and numerous possibilities. Later, such understanding was under many criticisms from researchers such as McGee and Warms (2013) and Lindenberg (2001) This leads to the introduction of new school of thought which suggested that such data is not abundant (“bounded rationality” rather than

“full rationality”) It is important to note that the new thinking claims that the restraint of information-processing capacity and people’s targeted attention is the cause of their conscious information shortage Consequently, the choice of action people taken in most case is generally considered to be acceptably good (not the best) which provides them with decent level of satisfaction.

2.3.2 Debit cardholders and the rational choice perspective

The rational choice theory has been widely used in the area of social sciences since it tends to assess the behavioral part of human (Browning et al., 2000) such as voting behaviors (Brogan, 2001; Edlin et al., 2007), politicians’ behaviors and decisions(Petracca, 1991), social changes (Opp, 2007) and consumers’ purchasing behavior (Dean and Croft, 2009; Dodds et al., 2015; Lee and Cunningham, 2001) In the context of consumer marketing, the rational choice theory supposes that similar to a voter who making their electoral decision, consumers undertake cost-benefit analysis to make their buying decisions in line with their own preference (Dean and Croft, 2009) The rational choice theory acts as the fundamental theoretical underpinning for the formation of a behavioral model which complement the limitations of psychological or attitudinal models such as the theory of reasoned action or theory of planned behavior in explaining individuals’ behavior More specifically, the psychological models only examine the attitude-behavior relationship based on favorably evaluated beliefs about the benefits obtained from favorable attributes of the product or service while ignoring the unfavorable costs of the buying behavior (Verhallen and van Raaij, 1986) Rooted from the theory of reasoned action, the theory of technology adoption model has the same limitations since it only proposes perceived usefulness and perceived ease of use as two primary determinants of intention to use and actual use of a technology while neglecting the possible (negative) behavioral costs of the use behavior In previous studies which examines the intention to use plastic cards as either a reasoned action, a planned behavior or a technology adoption, this limitation is partially compensated by the inclusion of perceived financial costs (Ali et al., 2017; Amin, 2013; Le, 2015; Oanh and Cassidy, 2018;

To, 2016) or price value (Kissi et al., 2017; Makanyeza and Mutambayashata, 2018; Venkatesh et al., 2003) as an expansion of those theories In these researches, although the rational choice theory was not claimed as the theoretical underpinnings but the cost-benefit perspective under this theory has been indirectly adopted to explain the use of plastic cards.

In the background is this study, the cardholders need to decide on whether to use their debit cards with money transferring services offered by banks or cash as a main payment method Such decision will be made according to their balancing of potential expenses incurred and benefits gained In addition, those individuals (who already owned one or several cards) are deemed to be knowledgeable with sufficient information to judge all aspects of debit cards payment including the costs and benefits it generates and all possible results from such action According to these judgments, the card owners will come up with their own preferred payment methods which seem to have bigger advantages Likewise, the tendency to use debit cards in payment can be assessed and analyzed thoughtfully through the application of rational choice theory.

For debit cardholders who have already adopted the card, the use of debit cards for payment reflects a choice to involve with banking transactions for money transferring services over cash rather than an adoption of a technology or merely an independent action or behavior Correspondingly, the cost associated with the use of debit cards is more than financial costs and the benefits gained from the choice of debit cards is beyond the usefulness of the cards as featured in the previous studies which either adopt or expand the theory of reasoned action, theory of planned behavior, theory of acceptance model and the unified theory of acceptance and use of technology The combination of the transaction cost economics theory and the rational choice theory,therefore, could compensate limitations of both transaction cost economics theory which focused exclusively on transaction costs and other previous theories and models which have been employed to examine the intention to use plastic cards but not yet covered fully costs and benefits associated with the use of debit cards as a transaction.

Research model and hypotheses

This dissertation treats debit card use as a transaction and therefore, examines the direct relationships between the three primary dimensions of a typical transaction including asset specificity, uncertainty, and buying frequency on the willingness to use the cards as well as the mediating roles of perceived transaction costs in such relationships In expanding the transaction cost economics theory, the rational choice theory is applied to provide a comprehensive theoretical perspective in examining not only the costs but also the benefits associated with debit card transactions.

In order to adapt the general propositions of transaction cost economics theory into the special context of debit card usage, in-depth interviews on 32 Vietnamese debit cardholders are conducted first The findings of this qualitative study are merged and conceptualized with the transaction cost economics theory, the rational choice theory, and relevant bank marketing literature to serve the development of research hypotheses and detailed measurement properties.

The following section will provide clearer arguments for this adaptation and propose relevant research hypotheses upon the transaction cost economics theory, the rational choice theory, and findings from the qualitative study.

2.4.1 Perceived transaction costs and willingness to use debit cards

This dissertation primarily examines the use of debit cards among debit cardholders who have already adopted the card Since searching costs are mostly emerged in the pre- transaction phase, only the two remaining dimensions of transaction costs, including monitoring costs and adaptation costs, will be focused in this study In order to explore detailed costs associated with debit card transactions from the in-depth interviews,participants were asked “Do you feel inconvenience or encounter any troubles during your usage of debit cards? Please specify your own experience” The interviewer then questioned the respondents that “Do you use cash or debit cards for making payment?” For those who used either both cash and debit cards or only debit cards for making payments about their willingness to use debit cards for all payment transactions, they were further asked “Are you willing to use debit cards for 100% of transactions instead of cash, and why?” The respondents revealed detailed reasons for their unwillingness in adopting card payment that they need to spend time and effort on checking whether the debit card transactions are secure and accurate (monitoring costs) Moreover, they are also hesitated to resolve unexpected issues that may occur during the use of debit cards, for example, the card could be lost, unavailable (they forget to bring the card with them), not accepted, or unusable at points of purchase If such cases happen, they need to take time and effort to either adapt or resolve (adaptation costs). Meanwhile, the above issues do not arise if they use cash Overall, those perceived costs make the cardholders hesitant to use debit cards and tend to stock more cash in hand for making payments These findings are in line with the transaction cost economics theory that transaction governance modes that incur less perceived transaction costs will be more favored (Geyskens et al., 2006) This study, therefore, hypothesizes that:

H1: Perceived monitoring costs have a negative impact on willingness to use debit cards.

H2: Perceived adaptation costs have a negative impact on willingness to use debit cards.

2.4.2 Asset specificity, perceived transaction costs, and willingness to use debit cards

An asset is regarded as “specific” if it only demonstrates high value when it is applied in certain cases while for alternative applications, its value is no longer significant.According to the transaction cost economics theory, the increase in asset specificity will make the choice of hierarchical governance more favorable compared to the market governance More specifically, as a crucial attribute of a transaction, higher asset specificity implies a greater risk to a party in the market transaction since that transaction participant has made investments that are specific to its certain counter party As a result,the transaction participant becomes vulnerable to opportunistic behavior of its counter party, that is also known as the “hold-up problem” (Milgrom and Roberts, 1992) To avoid the hold-up problem and thereby, safeguard its investments in specific assets, the transaction participant needs to bear more monitoring costs for administering the counter-party’s performance and more adaptation costs for resolving disturbance that may occur during the transaction time Alternatively, the transaction participant would internalize these transactions costs to avoid investments on specific assets and the hold-up problem (McAuliffe, 2015) In fact, the impact of asset specificity on the choice of transaction governance mode was affirmed and explained through transaction costs in previous studies (Coggan et al., 2015; Huo et al., 2018; Pawlicz, 2011).

In the in-depth interview, participants were asked, “Are you willing to use debit cards for 100% of transactions instead of cash, and why?” Most of them said “No” Their reason was that they are hesitant to deposit a significant amount of money into a bank with minimal or even no interest rate while becoming dependent on the bank whenever they need to access to their own money In fact, dependence also represents a transaction- specific asset because high level of dependence makes it costly and even impossible to replace an exchange partner (Anderson, 1985; Heide and John; 1990; Williamson, 1991).

In the context of debit card use, once the cardholder deposits some money into their associated bank account, they rely on the issuing banks in processing money transferring transactions and need to comply with specific constructions regulated by their banks to make use of their own money Alternatively, the cardholder could switch from the “market governance” (using debit card services) to “hierarchical governance” (using cash) by withdrawing cash from their debit accounts, however, at a specific amount of fees If the debit card holders adopt card payment, given their dependence on the issuing banks for money transferring transactions, they need to take time and effort to administer banking transactions to make sure that those transactions are correctly executed (monitoring cost), and either adapt or deal with unexpected events arising when using debit cards (adaptation cost) The issue of dependence (asset specificity) which incurs costs associated with debit card transaction does not arise if the cardholders use cash for making payment As the cardholders feel more dependent on banks, the perceived transaction costs of using debit cards could also increase Consequently, the cardholders may be less willing to use the card In line with the findings from the qualitative study, which are also consistent with the propositions of transaction cost economics theory, this dissertation proposes the following hypotheses:

H3a: Asset specificity associated with debit card usage has a positive impact on perceived monitoring costs.

H3b: Asset specificity associated with debit card usage has a positive impact on perceived adaptation costs.

H4a: Perceived monitoring costs mediate the relationship between asset specificity and willingness to use debit cards.

H4b: Perceived adaptation costs mediate the relationship between asset specificity and willingness to use debit cards.

2.4.3 Uncertainty, perceived transaction costs, and willingness to use debit cards

Uncertainty is a core concept in the transaction cost economics theory This construct forms the basis of the explanation of transaction costs by providing a linkage in the theoretical justification of the shift from market coordination to internalization Given human constraints in information processing and communication ability (Simon, 1957) while the market is characterized by uncertain environments and potential opportunism behaviors, the decision maker faces not only environmental uncertainty (i.e., the disturbances surrounding an exchange cannot be specified ex ante) but also behaviour uncertainty (i.e., the counter-party’s performance cannot be administered ex post) (Rindfleisch and Heide, 1997) The environmental uncertainty results in adaptation problems and incurs adaptation costs More, the decision maker faces difficulties in modifying existing agreements and therefore, needs to bear costs for adapting to changing circumstances in order to maintain the contract On the other hand, the behavioral uncertainty leads to performance evaluation problems in which the transaction participant finds it difficult to verify whether the counter party complies with the agreements established between parties (Slater and Spencer, 2000) Consequently, the monitoring costs including costs for gathering and processing information about the counter-party’s performance and behavior may be substantial According to the transaction cost economics perspective, if those adaptation and monitoring costs are either absent or low, market governance is favored In contrast, internalizing the transaction is favored if these costs are high enough to blur the production cost advantages of the market governance (Kemp,

2006) The underlying reason is that since the “make” governance features in-house transaction, which is governed completely by the economic agent, it could minimize transaction costs The mechanism underlying the relationship between uncertainty and the choice of transaction governance mode that is mediated via the effect of transaction costs is the fundamental proposition of the transaction cost economics perspective This has been also revisited and affirmed in both organizational context (Grover and Malhotra, 2003; Hu and Chen, 1993; Huo et al., 2018) and individual behavior studies (Teo and Yu, 2005).

In the in-depth interview, when being asked “Are you willing to use debit card for 100% of transactions instead of cash, and why?”, beside the issue of dependence as discussed in the previous section, another reason that made some respondents hesitant to use debit cards for all payment transactions was their various uncertainty surrounding the debit card transactions First, they are unsure about whether their money in their debit card account is perfectly secured and whether the issuing banks could provide safe and consistent money transferring service quality as they are supposed (behavioral uncertainty).

As a result, they need to take time and effort on checking the accuracy of each money transferring transactions (monitoring cost) Second, respondents also shared their worry about whether the issuing banks are always available and offer prompt response to support them whenever they face any disturbances involved with debit card transaction Any delay or uncooperative behavior from the banks could raise time and effort that the cardholders need to deal with such unexpected issues (adaptation cost) Third, the participants also reported their uncertainty about whether debit cards are widely accepted at points of purchase (environmental uncertainty) In case that debit cards are not accepted for making payment when they need it, this could raise the time and effort for fulfilling the payment (adaptation cost) Moreover, this issue further creates a tendency to withdraw and hold cash as a contingency plan Given the available cash in hand, the respondents admitted that they become less willing to use debit cards These findings are consistent with the propositions of the transaction cost economics theory that behavioral uncertainty causes both adaptation and performance evaluation problems and therefore, raises both adaptation and monitoring costs while environmental uncertainty causes adaptation problems that raise adaptation costs Those uncertainty and costs could be mitigated by using cash In line with the above discussion and the underlying transaction cost economics theory, it is hypothesized that:

H5a: Behavioral uncertainty associated with debit card usage has a positive impact on perceived monitoring costs.

H5b: Behavioral uncertainty associated with debit card usage has a positive impact on perceived adaptation costs.

H6a: Perceived monitoring costs mediate the relationship between behavioral uncertainty and willingness to use debit cards.

H6b: Perceived adaptation costs mediate the relationship between behavioral uncertainty and willingness to use debit cards.

H7: Environmental uncertainty associated with debit card usage has a positive impact on perceived adaptation costs.

H8: Perceived adaptation costs mediate the relationship between environmental uncertainty and willingness to use debit cards.

2.4.4 Frequency, perceived transaction costs, and willingness to use debit cards

Transaction frequency is mentioned in the transaction cost economics theory as a third transactional dimension (Williamson, 1985) but this construct has received limited attention in the literature Theoretically, the cost of hierarchical governance structure could be easier to recover for “large transactions of a recurring kind” (Williamson, 1991) The overhead transaction costs of those recurring transactions could be only reduced in case of hierarchical governance since the firms take control over the whole transaction process while may increase in case of market governance (Geyskens et al., 2006; Williamson,

1991) Therefore, higher transaction frequency creates an incentive for firms to internalize their transaction as a way to take advantage of lower overhead costs.

In the context of debit card usage, when being asked “Are you willing to use debit card for 100% of transactions instead of cash, and why?”, respondents, especially women who need to make payment more frequently show more hesitance to use debit cards instead of cash for all payment transactions since their monitoring costs and adaptation costs associated with debit card transaction as discussed above will further intensify the inconvenience of debit card use Instead, using cash for frequent payments will give them more confidence and help save time This finding is in line with the transaction cost economics theory that transaction frequency will reduce the attractiveness of the market governance This dissertation, therefore, hypothesizes that:

H9a: Frequency of payment has a positive impact on perceived monitoring costs. H9b: Frequency of payment has a positive impact on perceived adaptation costs.

H10a: Perceived monitoring costs mediate the relationship between frequency of payment and willingness to use debit cards.

H10b: Perceived adaptation costs mediate the relationship between frequency of payment and willingness to use debit cards.

2.4.5 Perceived benefits and willingness to use debit cards

According to Soane et al (2010), the choice-making process is affected by people’s preferences which are descended from their concept of potential positive results and profits attained from a series of actions The payment-making action with debit cards from cardholders, in this study, will provide them with many advantages First, as argued by Ozturk (2016) and Padaruth et al, (2013), the use of modern, innovative, and technologically advanced cards can improve the payment process in term of time management and productivity In fact, the positive impacts of the usefulness of debit cards on the intention to use the card was suggested in either the theory of technology adoption model or the unified theory of acceptance and use of technology as well as experimentally proved in previous research (Kissi et al., 2017; Makanyeza and Mutambayashata, 2018; Oanh and Cassidy, 2018).

In the in-depth interview, many of respondents, when answering the question of “Are you willing to switch to use cash for all payment transactions? and why?”, do not totally agree despite of their given knowledge about difficulties of maintaining and using debit cards Those participants argued that the benefits of debit card usage including long- distanced money transaction, time saving, and payment efficiency even outweigh its disadvantages Such advantages provided by debit card’s special usefulness drive the motivation for card usage Beyond the usefulness of debit cards, Vietnam commercial banks have offered many deals, add-in benefits, and loyalty programs to promote the use of debit card amongst Vietnamese users Such promotional activities are proved to be successful in driving the payment by card as revealed from the in-depth interview’s outcome.

In line with the above discussion, the following hypothesis is proposed:

H11: Perceived benefits of using debit cards has a positive impact on willingness to use debit cards.

2.4.6 The moderating effects of habit of using cash, location (urban/rural) and education level

RESEARCH METHODS

The research context

3.1.1 Background of commercial banks in Vietnam

The State Bank of Vietnam was officially established under Decree No 15/SL dated May 06, 1951 by President Ho Chi Minh In 1976, there was a unification of the National Bank of Vietnam (South of Vietnam) into the State Bank system Under the Decree No. 163/CP dated June 16, 1977, 5 state-owned banks were formed within the structure of the State Bank On May 3, 1978, new currencies of the Socialist Republic of Vietnam were issued, and old currencies were recovered in both the South and the North Over the past six decades, the Vietnamese banking sector has continuously expanded and made important contributions to the national social-economic development with a system of strong financial institutions in terms of size and diversity of ownership In the segment of commercial banks, there are currently 05 state-owned commercial banks, 31 joint stock commercial banks, 27 wholly owned foreign bank branches and 4 joint venture banks (State Bank of Vietnam, 2020).

In overall, financial services have "covered" to 100% of districts and towns across the country in which commercial banks play a central role in the whole banking system. The basic service activities of commercial banks in Vietnam can be categorized into 3 main groups including capital mobilization, capital utilization and intermediary activities (Nguyen, 2015).

Firstly, regarding capital mobilization activities, capital mobilized by banks could take various forms such as deposits, loans, and valuable papers.

Secondly, capital-using activities include those which directly generate profits for the bank The efficiency of capital utilization will increase the bank's competitiveness and reputation in the market The main activities in this group include credit activities, investment activities and other treasury activities In which, credit activity is currently the most important business unit of Vietnamese commercial banks because this activity provides the major source of income for banks.

Third, intermediary activities represent specialized banking services which provide significant supports for capital exploitation, expansion of investment services, and income for the bank from commissions and fees More specifically, activities in this group include intermediary payment, guarantee, trading in foreign currencies, financial advisory,preservation service for precious artifacts and valuable papers, and other services as allowed by law Nowadays, those activities hold a crucial position in the development of commercial banks.

The above-mentioned fundamental services will ensure commercial banks exist and thrive in the increasingly fierce competition environment In fact, those service activities are closely related with each other Capital mobilization activities affect the decision to use capital, whereas the demand for capital use affects the size and structure of mobilized capital Intermediation activities generate additional income for the bank, but the main purpose is to attract customers, thereby creating conditions for efficient mobilization and use of capital.

At commercial banks, customers participate in the process of providing capital for the bank and receiving loans from the bank The relationship between commercial banks and their customers is two-way, creating conditions for each other to coexist and develop. The quality of products and services of the bank will create favorable conditions for the success of customers’ production and business activities and vice versa, the success or failure of customers' production and business will affect the existence and development of banks Customers of Vietnamese commercial banks fall into two categories: individual customers and corporate customers Regarding benefits sought, those customers can be further classified into the following four main segments (Nguyen, 2002):

First, the customer group of capital raising operation: This group of customers plays a role in providing capital to commercial banks in the forms of savings deposits, payment deposits, and term deposits.

Second, the customer group of credit and investment operations: This group of customers plays the role of using capital of the bank to serve their production and business activities.

Third, the customer group of the payment service: This group of customers include both individuals who need to use payment services of the bank such as card services, money transfer services, payment services, etc and corporate customers who demand for domestic payment services, import payments, export payments, etc.

Fourth, the customer group of other banking services: This customer group uses other banking products and services such as ATM service, Internet Banking, Mobile Banking, buying, and selling foreign currencies, operations related to the stock market, etc.

As other business organizations, the nature of commercial banks’ activities is to gain profit from capital mobilization, credit, and investment activities, and from providing other banking products and services related to money Therefore, customers play an important role in the activities of commercial banks Without customer demand, no banking business would take place for profit-seeking purposes Building, developing, and maintaining sustainable relationships with customers are fundamental strategic goals of all Vietnamese commercial banks today.

3.1.2 History of debit cards in Vietnam

In 1990, the contract of acting as a payment agent for Visa cards between a French bank, Banque francaise du Commerce Exterieur (BFCE) and Vietnam Commercial Bank (Vietcombank) marked the penetration of debit cards into Vietnam This cooperation was mainly to serve the increasing number of international tourists coming to this country. After Vietcombank, Saigon Commercial Bank (Sacombank) also cooperated with Visa card payment centre to act as another payment agent Further, Vietnam’s open-door policy has made the country a promising destination for foreign trade and investment When the number of foreign investment projects increases and the major financial institutions have entered Vietnam, the emergence and popularity of cards are indispensable (Pham, 2008).

In 1995, Vietcombank Ho Chi Minh City, Asian Commercial Joint Stock Bank (ACB), and the joint venture between First-Vina-Bank and Export-Import Commercial Joint Stock Bank (Eximbank) were allowed by the Governor of the State Bank of Vietnam to join the Mastercard international card network.

Since 1996, Vietcombank has officially been a member of Visa International, followed by ACB and Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) in which the Vietcombank and ACB conducted payment transactions directly with this organization Also, in this year, Vietcombank released its first pilot bank card, and the Vietnam Association of Card Payment Banks was also established with four founding members, including Vietcombank, ACB, Eximbank, and First Vinabank The legal corridor for card activities at that time included only Decision No 74 signed by the Governor of the State Bank of Vietnam on April 10, 1993, stipulating the provisional rules on the issuance and use of payment cards (State Bank of Vietnam, 1993) The adoption of cards in Vietnam at that time was still limited due to underdeveloped legal system, poor economic conditions, and technical infrastructure Based on the agreement of the State Bank,commercial banks, as the card issuers, are allowed to develop its own regulations on card issuance and usage contract (Pham, 2008).

Since Vietnam joined WTO in 2007, the financial market of Vietnam has become increasingly competitive due to the emergence of more foreign banks Offering debit card services has become an effective weapon for banks to penetrate the market A series of card products were launched, triggering a "war" for card issuance among domestic banks. Currently, most commercial banks in Vietnam offers card services.

3.1.3 National policies on debit card usage and management

In acknowledgement of rising demand and supply of card services, the legal framework for card activities continues to be completed Specifically, the Governor of the State Bank of Vietnam issued Decision No 20/2007/QD-NHNN dated May 15, 2007 about regulation on card issuance, payment, use and provision of operational support services for bank card activities (State Bank of Vietnam, 2007a), Decision No. 32/2007/QD-NHNN dated July 9, 2007 regarding the balance limit for anonymous prepaid cards (State Bank of Vietnam, 2007b), and Decision No 38/2007/QD-NHNN dated October 30, 2007 about regulation on issuance, use and management of bank card issuer codes (State Bank of Vietnam, 2007c) Next, on December 28, 2012, the State Bank of Vietnam issued a circular regulating the domestic debit card service fee (Circular 35), which prescribes the principles of fee collection and fee schedule according to a road map (State Bank of Vietnam, 2012) In addition, the circular regulates that the issuing bank is not allowed to collect additional fees outside the promulgated fee schedule while card- accepting units are not allowed to collect POS transaction fees from cardholders Those regulations aim to ensure the harmony of interests among related entities, contributing to improving service quality and sustainable development In parallel with Circular 35, Circular 36 which takes effect from March 1, 2013 provides regulations on equipment, management, operation, and safety of ATM (State Bank of Vietnam, 2013) This circular clearly defines the obligations and responsibilities of relevant parties in ensuring the quality and efficiency of ATMs of payment service providers.

Research methodology

Research methodology covers various aspects of how a research is conducted including research approaches, strategies, and techniques (Collins and Hussey, 2003). Correspondingly, the research methodology is determined upon various factors including the research topic, the background, or the context in which the research topic is examined, the research aims and objectives as well as the researcher themselves According to the research aims and objectives as discussed in the first chapter, this chapter addresses the research methodology in which research philosophy, approach, strategy, sampling, and data analysis will be discussed based on the research onion proposed by Saunders et al.

(2012) The selected research methodology, thereby, will decide the path to take in attaining this study’s final objectives.

Figure 3.5: The research onion (Saunders et al., 2012)

As the bedrock of any research, research philosophy provides the perspectives and guideline to determine the appropriate research approach, strategy, techniques and procedures for data collection and analysis aiming at answering the pre-set research questions According to William and Mays (2002), a research philosophy may be determined based on various disciplines which are defined by philosophical values. The literature reveals two prominent research philosophies including ontology and epistemology.

Ontology refers to “the philosophical study of being” Specifically, research under this paradigm focus on concepts such as existence, reality or becoming as the fundamental categories of “being” Ontology often attempts to deal with questions regarding what is true or real and the nature of reality in terms of how things are related and categorized based on a hierarchy or grouped upon their differences and similarities (Morgan and Smircich 1980, Krauss, 2005, Khin and Heng 2012) On the other hand, epistemology is a research philosophy which asserts that knowledge can be either realized, evolved, or acknowledged Accordingly, this philosophy is concerned with the nature of knowledge, instead of the nature of reality, and different methods of gaining knowledge (Hill, 1984, Khin and Heng 2012) This philosophy answers the question of “what is known” and “how knowledge is captured” Since this research aims to fill the knowledge gap regarding the impacts of perceived costs and perceived benefits of debit card usage, as a transaction, on the willingness to use the card, it is a study of knowledge Epistemology, therefore, is adopted as the primary philosophy of this research.

Positivism and interpretivism are two prominent research paradigms under the epistemology (Eriksson and Kovalainen, 2008) While the former asserts that reliability can be measured upon the employment of valid and reliable tools such as surveys, experiments, simulations (Holden and Lynch, 2004), the latter posits that the reality needs to be further explored or interpreted to either add new knowledge or get insights into the meaning of behaviours or activities based on the researcher’s experience and the stakeholders’ opinions (Saunders et al., 2012) This study will adopt both positivistic and interpretivistic perspectives Firstly, since there is a lack of literature which treats debit card usage as a transaction to examine costs and benefits associated with the use of the card, the interpretivistic paradigm allows the researcher to explore the underlying dimensions of those costs and benefits Next, the postivistic paradigm will enable the measurement of these constructs for further estimating and evaluating the hypothesized relationships between perceived transaction costs and benefits associated with the use of debit cards and the willingness to use the card.

Research approach which encompasses the research strategy for sampling, data collection and analysis is driven by the chosen research philosophies and pre-set research objectives The research approach may be either deductive or inductive Specifically, upon the epistemological grounds, the deductive approach primarily relies on the positivism while the inductive approach is inclined to interpretivism Based on the deductive approach, a study is viewed from a broader perspective to find the answer for the research question regarding the specific unit of analysis In more details, according to this approach, the concepts or theories are created and then tested based on observation (Losee, 1993) On the other hand, the concept of the inductive approach is directly opposite to that of the deductive approach This approach is also referred as inductive reasoning since the research process starts with the observations and eventually, theories are proposed as a result of such observations Based on the research objectives, some studies may adopt both two research approaches This approach is also known as the abductive or the “mixed method” (Levin- Rozalis, 2004) This research approach allows the combination of both inductive and deductive research design, thereby, compensates the weaknesses of each approach with the strengths of the other (Amaratunga et al., 2002).

Although this study will apply the existing concepts and theories regarding transaction costs and perceived benefits and the relationship between those constructs and the intention to use debit cards, detailed dimensions of costs and benefits associated with the use of debit cards as a transaction have not been specified in previous studies Therefore, this research will firstly adopt the inductive research approach to start with observations which will be then conceptualized to develop the full meanings and measurement scales for transaction costs and benefits of using debit cards Next, the deductive research approach is employed in which the transaction cost economics theory and rational choice theory provide the theoretical underpinnings for develop research models and hypotheses which are then subjected to quantitative analysis for testing (Malhotra and Birks, 2006).

According to the research objectives and questions, both descriptive and causal research design are employed in this study In which, the descriptive research design aims to explore dimensions of transaction costs and benefits associated with the use of debit cards by answering the research questions of ‘what’ and ‘how’ while the causal research design aims to give insights into the impact of those costs and benefits on the willingness to use the card (Shiu et.al, 2009).

Wisker (2009) suggests various forms of research strategy including surveys, case study, ethnography, simulations, field experiments, laboratory experiments, archival analysis, role playing, action research, and so on.

According to Yin (2009), survey research primarily focuses on the contemporary phenomena to ask questions such as what, who, where, how much or how many while the control of behavioural events is not required Based on the chosen research approach and the pre-set research objectives, survey is the most appropriate method for this research as it allows the collection of both qualitative and quantitative data Specifically, since previous studies which apply either the transaction cost economics theory or the rational choice theory in explaining customer willingness to use debit cards are non-existent, both qualitative and quantitative research methods will be adopted in this study Specifically, in-depth interviews with individual cardholders will be conducted to develop the hypotheses and measurement scales A quantitative survey method with the employment of questionnaire will be implemented afterwards to test the proposed conceptual model. While the interview method helps to collect primary qualitative responses that suit the inductive research approach, a survey with questionnaire which is conducted latter aims to collect primary quantitative data that meet the requirements of a deductive research.

This research’s survey is conducted upon two primary phases as below:

This dissertation firstly employed in-depth interviews on with 32 Vietnamese debit card users to explore the costs and benefits associated with debit card transactions, the detailed components of those transaction costs and benefits as well as other dimensions of the debit card transactions, including asset specificity, uncertainty and frequency of making payment The qualitative study also helps identify how these constructs could interrelate to each other and influence the card-or-cash decision among the cardholders.Given the fact that personal financial management practices represent a sensitive topic,the personal in-depth interview as employed in this dissertation would help the respondents feel safe and confident to share insightful information The duration of each interview is more or less 30 minutes Upon the permission of the participants, their responses are hand-written After that, the researcher evaluated the responses and either identified the factors or classified dimensions for each factor accordingly Findings from the qualitative phase were then analyzed and combined to serve the development of research hypotheses, conceptual model, and relevant measurement scales of the constructs as featured in the model.

A quantitative survey was then followed to collect quantitative data for testing the conceptual model The survey employed a paper-based questionnaire with a range of closed-ended questions as the primary tool of data collection The questionnaire was designed based on the ‘Flowerpot’ format suggested by Shiu et al (2009) Specifically, the questionnaire starts with general information requirement about respondents’ frequency of making payments for goods and services in average per day, evaluation about the uncertainty, asset specificity, transaction costs, and benefits associated with the usage of debit cards as well as their habits of using cash before ending with questions about personal information such as gender, age, income, location (urban/rural), education level, and emotional intelligence.

In order to develop measurement properties, this dissertation adapts relevant measurement scales which were validated in previous research For example, “perceived benefit” of debit card transactions was adapted from Makanyeza and Mutambayashata

(2018), Venkatesh et al (2012), and Zhou (2011) with four items This research follows the definition of habit as proposed Lawson (2015) that habit reflects “a repeated form of conduct” to adapt the measurement scale for the construct “habit of using cash” with four items from Venkatesh et al (2012) On the other hand, “willingness to use debit cards” was scored upon three items as adapted from Teo and Yu (2005) However, since there is hardly a research which adopts the transaction cost economics theory to examine the behavior of using debit cards, available measurement properties for the relevant constructs, including “perceived monitoring costs”, “perceived adaptation costs”, “asset specificity,

“behavioral uncertainty” and “environmental uncertainty” that suit the context of debit card transaction do not exist As a result, this dissertation takes the key concepts of those constructs and develops new measurement scales for them based on the adaption of relevant measurement scales validated in previous research but adjusted and further detailed according to the findings of the qualitative study in the first research phase The process of designing new measurement properties in this study follows the scale development procedure as proposed by Robert (1991) Specifically, based on the meaning of each construct as defined in the transaction cost economics theory as well as the context of debit card transaction, the author determined what should be measured Correspondingly, interview questions were prepared to support the exploration of the detailed measurement items for each construct For example, the components of “perceived monitoring costs” and

“perceived adaptation costs” were explored through responses for the question that “Do you feel inconvenience or encounter any troubles during your usage of debit cards? Please specify your own experience” Similarly, the detailed measurement items of “asset specificity” were specified upon how participants answer the question, “Is there any specific time, effort or assets that you have made in order to use debit cards?” Finally, the measurement items of “environmental uncertainty” and “behavioral uncertainty” were designed based on the respondents’ answers for the question, “Do you feel assured when you use debit cards? Is there anything that makes you worried or unsure about them?”.

According to the qualitative study’s findings, the measurement items were generated to form an item pool Regarding to the format of the measurement, this research employs a five-point Likert scale ranging from 1 – “Strongly Disagree” to 5 – “Strongly Agree” to score the extent to which the respondents agree with each measurement item for

“asset specificity”, “behavioral uncertainty”, “environmental uncertainty”, “perceived monitoring costs”, and “perceived adaptation costs” On the other hand, following Teo and

RESULTS OF THE RESEARCH

Results from the qualitative study

4.1.1 Dimensions of asset specificity, uncertainty, and perceived transaction costs associated with the use of debit cards

The interview began by asking questions to remind customers about their debit card transaction and more importantly, develop measurement scales for latent variables which indicate dimensions of a debit card transaction but not yet examined in previous studies (asset specificity, behavioral uncertainty, environmental uncertainty, perceived monitoring costs, and perceived adaptation costs) Although frequency of payment is also a dimension of a debit card transaction under the transaction cost economics theory, it is an observed variable Therefore, there is no need to identify detailed aspects of this construct.

According to the transaction cost economics theory, a transaction is characterized by

“asset specificity” or the extent to which they need to invest in an asset which demonstrates high value when it is applied in a certain transaction while for alternative applications, its value is no longer significant (Shelanski and Klein, 1995; Williamson,

1998) Therefore, in order to identify such “specific” assets associated with the use of debit cards, the interview began by asking “Is there any specific time, effort, or asset that you have made in order to use debit cards? Please specify” There were four prominent

“assets” that were reported as “specific” to a debit card transaction First, they need to take time and effort to learn and remember how to execute banking transactions with the debit cards Second, every time they need to access money transferring services associated with the debit cards, time and effort are required to comply with some special regulations and procedures Third, the debit cardholders need to deposit some amount of money into their banks so as to use money transferring services associated with the cards This money could not be withdrawn for alternative uses if they fail to comply with specific banking procedures Finally, using debit cards requires them to have specialized financial and technical knowledge so that they could understand and resolve issues arising during the use of debit cards A few examples of quotes related to asset specificity are as follows:

“I have to deposit money into my debit card account in advance, learn specific banking procedures and remember how it works.”

“ complying with banking regulations and procedures to make payments with debit cards ”

“I have taken time to acquire some knowledge about technical problems and financial issues…that helps me become more confident and efficient in using debit cards.”

Behavioral uncertainty and Environmental uncertainty

The transaction cost economics theory distinguishes two types of uncertainty, including environmental uncertainty and behavioral uncertainty (Geyskens et al., 2006) In this research context, behavioral uncertainty is regarded as the extent to which the debit cardholders are uncertain about the unpredictable disturbances associated with the debit card transaction On the other hand, environmental uncertainty implies their difficulties in predicting the banking performance for debit card transactions Correspondingly, the detailed dimensions of those uncertainties were explored by asking “Do you feel assured when you use debit cards? Is there anything that makes you worried or unsure?” The participants’ concerns could be categorized into behavioral uncertainty and environmental uncertainty as conceptualized accordingly.

Regarding behavioral uncertainty, there were six issues emerged from the participants’ responses Specifically, they are unsure about (1) whether their money in their debit card account is perfectly secured; (2) whether their bank ensures the privacy of their debit card information; (3) whether banking transactions via debit cards are always conducted correctly; (4) whether banking transactions via debit cards can always be conducted whenever they want; (5) whether banking transactions are recorded properly; and (6) whether their bank resolve problems arising during their usage of the debit card timely and properly Some examples of dimensions of behavioral uncertainty identified from participants’ response are as follows:

“I don’t really believe in the security of my deposit in the debit card account and debit card information.”

“It would be a big trouble if my debit card transactions are either recorded or conducted wrongly or the debit card service is unavailable when it is needed.”

“ not sure about customer services when there is any problem arisen…”

On the other hand, the interview results demonstrated three components of environmental uncertainty They include (1) whether debit cards are accepted at points of sale; (2) whether the POS system works properly at the payment time; and (3) whether they bring debit cards with them when it is needed.

A few quotes pertaining to the dimensions of environmental uncertainty are as follows:

“ the only concern is that whether debit cards could be used for making payments at points of purchase ”

“ sometimes, the POS machines fail to process debit card transactions.”

“ because I do not always remember to bring debit cards with me ”

Perceived monitoring costs and Perceived adaptation costs

Based on the conceptualization of “perceived monitoring costs” and “perceived adaptation costs” as featured in the transaction cost economics theory, their detailed components were identified through responses for the question that “Do you feel inconvenience or encounter any troubles during your usage of debit cards? Please specify your own experience”.

Perceived adaptation costs were regarded as costs that the debit cardholders need to spend to adapt with any disturbances arisen during the use of debit cards There were five attributes pertaining to the adaptation costs associated with debit card transaction the most They referred to time and effort needed to deal with problems arising when (1) the debit card is lost; (2) banking transactions are mistaken; (3) banking transactions cannot be processed when needed; (4) banking transactions are recorded wrongly; and (5) debit card information is stolen A few examples of quotes that are related to perceived adaptation costs associated with the use of debit cards are as follows:

“ it was complicated and time consuming when debit cards were not accepted at points of purchase or POS machines were in trouble while I had no cash in hands.”

“the payment was calculated twice, and I did not know why I had to contact with my banks for asking and resolving that issue That was really time wasting.”

“Sometimes I forgot to bring the card and have no cash available Finding back the cards to continue the payment was really time consuming.”

“I forgot the card at the point of purchases and found that someone steal money from my debit card account It took a great deal of time and efforts after that to fix the problem”

In fact, some instances of asset specificity and uncertainty identified in the transcripts demonstrated some linkages with perceived adaptation costs It is evident from the respondents that they have some causal relationships with each other rather than being mutually exclusive In more details, due to “specific” assets that the debit cardholders had invested to use debit card services from their banks, they became more dependent on their banks and vulnerable to any disturbances that may happen during the use of debit cards As a result, asset specificity may influence the perceived adaptation costs For instance, a participant shared that “I need to deposit money into my debit card account in advance” and therefore, when “I forgot the card at the point of purchases and found that someone steal money from my debit card account”, “ it took a great deal of time and effort after that to fix the problem” Similarly, the concerns that the participants raised when they shared about either behavioral uncertainty or environmental uncertainty were highly related to perceived adaptation costs It is argued that if the issues risen from either the banks’ performance or any disturbances during the use of debit cards as the cardholders are uncertain about occur, they need to take time and effort to either adapt or resolve to continue the debit card payment For example, a respondent said that “It would be a big trouble if my debit card transactions are either recorded or conducted wrongly ” He also further shared his real experience that “the payment was calculated twice, and I did not know why I had to contact with my banks for asking and resolving that issue That was really time wasting” to illustrate the adaptation costs that he would face when that case happened.

In addition, another participant shared that “ the only concern is that whether debit cards could be used for making payments at points of purchase” This uncertainty formed her perception about adaptation costs that “ it is complicated and time consuming when debit cards are not accepted at points of purchase or POS machines are in trouble”.

In this research context, perceived monitoring costs could be regarded as costs that the debit cardholders need to spend to monitor their issuing banks’ performance for associated services Correspondingly, the respondents’ answers for the question “Do you feel inconvenience or encounter any troubles during your usage of debit cards? Please specify your own experience” were categorized to identify instances pertaining to perceived monitoring costs while differentiating them from that of perceived adaptation costs Three attributes were mentioned most frequently that are related to perceived monitoring costs including time and effort needed to check (1) the security during banking transactions via debit cards; (2) whether banking transactions are processed correctly, and (3) whether banking transactions are recorded correctly.

A few examples of quotes related to perceived monitoring costs are as follows:

“ feel nervous during the time I wait for and check the SMS message from my banks about the latest transaction to make sure that everything is correct.”

“I am afraid that someone may peek at me when I am entering pass code of my debit cards Therefore, I carefully check the security of the debit card transaction both before and after I access to the money transferring service.”

“ from that accident, I never keep my eyes away from the POS machine to verify the accuracy and success of the debit card transaction.”

In fact, some instances of asset specificity and behavioral uncertainty as explored in the transcripts were closely linked with perceived monitoring costs More specifically, it is argued that due to “specific” assets that the debit cardholders have invested to use debit card services, they become more dependent on their banks and checking banking performance for associated services are obviously needed to protect themselves As a result, asset specificity may influence the perceived monitoring costs. For instance, a participant shared that “I need to deposit money into my debit card account in advance” and therefore, “I feel nervous during the time I wait for and check the SMS message from my banks about the latest transaction to make sure that everything are correct” In addition, it is also evident from the participants’ responses that there may be a causal relationship between behavioral uncertainty and perceived monitoring costs As the behavioral uncertainty demonstrates low trust in banking performance, checking are needed to ensure the accuracy and security of debit card transactions For example, a debit cardholder was worried that “It would be a big trouble if my debit card transactions are either recorded or conducted wrongly, therefore, she never keeps her eyes “away from the POS machine to verify the accuracy and success of the debit card transaction.”

Results from the quantitative study

The intercept survey collected 349 valid responses In order to evaluate the representativeness, the demographic structure of this research sample was compared to that of the Vietnam debit card market population as reported in the Vietnam – Global

Financial Inclusion (Global Findex) Database 2017 (World Bank, 2018) (See Table

4.3) Until the end of 2020, this database is the most updated from World Bank.

Regarding gender, female cardholders account for the majority of both the sample and the overall population However, the sample includes higher proportion of female (63.3%) than that of the population (57.5%) This may be because ATM points were selected as the venue for collecting data while women, as in Vietnamese culture, are usually responsible for their households’ daily payment transactions Therefore, it is more likely that female is intercepted than male at ATM points Table 4.3 also indicates that the sample’s age structure is relatively similar to that of the population Both the sample and the population are dominated by the age group of 23 to 40, with 76.8% and 73.8% respectively With regard to education level, there is a minor difference between the sample and the population Specifically, the sampling units more likely have higher education level than the population units While the sample is dominated by those who attain tertiary education level and above with 84.8%, the same education segment accounts for only 33.5% in the population This sampling error could be explained by the selection of Hanoi city as the venue for data collection In fact, since most of higher educational institutions in the North of Vietnam are located in this city, it is highly likely that a sample drawn from Hanoi has higher education level than the overall population. Regarding monthly income, Vietnamese debit cardholders represents the richest 40% in this country (World Bank, 2018) Meanwhile, statistics from the Vietnam Governance and

Public Administration Performance Index (PAPI) 2018 revealed that 10 million VND and above is the monthly income of about 40% of citizens in this country It is, therefore,estimated that 60.6% of debit card owners in Vietnam have a monthly income from 10 million VND and above This proportion is well reflected in the sample (64.5%) In addition, this research sample represents the dominance of cardholders living in urban areas (i.e., 55.4%) This proportion is suitable to reflect the higher financial inclusion of urban citizens in Vietnam (Morgan and Trinh, 2019) In overall, due to the selection ofATM points in Hanoi city as the venue for drawing a sample for this study, there are some minor sampling errors regarding education and gender structure However, the sample generally reflects most of key features as in the overall population The sample’s representativeness is, therefore, still deemed to be acceptable for further analysis.

Table 4.3: Sampling profile and comparison to overall population

From 5 – less than 10 39.3 million VND 113 32.4

From 20 million VND and above 6 1.7

Location Urban area (City center) 194 55.6% N/A

This dissertation follows the guidance suggested by Anderson and Gerbing

(1988) and Churchill (1979) for evaluate the measurement properties before the quantitative data is used for further analysis Specifically, they are evaluated in terms of reliability, convergent and discriminant validity, and overall fit with the data.

Although there are 11 variables featured in the conceptual model, three of them, including frequency of payment (FRQ), education level (EDU) and location (LO), are observable variables which are measured directly by only one measurement item. Therefore, the assessment of measurement scales was only conducted for the remaining 8 latent variables, including behavioral uncertainty (BU), environmental uncertainty (EU), asset specificity (AS), perceived monitoring costs (PMC), perceived adaption costs (PAC), perceived benefits (PB), habit of using cash (HB), and willingness to use debit cards (WTU).

Firstly, the pool of measurement items for the eight latent constructs undergoes exploratory factor analysis (EFA) on SPSS with principal factor as extraction method followed by a varimax rotation The results show that there are eight factors emerged corresponding to how the eight constructs were initially measured with the total variance explained of 63.849% (in which the Initial Eigenvalue of the first factor is 7.858 representing 23.814% of the total variance explained and that of the eighth factor is 1.106 indicating 3.351% of the total variance explained) (See Appendix 4.2) According to suggestions by Straub (1989), this research confirms the measurement scales’ construct validity and the unidimensionality for the eight latent variables Next, the pool of measurement items for the eight constructs continued to undergo confirmatory factor analysis (CFA) which was conducted on AMOS 22 The CFA allows the evaluation of the convergent validity of latent variables’ measurement items through key indicators, including factor loadings and t -values The CFA results as shown in Table 4.4 indicate that all factor loadings are statistically significant and greater than the cut-off value of 0.4 suggested by Nunnally and Bernstein (1994) Moreover, a CFA on the eight-factor model also revealed a good fit with the data (CMIN/df = 1.921; p=.000; RMR=0.030; GFI=0.872; CFI = 0.909; AGFI= 0.846; RMSEA=0.051; PCLOSE=0.314) (See Table 4.4).

Cronbach’s alpha for each set of measurement scales reflects the reliability or the internal consistency of the constructs Figures in Table 4.5 shows that Cronbach’s alpha coefficients for the each of eight constructs’ measurement scales are either higher than or just below 0.7 The reliability of the measurement scales is, therefore, deemed to be satisfactory A discriminant validity test was also conducted to further evaluate the discriminant validity of the measurement properties based on the calculation of AverageVariance Extracted (AVE) Results shown in Table 4.6 indicate that the AVE values of environmental uncertainty, asset specificity, perceived adaptation costs, perceived benefits, habit of using cash, and willingness to use debit cards are all greater than the recommended level of 0.5 Although the AVE values for behavioral uncertainty and perceived monitoring costs are both just slightly below 0.5 (i.e., 0.469 and 0.481 respectively), all of AVE values are higher than the square of correlations between each of the two corresponding constructs Combined with the CFA results, the convergent validity and discriminant validity of the constructs are still confirmed (Anderson and Gerbing, 1988; Fornell and Larcker, 1981).

Table 4.4: Confirmatory factor analysis results

Notes: Measurement model fit details: CMIN/df = 1.921; p=.000; RMR=0.030; GFI=0.872; CFI = 0.909; AGFI= 0.846; RMSEA=0.051; PCLOSE=0.314;

Table 4.5: Reliability and correlation of constructs

BU EU AS PMC PAC PB HB WTU Reliability

Table 4.6: Average Variance Extracted and discriminant validity test

BU EU AS PMC PAC PB HB WTU

Based on the above results, the pool of all measurement items for the eight constructs are retained for further hypothesis testing.

4.2.3 Assessment of common method bias

This dissertation employs self-reported data as the only source for testing hypotheses This implies potentially high biased correlations between the constructs used in the conceptual model Therefore, according to Podsakoff et al (2003), there is a need for a common method bias test to detect any significant effects of common method variance The literature suggests a variety of techniques serving the assessment of common method bias such as partial correlation procedures, Harman’s single-factor test, multiple method factors test, etc However, neither of them is the best (Podsakoff et al.,

2003) This dissertation, therefore, tests the common method variance upon mixed techniques.

First, the confirmatory factor analysis approach is adopted for Harman’s one-factor test (Olson et al., 2005) Specifically, this test assesses the significance of common method bias by examining whether a single latent factor could pose an alternative explanation to the analysis (Podsakoff et al., 2003) based on confirmatory factor analysis on AMOS.After the twenty-two items are loaded onto a common factor and conducted the confirmatory factor analysis, the one-factor latent model yielded a chi-square of 5272.274(while for the measurement model, χ2 = 897.138).

Since the fit of the one-factor model is apparently worse than that of the measurement model, common method variance is not significant.

Second, since Harman’s one-factor test still has some limitations, this dissertation reassesses the possibility of common method variance by conducting marker–variable partial correlational analysis (Lindell and Whitney, 2001) In more details, this test allows the evaluation of common method variance by employing a marker variable which is not theoretically related to at least one other variable in the measurement model In this research, the construct “I have good control of my own emotions” taken from the Emotional Intelligence Scale developed by Wong and Law (2002) was employed as the marker variable since there was no theoretical basis upon which to suspect this variable would be related to the independent and dependent variables used in the conceptual model. The statistical results indicate that the selected marker variable is not significantly related to any variable in the conceptual model Moreover, after controlling for the marker variable, there is almost no change in the statistical significance of the construct correlations, implying that common method bias was not a serious problem in this study.

In overall, the results of the two common-method bias tests implies that common method bias was not significant in the data.

Table 4.7: Correlation of constructs in the original conceptual model

BU EU AS PMC PAC PB HB WTU FRQ EDU LO

Table 4.8: Correlation of constructs after controlling for the marker variable

BU EU AS PMC PAC PB HB WTU FRQ EDU LO MV

4.2.4 Descriptive analysis on perception about debit card transactions and willingness to use debit cards

According to the survey data, majority of respondents perceive asset specificity associated with using debit cards as of medium to high level (See Table 4.9) Among those

“specific” assets, the time and effort to learn and remember how to execute banking transactions with the debit card and the deposit required in advance are the most concerns.

Table 4.9: Evaluation of perceived asset specificity among Vietnam debit cardholders

Standard deviation Low Medium High

My bank has special regulations and procedures associated with the usage of debit cards that I have to comply with

I spend significant time and effort to learn and remember how to execute banking transactions with the debit card

Using debit cards requires me to have specialized financial and technical knowledge

I have to deposit a significant amount of money at my bank for using debit card services

Source: Extracted from survey data

Regarding the behavioral uncertainty, descriptive results as shown in Table 4.10 show that majority of respondents perceive behavioral uncertainty as medium to high Among their various issues, they concern about whether banking transactions via debit cards can always be conducted whenever they want and in an accurate way the most.

Table 4.10: Evaluation of perceived behavioral uncertainty among Vietnam debit cardholders

Standard deviation Low Medium High

It is difficult to determine whether my bank ensures the security of my deposit

It is difficult to determine whether my bank ensures the privacy of my debit card information

It is difficult to determine whether banking transactions via debit cards are always conducted correctly

It is difficult to determine whether banking transactions via debit cards can always be conducted whenever I want

It is difficult to determine whether banking transactions are recorded properly

It is difficult to determine whether banks will resolve problems arising during my usage of the debit card timely and properly

Source: Extracted from survey data

On the other hand, majority of respondents perceive environmental uncertainty of medium level in which, they mostly find difficult to determine whether debit cards are popularly accepted (See Table 4.11) That may also be the primary reason for cash withdrawal in Vietnam in which cash would be an alternative solution whenever debit cards are not accepted at points of purchase.

Table 4.11: Evaluation of perceived environmental uncertainty among Vietnam debit cardholders

Standard deviation Low Medium High

It is difficult to determine whether the coming transactions accept payment by debit card

It is difficult to determine whether debit cards are popularly accepted

I am not sure whether the POS system works properly at the time I make purchase

I am not sure whether I bring debit cards whenever I need it

Source: Extracted from survey data

Descriptive results from the survey data indicate that majority of respondents perceive that the time and effort that they need to spend on either dealing with issues arisen during their usage of debit cards or checking banking performance for debit card transactions are of medium to high level (See Table 4.12 and Table 4.13) These indicate relatively low perceived quality and low customer trust on banking performance of debit card services among Vietnam debit cardholders.

Table 4.12: Evaluation of perceived adaptation costs among Vietnam debit cardholders

Standard deviation Low Medium High

It takes time and effort to deal with problems arising when my debit card is lost

It takes time and effort to deal with problems arising when my banking transactions are mistaken

It takes time and effort to deal with problems arising when banking transactions cannot be processed when I need it

It takes time and effort to deal with problems arising when my banking transactions are recorded wrongly

It takes time and effort to deal with problems arising when my debit card information is stolen

Source: Extracted from survey data

Table 4.13: Evaluation of perceived monitoring costs among Vietnam debit cardholders

Standard deviation Low Medium High

I spend a lot of effort checking the security during banking transactions via debit cards

I spend a lot of time and effort checking whether banking transactions are processed correctly

I spend a lot of time and effort checking whether banking transactions are recorded correctly

Source: Extracted from survey data

According to the survey data, about two third of respondents perceive that the benefits they receive from the card in terms of both the usefulness of the card and other additional benefits are of low to medium level only (See Table 4.14) Those figures indicate that debit cardholders do not fully recognize the benefits of debit cards for making payment of goods and services.

Table 4.14: Evaluation of perceived benefits among Vietnam debit cardholders

Standard deviation Low Medium High

Using debit cards increases my chances of achieving things that are important to me

Using debit cards helps me accomplish things more quickly

Using debit cards increases my productivity

Using debit cards bring additional benefits to me

Source: Extracted from the survey data

According to this dissertation’s survey data, most of respondents show their low to medium level of willingness to use or consider using debit cards instead of cash for the coming transaction (See Table 4.15) This also indicates the tendency of frequent cash withdrawal among Vietnamese cardholders Given their available cash and existing cash culture in Vietnam, they more likely use cash for their daily transactions How to increase willingness to use debit cards among Vietnamese cardholders is, therefore, a critical question for both the government and commercial banks that this dissertation aims to answer.

Table 4.15: Evaluation of Vietnam cardholders’ willingness to use debit cards

Standard deviation Low Medium High

The probability that I would only use debit cards for the coming transactions is

The likelihood that I would consider using debit cards for the coming transactions is

WTU3 My willingness to use debit cards instead of cash is 349 21.5 65.9 34.1 3.13 0.829

Source: Extracted from the survey data

Summary and discussion of the research findings

This dissertation applied the transaction cost economics perspective to examine the impacts of perceived transaction costs and their dimensions (uncertainty, asset specificity, and frequency) on the willingness to use the cards On the other hand, the rational choice theory was also applied to expand the transaction cost perspective by adding perceived benefits as another determinant of the choice of card payment instead of cash among Vietnamese debit cardholders In challenging the assumption of “bounded rationality” in both the transaction cost and rational choice theories, this dissertation further examines the moderating effects of habit of using cash as well as two crucial determinants of financial literacy in Vietnam, education level and location (urban/rural), on the impacts that perceived transaction costs and perceived benefits have on the willingness to use the card.

Based on the research purposes, there were four sets of hypotheses The first set was about the direct impacts of perceived monitoring costs and perceived adaptation costs associated with debit card usage on willingness to use the card The findings showed that given the card-or-cash decision, perceived adaptation costs significantly influence the willingness to use debit cards In other words, in line with the transaction cost economics theory, the greater perceived adaptation costs associated with debit card transaction are, the less probability that debit cards will be selected over cash for making payment.Nevertheless, there is no significant relationship between perceived monitoring costs and willingness to use debit cards found This result is inconsistent with the transaction cost perspectives and the findings of Teo and Yu (2004) about the role of behavioral uncertainty in shaping choice behavior These findings imply that

Vietnamese debit cardholders decide to use card or cash for making payment mostly based on the extent to which they perceive about the time and effort needed to deal with unexpected events that may occur when using debit cards In contrast, this decision is not affected by their perception about how much time and effort needed to check banking performance This may be because of the improvement of debit card services, especially the increasing popularity of Internet banking and mobile banking in recent years that allows banking transactions easily and conveniently to be checked and tracked with less costs (Rawashdeh, 2015; Al-Smadi, 2012) In fact, e-banking has been adopted by more than one third of Vietnamese debit card holders (World Bank, 2018) This application allows the cardholders to check their history of transactions either automatically after each transaction conducted or whenever they want with their smartphones or computers As a result, administering banking performance of money transferring services has become more convenient and controllable The role of perceived monitoring costs in the cardholders’ cash-or-card decision is, therefore, insignificant.

The second set of hypotheses was about the mediating role of perceived transaction costs in the impacts of asset specificity, behavioral uncertainty, environmental uncertainty, and frequency of payment on the willingness to use debit cards The results indicate that the extent to which the cardholders perceive about adaptation costs during the use of debit card significantly depends on asset specificity, behavioral uncertainty, environmental uncertainty, and frequency of making payment In more details, asset specificity reflects how much transaction-specific assets they need to invest, such as the level of dependence on the issuing banks, time, and effort to learn and comply with special procedures required for using debit card services While behavioral uncertainty indicates how much they are uncertain about their banks’ capacity and integrity in delivering safe, consistent, and accurate money transferring services, environmental uncertainty denotes disturbances that may occur when using debit cards On the other hand, frequency of making payment refers to how frequent they settle the payment for purchased goods and services every day.Among these factors, only environmental uncertainty and behavioral uncertainty have negative impacts on debit card holders’ willingness to use the card These relationships could be explained through the mediating effect of perceived adaptation costs In other words, behavioral uncertainty and environmental uncertainty towards debit card transaction raise the problems of monitoring and adaptation and hence, incur transaction costs while that would not happen in case of cash use As a result, debit cardholders become less willing to use the card and tend to use cash for making payment instead to avoid those costs More specifically, the debit cardholders are worried that the card may be either unavailable, unaccepted, or unusable at the points of purchase If those cases happen, they need to bear adaptation costs to continue the payment For example, they need to wait for fixing technical problems, finding back the cards, or withdrawing cash at the nearest ATM points as a substitute In the context of Vietnam where is characterized by the dominance of traditional retail formats with wet markets, street stores, and independent stores where most retailers have not been equipped with modern payment instruments yet, this environmental uncertainty is even more substantial (Deloitte, 2018) Moreover, even though e-commerce has increasingly become a popular shopping trend, cash on delivery still accounts for 88% online transactions in this country since online shoppers place low trust on the e-tailers while the shippers are mostly not equipped with POS machines (Appota, 2018) As a result, the cardholders still hold some cash as a need and become less willing to adopt card payment On the other hand, when the debit cardholders use the card for making payment, they are also uncertain about whether banking transactions are always conducted and recorded correctly If they face any trouble during the use of debit cards, they are also unsure about whether their banks will support them timely and properly If the above cases happen, they need to take time and effort to deal with the arising problems This further discourages them from using the card This finding implies that despite Vietnamese commercial banks’ effort to continuously improve service quality, the cardholders still do not really trust their banks’ integrity and capacity in providing consistent card service quality and taking proper actions when dealing with cardholders’ complaints This issue may arise from either the banking service quality itself or insufficient communication efforts to build bank trust among the cardholders Overall, uncertainty is the primary reason for Vietnamese debit card holders’ hesitance to use debit cards for payment transactions This causal relationship could be explained through the time and effort that the cardholders need to spend to deal with any problems arising from either the contextual factors or the banking performance These findings are in line with the transaction cost economics theory about the interrelationship between transaction participants’ uncertainty, perceived transaction costs, and choice of transaction governance modes They are also consistent with Karoubi et al (2016) regarding how various risks associated with card use negatively influence the individuals’ intention to use card for making payment Those risks include “unavailability risk” or the probability that the card is not available when needed (being lost or forgotten) and “unacceptance risk” of the probability that the card is not accepted at the point of sales or unusable due to technical errors They, in fact, reflect some dimensions of environmental uncertainty Nevertheless, in contradiction to the transaction cost economics theory, asset specificity demonstrates no significant influence on willingness to use the cards This may be because the cardholders get used to the procedures for accessing debit card services while placing certain trust on the safety of their assets deposited in the issuing bank Moreover, given the efforts of commercial banks in expanding the network of ATM points, the cardholders may find easy to convert their money in debit card accounts into cash for alternative uses and no longer feel too dependent on the issuing bank Consequently, asset specificity is not a crucial concern when they consider using cash or card.

The third set was about the direct impacts of perceived benefits associated with the use of debit cards, as a transaction, on the willingness to select the card for making payment.

In line with the rational choice theory, not only perceived transaction costs but also perceived benefits significantly affect the cardholders’ willingness to select debit cards over cash for making payment In more details, these perceived benefits indicate the possible outcomes of using debit cards for making payment, including both the perceived usefulness of the card and other add-on benefits, such as discounts, for using money transferring services associated with the debit cards in payment transaction This finding supports Dyer (1997), Gibbon (2010) and Grossman and Hart (1986) regarding the existence of transaction value and its effect on the choice of transaction governance modes Since this research uses perceived usefulness as an important proxy of perceived benefits, the above finding is also consistent with previous studies which employ the unified theory of acceptance and use of technology and theory of adoption model to treat the use of debit cards as a technology adoption (Kissi et al., 2017; Makanyeza and Mutambayashata, 2018; Oanh and Cassidy, 2018) Compared to perceived adaptation costs, cardholders’ perception towards the benefits of card transaction demonstrates stronger impacts on the willingness to use debit cards This implies a good sign for enhancing the usage rate of debit cards in Vietnam Specifically, despite the adaptation costs associated with the card transaction, the choice of debit card is driven more by either the usefulness of the cards and add-on benefits when conducting payment transactions via card that could be easily controlled and accelerated through promotional campaigns.

The final set of hypotheses was about the moderation effects of habit of using cash,education level and location (urban/rural) on the relationship between perceived adaptation costs and willingness to use debit cards It is found that the habit of using cash to make payment among Vietnamese cardholders not only has a significant negative impact on the willingness to use debit cards but also dampens the contribution of rational cost-benefit analysis to the cardholders’ decision to select debit cards In other words, the cardholders who demonstrate stronger habit of using cash will less concern about perceived benefits and, more significantly, perceived adaptation costs associated with the use of debit cards when they consider using cash or card The reason is that they are automatically driven by cash preference resulted from their existing habit of using cash This finding supports Acheson (2002) that habit could influence human’s choice behaviour through its impact on preferences This finding implies that the strong cash culture which nurtures the habit of using cash for making payment is the crucial element that explains the low actual usage rate of debit cards among Vietnamese debit cardholders for years The inherent cash habit also makes the efforts of Vietnamese government and commercial banks in raising the awareness about the usefulness of debit cards and offering add-on benefits associated with the card become less efficient and sometimes wasteful, especially among those who have higher propensity to use cash in payment In other words, persuading the cardholders who has stronger habit of using cash, is, indeed, more difficult than others with weaker cash habit.

On the other hand, the relationship between perceived adaptation costs and willingness to use debit cards becomes less negative among better-educated cardholders In addition, the significance of perceived benefits to the choice of debit cards is significantly stronger among those who attain better education In other words, the card-or-cash decision of the better-educated cardholders are more driven by the positive sides (benefits) rather than the negative sides (costs) of the debit card transaction This could be explained by the differences in the way the cardholders perceive about the benefits of debit card transaction. More specifically, Vietnamese debit card holders who attain higher education may have better financial literacy given their easier access to financial services, better capacities to obtain financial knowledge as well as a better chance of associating with high value transactions Those favourable conditions enable them to fully recognize the benefits of debit cards in money transactions and become more confident in resolving disturbances during the use of debit cards As a result, they become less concerned about perceived adaptation costs but more affected by perceived benefits when making the card-or-cash decision These findings are consistent with Chan (1997) which affirmed that active cardholders are better educated than their inactive counterparts.

Similarly, the research also reveals that urban citizens are less influenced by perceived adaptation costs in their decisions to use debit cards than those who live in rural areas This could be explained by the better financial knowledge accumulated by Vietnamese urban citizens (Morgan and Trinh, 2019) that helps them more confident in their capacities to deal with disturbances during the use of debit cards compared to the rural counterparts As a result, time and efforts needed to resolve with issues arising during the use of debit cards become less important to them in making the card-or-cash decision.

In a broader sense, this finding further affirms the importance of enhancing financial literacy, especially in developing economies (Atkinson and Messy, 2012) On the other hand, the insignificant moderation effect of location (urban/rural) on the relationship between perceived benefits and the willingness to use debit cards implies an interesting fact that both urban and rural areas are influenced by perceived benefits in their decision to use debit cards at the same extent.

Implications about increasing usage rate of debit cards among Vietnamese cardholders

According to this dissertation’s survey data, most of respondents show their low to medium level of willingness to use or consider using debit cards instead of cash for the coming transaction This also indicates the reasons of frequent cash withdrawal among Vietnamese cardholders Given their available cash and existing cash culture in Vietnam, they tend to use cash for their daily transactions How to increase willingness to use debit cards among Vietnamese cardholders is, therefore, a critical question for both the government and commercial banks that this dissertation aims to answer.

In order to solve this research question, this dissertation takes new theoretical perspectives in examining the willingness to use debit cards given the focus on the segment of cardholders, who have already begun the adoption of debit cards The research findings indicate that Vietnamese cardholders’ willingness to use debit cards is directly influenced by (1) perceived benefits and (2) perceived adaptation costs Perceived adaptation costs are, in turn, significantly affected by debit cardholders’ perception about

(3) asset specificity, (4) behavioural uncertainty and (5) environmental uncertainty. Amongst them, the impacts of both environmental uncertainty and behavioral uncertainty on willingness to use the card are mediated by perceived adaptation costs Moreover,education level dampens the negative impacts of perceived adaptation costs on willingness to use debit cards while having a complete positive moderation effect on the relationship between perceived benefits and willingness to use the card Similarly, urban citizens are also found to be less influenced by perceived adaptation costs in their willingness to use the card The moderating roles of both education level and location(urban/rural) in the impacts of perceived benefits and perceived transaction costs on the willingness of using the card can be explained by the differences in the (6) financial literacy among those who attained better education and those who are less educated as well as between citizens who living in urban areas and those who live in rural areas On the other hand, (7) cash habit negates the impacts of perceived adaptation costs to become another significant determinant that makes Vietnamese cardholders less willing to use the card Correspondingly, this dissertation proposes 7 groups of solutions for the government and commercial banks to enhance the usage rate of debit cards among the public.

5.2.1 Implications about perceived benefits of debit cards

Perceived benefit is not a new determinant of intention to use debit cards in the literature In this dissertation, the research findings imply that more actual use of debit cards could be accelerated by enhancing the debit cardholders’ perception about the benefits of debit card transactions However, according to the survey data, about two third of Vietnam debit cardholders perceive that the benefits they receive from the card in terms of both the usefulness of the card and other additional benefits are of low to medium level only For years, educating the citizens about the usefulness of the card as an efficient substitute for cash through marketing communication activities and providing add-on benefits of using debit cards for payment such as discounts when doing card payment transactions have been core strategies of both the government and commercial banks. Nevertheless, more efforts could be taken to enhance the usefulness and value of using debit cards This dissertation suggests some practical implications for commercial banks and the government as below:

The cardholders may have a courage to deposit more money in their debit card account and avoid cash withdrawal if commercial banks allow some attractive interest rates on debit card deposits In addition, commercial banks could add some values to debit card use by creating a hybrid form between the debit card and the credit card Specifically, debit cardholders could benefit from some amount of credit allowed by the issuing bank in case of overdraft In fact, this practice has been adopted in many European commercial banks Moreover, the commercial banks should enable customers to use debit cards as a versatile payment tool to serve the needs of e-commerce transactions Specifically, despite of the fact that Internet banking service allows customers to make online payment, many shoppers select Cash on Delivery method since they do not trust the sellers However, in order to encourage more card payment transactions at the time of delivery, there should be another payment method available -

“Card on Delivery” so that the shoppers could pay by using debit cards when they receive the purchased goods from the shippers In doing so, POS should be simplified, portable and equipped for all shippers.

In order make the payment card more useful, and thereby, accepted more popularly in the daily transaction, it is a need to improve the utility and security of debit cards It is proposed that a debit card could be issued with full functionality of an ID card This not only improves the utility of the card but also ensure the transparency and security of debit card payment transactions.

5.2.2 Implications about perceived adaptation costs of debit card use

Perceived adaptation costs, as a determinant of the card-or-cash decision, is a new contribution of this dissertation In more details, “perceived adaptation costs” represent time and effort that the cardholders need to spend on resolving problems during the use of debit cards Those disturbances may include debit cards are unavailable (being lost or forgotten), unaccepted or unusable (due to technical issues) at points of sale; mistakes in processing and recording debit card transactions, and debit card information theft. These could significantly make the cardholders hesitant to involve with debit card payment even when they have the card According to the survey data, majority of respondents perceive that the time and effort that they need to spend to deal with issues during their usage of debit cards are of medium to high level Since this may discourage cardholders from using debit cards for daily transactions, appropriate measures should be taken to reduce the actual adaptation costs as well as cardholders’ perception about such adaptation costs.

In this dissertation, it is recommended that commercial banks should firstly improve their own service quality to minimize the cardholders’ perception about adaptation costs by providing effective adaptation measures with clear instructions Specifically, these measures should facilitate efficient and timely cooperation between the issuing bank and the cardholder to take quick actions in dealing with card loss, information theft, mistakes in processing and recording card transactions while ensuring high security Furthermore,those measures need to be communicated effectively to the cardholders so as to directly neutralize their perceived adaptation costs Specifically, there should be clear instruction about various types of disturbance arising during the use of debit cards, how the issues could be dealt with, and the responsibilities of the banks in such cases Those instructions should be available in the application form for opening debit cards, on the websites of the banks and could be sent directly to customers through emails or messages whenever they request.

In order to mitigate the concerns about adaptation costs among debit cardholders, the government should complete relevant frameworks regarding the rights and obligations of the cardholders and commercial banks in case of popular disturbances that may arise during the use of debit cards This also acts as the legal base for each commercial bank to adapt and announce procedures and constructions for resolving typical problems incurred.

5.2.3 Implications about asset specificity associated with debit card use

The research findings reveal that the perception of asset specificity may intensify perceived adaptation costs, a determinant of the willingness to use debit cards Asset specificity indicates debit cardholders’ specific resources that they need to spend on using the card including (1) a significant amount of money that they need to deposit into debit card accounts in advance that raises the issue of dependence on banks for using their own money and (2) time and effort needed to learn and comply with specialized regulations and procedures required by the issuing bank in order to access debit card services In fact, the issue of asset specificity is mostly neglected in strategies to increase the use of debit cards in Vietnam According to the survey data, majority of respondents perceive asset specificity associated with using debit cards as of medium to high level Reducing perceived specificity is, therefore, should be included in the set of strategies for increasing usage rate of debit cards.

In order to reduce the perception of the asset specificity, commercial banks should enhance the flexibility and convenience for debit cardholders in using their money deposited in debit card account In fact, for years, the government and commercial banks have taken efforts to increase the number of ATMs across the country This makes it easier for cardholders to convert money in debit card accounts to cash However, this strategy could further encourage customers to use cash by reducing time and effort of cash withdrawal Therefore, in this dissertation, it is recommended that commercial banks should allow debit cardholders to convert their money in debit card accounts into other forms of non-cash means of payment such as e-wallet so as to increase the flexibility of using money in debit card account while maintaining the objectives of reducing cash in the economy.

On the other hand, the procedures and regulations required for using debit cards should be simplified by applying new modern technologies Recently, Tienphong Bank has become the pioneer in using face recognition technology at ATM Specifically, at their LiveBank, customers only need to stand in front of the machine and look at the camera while the machine will recognize them within 3 seconds and confirm the additional fingerprint before allowing the customers to perform show all normal transactions at ATM. While Apple's Face ID can only compare a face stored in a mobile device, LiveBank's facial recognition technology is superior in allowing to distinguish each customer from millions of other people in the banking system data This technology uses Depth Camera with Liveness check function (assuring real people, anti-impersonation with photos or videos) and uses AI technology (artificial intelligence) to capture accurate face data by projecting and analysing over tens of thousands of image dots to create a depth map of the face, identifying the edges of the face, shape, and eye position, and detecting motion, etc and recording customer images before storing in the system These operations ensure absolute safety and security for customers while avoiding card and password information being exposed.

The face recognition technology like this should be applied widely among commercial banks in Vietnam so as to simplify the procedures and regulation required for card payment transactions, thereby, enhancing the willingness to use money in debit card account for making cashless transaction The commercial banks could use this technology as the alternative to a debit card at ATM while still issuing physical ones to be used at POS or just a type of physical evidence for money transferring services.

Vietnam government, especially the State Bank of Vietnam should implement national projects which aim at supporting commercial banks to approach and install new advanced technology for the plastic card service system Those supports could be in different forms such as financial resources, technical expertise, legal issues, and marketing communications so as to accelerate the simplification of card payment transaction procedure.

5.2.4 Implications about behavioral uncertainty associated with debit card use

Contribution of the dissertation

This dissertation has some significant contribution to the academic literature in customer behavior in general and banking marketing First, the use of plastic cards has been widely explained as either a reasoned action, a planned behavior, a technology adoption, and a lifestyle choice under various theories such as the theory of reasoned action/ planned behavior, the theory of adoption model, and the unified theory of acceptance and use of technology (Ali et al., 2017; Khare et al., 2012; Makanyeza and Mutambayashata, 2018; Worthington et al., 2007) However, the transaction cost and rational choice perspectives in examining the determinants of the willingness to use debit cards have not been documented in the literature This dissertation, therefore, takes a fresh perspective in exploring and investigating factors influencing the choice of debit cards over cash in making payment, in which the use of debit card is treated as a transaction between the card issuing bank - the “service provider” and the cardholder - “the buyer” under the theoretical underpinnings of the transaction cost theory and rational choice theory Especially, although the transaction cost theory is mostly adopted in the organizational context, the significant mediating role of perceived adaptation costs in the impacts of environmental uncertainty and behavioral uncertainty on the willingness to use debit cards as found in this dissertation further affirm the viable adaption of this theory in explaining individuals’ choice behavior.

Second, given the fact that there is limited research which adopt the transaction cost economics theory to explain individuals’ behaviour, this dissertation contributes to the literature by developing and validating the measurement properties for scoring various constructs in this theory including asset specificity, behavioural uncertainty, environmental uncertainty, transaction frequency, perceived monitoring costs, perceived adaptation costs and willingness to take a specific choice These measurement scales and the procedure to develop them could be adopted in future research about the use of debit cards or adapted to suit other research contexts.

Third, beyond a transaction, this research further takes an insightful perspective to examine debit card usage as a rational choice This suits to the focus of this study on the debit cardholders who always have two primary alternative choices whenever making payment, cash, or card Based on the theoretical underpinnings of the rational choice theory and the criticism about the transaction cost economics theory, this study also further expands the transaction cost approach by adding the construct “perceived benefits” into the conceptual model as another determinant of the willingness to use debit cards. Correspondingly, the dissertation further contributes to not only the existing literature about the use of debit cards but also how the adaptation of transaction cost economics theory could be expanded to compensate its limitations Specifically, this dissertation follows the propositions by Dyer (1997) and Watson et al (2005) to affirm that the debit card transaction does not only incur costs but also bring about benefits to the cardholders. Those benefits are resulted from not only the usefulness of the card as suggested in previous studies, but also other add-on benefits involved with the transaction such as discounts for card payment.

Fourth, this dissertation provides interesting findings regarding how the level of rationality may affect the extent to which perceived costs and benefits may influence individuals’ choices Specifically, although both the transaction cost economics theory and the rational choice theory assume that economic agents act rationally in a way that optimize their resources for the greatest satisfaction, individuals are, in fact, partly rational only (Simon, 1957, 1991) This may be due to the existence of habits which shape human behaviour and choice through its influence on individuals’ preferences (Acheson, 2002;Venkatesh et al., 2012) as well as their limited capacity in processing information and solving complex problems (Simon, 1957, 1991) In the context of the card-or-cash decision for making payment, this dissertation finds that all of cash habit, education level and location (urban/rural) moderate the negative impacts of perceived adaptation costs on willingness to use debit cards More specifically, those who live in urban areas and better educated are less affected by perceived adaptation costs in their decision of using debit cards Meanwhile, those who demonstrate strong habits of using cash will be more discouraged by perceived adaptation costs to select the card for making payments On the other hand, cardholders who obtain better education are more influenced by perceived benefits in their decisions to use debit cards while location and habit of using cash do not change the relationship between perceived benefits and willingness to use the cards.

Fifth, given the special situation of Vietnam debit card market which is characterized by high penetration yet low usage rate of debit cards, this study provides more empirical evidence and insightful explanation of such distinct context Although there have been a number of researches which have examined the either intention or adoption of debit cards among Vietnamese individuals, those studies fails to take a comprehensive cost-benefit perspective to evaluate this use behavior Moreover, for the cardholders who have already adopted debit cards, the use of the card should be treated as a choice or the willingness to select debit cards over cash rather than a new adoption or an intention to use as a single option This dissertation, therefore, contributes significantly to the literature by focusing on the segment of the Vietnamese cardholders and providing a new suitable approach to explain the debit card use of this segment Correspondingly, this dissertation provides effective strategies to properly deal with the issue of low debit card usage rate in Vietnam,one of the most heavily cash based in the world.

Limitations and future research direction

This research has some limitations First, although a sample drawn from Hanoi city may reflect most key features of Vietnam debit card market, the representativeness of the sample as drawn is not really perfect In fact, compared to the population structure, the sample structure implies some apparent sampling errors regarding education level and gender of the sampling units Moreover, the differences in social values and lifestyles among citizens from the North, the Middle and the South of Vietnam may affect the debit cardholders’ behaviour Second, the application of the transaction cost economics which assumes about the existence of “opportunist behavior” in this dissertation also implies a limitation Ghoshal and Moran (1996) criticized this theory’s exaggeration about the risk of opportunism It is because this threat could be mitigated by the “invisible hand” of the market In the context of debit card market, the probability of banks’ opportunistic behaviour as assumed under the transaction cost economics perspective is actually low since Vietnamese commercial banks’ activities are strictly administered by the governments with well-developed relevant constitutions In fact, this dissertation found that perceived monitoring costs has no significant relationship with willingness to use debit cards This finding further supports the limitation of the assumption about “opportunism” Third, the selection of ATMs points as the venue for data collection in this study may cause some selection bias The reason is that although the respondents may come to the ATM points for either withdrawing or transferring money, given the heavily cashed based situation in Vietnam, it is more likely that they come to ATM points to withdraw money As a result, the more money they have in hand, the less willingness to use debit card In addition, some of them may have intention to use cash in the next transactions before coming to the ATM for withdrawing money Fourth, due to the concerns of model parsimony and data collection efficiency, this study did not collect and exploit fully some personal characteristics which may also affect the use of debit cards such as: the length of owning debit cards (higher-experienced holders tend to use debit cards), the number of different bank accounts (holders of different bank account tend to transfer money across banks), occupation (officials and bank staffs are willing to use debit cards), marriage status, number of children (parents tend to transfer money to their child and pay education fees through bank service) and use the Mobile banking or Internet banking (those having such banking services tend to use transferring transactions) Finally, this study only collects cross-sectional data However, after the card holder adopts and gets used to e-banking services or other new banking technology associated with debit cards, the card holders’ perception about the transaction costs of debit cards could be changed accordingly Upon the cross-sectional data, this dissertation could not draw any conclusions about how the determinants of the willingness to use debit cards and the magnitude of their impacts may vary over time.

This dissertation also implies some further research directions Firstly, this research could be either revisited or expanded with the employment of a better sample which has larger size, more diverse characteristics, and being collected from a wider range of venues in the North, the Central and the South of Vietnam to ensure better representativeness of the sample The comparison of the findings from different samples drawn from the three regions may provides more insightful implications and suggestions In addition, future studies may adopt “a vignette” as the primary research methodology to yield more reliable findings This methodology is a type of psychological and sociological experiment presenting a hypothetical situation so that participants respond by expressing their perceptions, values, social norms, or impressions of events will be used for data generation(Singhapakdi et al., 1996) Specifically, the participants could experience real shopping environment in which their decision to use cash or debit card for payment is recorded directly through their actual behaviour After that, they will be required to fill out a questionnaire about their evaluations about the costs and benefits of transaction cost transaction This methodology allows the observation of real customers’ choice between cash or card rather than their subjective answers about the extent to which they are willing to use debit cards.

Secondly, future research could provide more interesting and insightful findings by employing the longitudinal data on the changes of the cardholders’ perception about various dimensions, costs, and benefits associated with debit card transaction over time. Correspondingly, those researches could give insights into the changes in the nature of the impacts of perceived transaction costs and benefits on the card-or-cash choice as time flies as well as reveal factors that may change those relationships.

Thirdly, existing theories which have been used in the literature on factors affecting the use of plastic cards, including the theory of reasoned action/ planned behavior, the technology adoption model, and the unified theory of acceptance and use of technology could be expanded by adding perceived transaction costs as either a determinant of plastic card use or a moderator Correspondingly, the expanded models could provide a more comprehensive approach in explaining individual intention and behavior and therefore, draw more insightful implications for policy makers and bank managers This could be applied in various research contexts other than the use of plastic cards such as the use of internet banking and mobile banking or the use of e-wallets, etc.

Fourthly, the literature has revealed some expansion in the adaption of the transaction cost economics theory to the contexts which do not really reflect the make-or- buy problem The theoretical underpinning of this expansion is that facing various transaction governance models, individuals will select the one with lower transaction costs (Singh and Kapoor, 2018) This expanded transaction cost approach could be further applied in examining customer choices of various banking and financial contexts such as the selection between a debit card or a credit card, e-wallet or “physical” wallet; informal finance or formal finance practice, involving in the black market or a mainstream bank, etc.

Fifthly, since technology continuously evolves while customer behaviour may change quickly, the longitudinal data could reveal more interesting results than cross- sectional data do Nowadays, where there is an increasing number of customers who useInternet banking, e-banking and e-wallet which may link directly with the debit card account, commercial banks can collect Big Data across various real time Future research should take advantages of Big Data in the banking system to revisit this study or examine the choice of means of payment in other contexts.

Sixthly, according to Acheson (2002), there are three factors making up rational choices of individuals, consisting of constraints, beliefs, and preferences Future research, therefore, could dig a bit deeper in exploiting these three factors for expanding the findings of this study Specifically, future studies could examine either the direct effects or moderating roles of structural constraints such as any political, economic, social, and cultural factors which may limit individual decision-making ability and financial constraints on the selection for means of payment Regarding beliefs, although the use of card or cash in Vietnam is hardly linked with any religion, future research could explore the relationship between the religion and the selection of cash or card in other countries where appropriate On the other hand, as the use of debit cards may involves with various risks and uncertainty, the preference towards the card use may be affected by the extent to which the cardholders are risk-averse or risk-lover Future studies could further explore either the direct impact or moderating effect of this characteristic on the willingness to use debit cards.

Finally, as all variables used in the conceptual model are at individual level, it is difficult to control the respondents for more reliable findings Future research, therefore, should add more contextual or organizational moderators such as the individuals’ exposure to advertising of using debit cards, promotion programs, and social-cultural influence in the conceptual model In addition, more data about personal characteristics should be added and included in the model as the control variables such as the length of owning debit cards, the number of different bank accounts, occupation, number of children and use the Mobile banking or Internet banking.

In Chapter 5, this dissertation presents the summary and discussion of the research findings Drawn from factors which are found to either directly or indirectly affect the willingness of debit cards among the cardholders, the dissertation proposes seven groups of implications for either the Vietnam government or Vietnam commercial banks to raise the usage rate of debit cards among the cardholders Finally, the dissertation acknowledges some limitations and propose some directions for future research.

Despite the efforts of Vietnam government, especially the State Bank of Vietnam, commercial banks, and other financial institutions to introduce many modern means of payments, Vietnam is still one of the world’s most heavily cash-based economies As the first and the most popular non-cash payment in this country, debit cards play an important role in developing a cashless economy However, Vietnamese cardholders mostly use debit cards to withdraw cash rather than adopt them as a truly substitute for cash for daily payment transactions As a result, Vietnam debit card market is currently still characterized by high penetration yet low actual usage rate Given this special research context, this dissertation aims to answering a critical question for both the government and commercial banks regarding how to raise the debit card usage rate among the card adopters and thereby, supporting the development of a cashless economy in this country.

This dissertation takes a new lens in examining the use debit cards, as a substitute for cash among Vietnamese cardholders, in which the extent to which a cardholder is willing to use debit cards reflects their choice between debit card transaction and cash transaction upon the employment of transaction cost economics theory and rational choice theory Correspondingly, the focus of this dissertation is two-fold The first objective is to examine, for the first time, the use of debit cards as a transaction between the debit card holders and their issuing banks for money transferring services upon the transaction cost economics theory The second objective is to expand the application of this theory by adding perceived benefits as another determinant of the willingness to use the cards following the theoretical underpinnings of the rational choice theory This dissertation also further challenges the assumption of the two theories regarding “bounded rationality” of the transaction participants by exploring the moderating effects of habit, education level and location (urban/rural) on the impacts of perceived transaction costs and perceived benefits on the willingness to use debit cards.

This study was conducted upon two primary phases First, this research firstly conducted in-depth interviews with 32 Vietnamese debit card holders to serve the development of hypotheses and measurement properties This dissertation follows the seven-step procedure proposed by Robert (1991) to develop detailed measurement items for constructs which have no available measurement scales in the literature The qualitative study was followed by a survey to collect quantitative data for testing the research hypotheses About 720 paper-based questionnaires were distributed at 36

ATM points in Hanoi Respondents were selected using the random sampling method Due to missing data, the quantitative survey yields 411 responses for the study but only

The statistical results reveal some interesting findings First, willingness to use debit cards is influenced by perceived benefits and perceived adaptation costs Second, while all of asset specificity, behavioral uncertainty, and environmental uncertainty significantly intensifies perceived adaptation costs, this type of transaction costs only mediates the impacts of environmental uncertainty and behavioural uncertainty on the willingness to use debit cards Third, cash habit negates the impacts of perceived adaptation costs on willingness to use debit cards In other words, those who have stronger habits of using cash are less concerned about perceived adaptation costs in their decision of using debit cards Finally, both education level and location (urban/rural) moderate the negative impacts of perceived adaptation costs on willingness to use debit cards More specifically, those who live in urban areas and better educated are less affected by perceived adaptation costs in their decisions of using debit cards On the other hand, those who attain better education are significantly more influenced by perceived benefits in their decisions to use debit cards.

Combining the above findings, this research provides a scientific-based explanation for the heavily cash-based situation in Vietnam with two primary reasons First, the cardholders are uncertain about whether the coming transactions accept payment by debit cards or not; and even when debit cards are accepted, whether the POS system works properly and whether they themselves remember to bring debit cards with them Moreover,they are also uncertain about whether my bank ensures the security of their deposit and the privacy of debit card information In addition, when they use debit cards for making payment, they are unsure about whether banking transactions are always conducted and recorded correctly If they face any trouble during the use of debit cards, they are also uncertain about whether their banks will support them timely and properly If the above cases happen, they need to take time and effort to deal with the arising problems As a result, the willingness, or the probability that they would select debit cards for the coming transactions is relatively low Consequently, they tend to stock some cash in hands as an alternative or even as a contingency option Second, even when owning a debit card, many people do not understand or realize fully the benefits of debit cards in money transactions.One crucial reason is that they do not involve with high value transaction on frequent basis Given both cash and debit cards in hands, those who have stronger habit of using cash and little financial literacy (who are less educated and living in rural areas) are again more inclined to using cash since they are more influenced by the downsides of debit card transactions rather than its benefits After all, the usage rate of debit cards is low and using cash is still

“a fact of life” in Vietnam This dissertation significantly contributes to the literature on determinants of plastic card use in particular, and customer behavior study in general This research’s findings also provide reliable scientific basis for policy makers and commercial banks those seek insightful implications for designing effective strategies to increase the actual usage rate of debit cards.

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List of questions used in the in-depth interview

1 “Do you feel inconvenience or encounter any troubles during your usage of debit cards? Please specify your own experience”.

2 “Is there any specific time, effort, or asset that you have made in order to use debit cards? Please specify”.

3 “Do you feel assured when you use debit cards? Is there anything that makes you worried or unsure about them?”

4 “Do you use cash or debit cards for making payment, and why?”

5 “Are you willing to use debit cards for 100% of transactions instead of cash, and why?”

6 “Are you willing to switch to use cash for all payment transactions, and why?”

Questionnaire (English Version)

The research “Factors influencing willingness to use debit cards among Vietnamese card holders: Transaction cost and rational choice perspectives” is run by Ms Dung Phuong Hoang, a PhD student from National Economics University to examine the determinants of the willingness to use debit cards in Vietnam Your answers will be confidential to the researcher and mixed with that of other respondents to provide insights into costs and benefits of using debit cards and their influences on the willingness to use the card that may be used by commercial banks and policy makers to improve the quality of payment instruments for you.

The survey is divided into sub-sections appropriately asking about your frequency of making payment, evaluation of costs and benefits associated with the use of debit cards, your habit of using cash as well as your willingness to use the cards Some personal questions are included at the end only with the aim of checking the representativeness of the research sample and making comparison between different demographic groups It is grateful if you complete all questions of the survey The data will not be used to identify any individuals.

Section 1: General information about frequency of making payment

1 How frequent do you make payments for goods and services (by either cash or card) at points of purchase on average?

Less than once per dayOnce or Twice per day3-4 times per day5-6 times per dayFrom 7 times and above per day

Section 2: Assessment of costs and benefits of using debit cards

2 To what extent do you agree with the following statements about uncertainty during the use of debit cards due to the issuing banks’ performance:

It is difficult to determine whether my bank ensures the security of my deposit

It is difficult to determine whether my bank ensures the privacy of my debit card information

It is difficult to determine whether banking transactions via debit cards are always conducted correctly

It is difficult to determine whether banking transactions via debit cards can always be conducted whenever I want

It is difficult to determine whether banking transactions are recorded properly

It is difficult to determine whether banks will resolve problems arising during my usage of the debit card timely and properly

3 To what extent do you agree with the following statements about uncertainty about the problems arising during the use of debit cards:

It is difficult to determine whether the coming transactions accept payment by debit card

It is difficult to determine whether debit cards are popularly accepted

I am not sure whether the POS system works properly at the time

I am not sure whether I bring debit cards whenever I need it

4 To what extent do you agree with the following statements about special time, effort, and assets that you need to take to use debit cards:

My bank has special regulations and procedures associated with the usage of debit cards that I have to comply with

I spend significant time and effort to learn and remember how to execute banking transactions with the debit card

Using debit cards requires me to have specialized financial and technical knowledge

I have to deposit a significant amount of money at my bank for using debit card services

5 To what extent do you agree with the following statements about time and efforts that you need to spend on monitoring money transferring transactions under the debit cards:

I spend a lot of effort checking the security during banking transactions via debit cards

I spend a lot of time and effort checking whether banking transactions are processed correctly

I spend a lot of time and effort checking whether banking transactions are recorded correctly

6 To what extent do you agree with the following statements about time and efforts that you need to spend on adapting with disturbance during the use of debit cards:

It takes time and effort to deal with problems arising when my debit card is lost

It takes time and effort to deal with problems arising when my banking transactions are mistaken

It takes time and effort to deal with problems arising when banking transactions cannot be processed when

It takes time and effort to deal with problems arising when my banking transactions are recorded wrongly

It takes time and effort to deal with problems arising when my debit card information is stolen

7 To what extent do you agree with the following statements about the benefits of using debit cards:

Using debit cards increases my chances of achieving things that are important to me

Using debit cards helps me accomplish things more quickly

Using debit cards increases my productivity

Using debit cards bring additional benefits to me

8 To what extent do you agree with the following statements about your habit of using cash

The use of cash has become a habit for me

I am addicted to using cash

Using cash has become natural to me

9 To what extent do you agree with the following statements about your willingness to use debit cards for making payment at points of purchase:

Very low Low Neutral High Very high

The probability that I would only use debit card for the coming transactions is

The likelihood that I would consider use debit card (instead of cash) for the coming transactions is

My willingness to use debit card instead of cash is

10 Please choose your gender Male

11 Please choose your age range 18 - 22

12 Please choose your education status: Primary

13 Please specify the name of a district in Hanoi city where you are currently living (you spend most of your time there):

14 Please choose your monthly disposal income: Less than 5 million VND

From 5 – less than 10 million VND

From 10 – less than 15 million VND

From 15 – less than 20 million VND

From 20 million VND and above

15 To what extent do you agree with the following statements about your ability to regulate your own emotion:

I am able to control my temper and handle difficulties rationally

I am quite capable of controlling my own emotions

I can always calm down quickly when I am terribly angry

I have good control of my own emotion

Nghiên cứu “Các yếu tố ảnh hưởng đến mức độ sẵn sàng sử dụng thẻ ghi nợ của chủ thẻ Việt Nam xét dưới góc độ chi phí giao dịch và lựa chọn hợp lý” do Ths Hoàng Phương Dung, nghiên cứu sinh trường Đại học Kinh tế Quốc dân thực hiện nhằm xem xét các yếu tố quyết định mức độ sẵn sàng sử dụng thẻ ghi nợ tại Việt Nam Câu trả lời của bạn sẽ được bảo mật và tổng hợp cùng câu trả lời của những người tham gia khác phục vụ nghiên cứu về chi phí và lợi ích của việc sử dụng thẻ ghi nợ và ảnh hưởng của chúng đến mức độ sẵn sàng sử dụng thẻ Kết quả nghiên cứu sẽ phục vụ các ngân hàng thương mại và các nhà hoạch định chính sách trong việc cải thiện chất lượng của các công cụ thanh toán cho chính các khách hàng như bạn.

Phiếu khảo sát này được chia thành các mục tương ứng về tần suất thực hiện giao dịch thanh toán, đánh giá chi phí và lợi ích liên quan đến việc sử dụng thẻ ghi nợ, thói quen sử dụng tiền mặt cũng như mức độ sẵn sàng sử dụng thẻ ghi nợ của bạn Một số câu hỏi cá nhân được đưa vào mục cuối cùng với mục đích kiểm tra tính đại diện của mẫu nghiên cứu và so sánh kết quả nghiên cứu giữa các nhóm nhân khẩu học Rất hi vọng bạn có thể hoàn thành tất cả các mục câu hỏi này Tôi cam kết dữ liệu của khảo sát sẽ không được sử dụng để xác định danh tính của bất kỳ cá nhân nào.

Phần 1: Thông tin chung về tần suất thực hiện giao dịch thanh toán

1 Trung bình, tần suất thực hiện thanh toán cho hàng hóa và dịch vụ tại điểm bán (cả bằng thẻ và tiền mặt) của bạn là: Ít hơn 1 lần mỗi ngày Khoảng 1-2 lần mỗi ngàyKhoảng 3-4 lần mỗi ngàyKhoảng 5-6 lần mỗi ngàyKhoảng 7 lần trở lên mỗi ngày

Phần 2: Đánh giá chi phí và lợi ích của việc sử dụng thẻ ghi nợ

2 Hãy đánh giá những nhận định dưới đây liên quan đến nỗi băn khoăn của bạn việc liệu ngân hàng có thực hiện đúng cam kết về chất lượng dịch vụ thẻ ghi nợ hay không:

Nhận định Hoàn toàn không đồng ý

Tôi không chắc liệu ngân hàng có đảm bảo an toàn cho số tiền tôi đã gửi hay không

Tôi không chắc liệu ngân hàng có đảm bảo tính bảo mật của thông tin thẻ ghi nợ không

Tôi không chắc liệu giao dịch qua thẻ ghi nợ có được thực hiện chính xác không

Tôi không chắc liệu giao dịch qua thẻ ghi nợ có thực hiện được bất cứ lúc nào tôi cần không

Tôi không chắc liệu thông tin các giao dịch qua thẻ ghi nợ có được lưu lại một cách chính xác không

Tôi không chắc liệu ngân hàng có giải quyết kịp thời và đầy đủ những sự cố trong quá trình sử dụng thẻ hay không

3 Hãy đánh giá những nhận định dưới đây liên quan đến nỗi băn khoăn của bạn về những vấn đề phát sinh trong quá trình sử dụng thẻ ghi nợ:

Nhận định Hoàn toàn không đồng ý

Bình thường Đồng ý Hoàn toàn đồng ý

Tôi không chắc liệu các giao dịch sắp tới có chấp nhận thanh toán bằng thẻ ghi nợ không

Khó mà xác định được liệu thanh toán bằng thẻ ghi nợ có được chấp nhận phổ biến không

Tôi không chắc máy cà thẻ hoạt động tốt tại thời điểm tôi thanh toán bằng thẻ ghi nợ tại điểm mua hàng

Tôi không chắc liệu tôi có mang theo thẻ ghi nợ bất cứ khi nào tôi cần không

4 Hãy đánh giá những nhận định dưới đây liên quan đến thời gian, công sức, tài sản đặc biệt mà bạn phải bỏ ra khi sử dụng thẻ ghi nợ nói chung:

Nhận định Hoàn toàn không đồng ý

Bình thường Đồng ý Hoàn toàn đồng ý

Ngân hàng có những quy định về kỹ thuật, quy trình đặc biệt trong sử dụng thẻ mà tôi phải tuân theo

Tôi phải mất nhiều thời gian công sức để học và nhớ cách thức sử dụng thẻ theo quy định của ngân hàng

Việc sử dụng thẻ ghi nợ đòi hỏi tôi phải có kiến thức về tài chính và kỹ thuật đặc biệt

Tôi phải gửi một khoản tiền không nhỏ vào ngân hàng để có thể sử dụng các dịch vụ thẻ ghi nợ

5 Hãy đánh giá những nhận định dưới đây liên quan đến thời gian và công sức bạn phải bỏ ra để quản lý quá trình thanh toán và tài khoản thẻ:

Nhận định Hoàn toàn không đồng ý

Bình thường Đồng ý Hoàn toàn đồng ý

Tôi mất nhiều thời gian, công sức cho việc kiểm tra nhằm đảm bảo an toàn khi tiến hành giao dịch qua thẻ ghi nợ

Tôi mất nhiều thời gian, công sức cho việc kiểm tra tính chính xác của giao dịch qua thẻ

Tôi mất nhiều thời gian công sức cho việc kiểm tra xem liệu thông tin các giao dịch qua thẻ của tôi có được ngân hàng lưu chính xác hay không

6 Hãy đánh giá những nhận định dưới đây liên quan đến chi phí về thời gian, công sức bạn phải bỏ ra để giải quyết các sự cố phát sinh trong quá trình sử dụng thẻ ghi nợ:

Nhận định Hoàn toàn không đồng ý

Bình thường Đồng ý Hoàn toàn đồng ý

Tôi phải mất nhiều thời gian và công sức để giải quyết khi bị mất thẻ

Tôi sẽ phải mất nhiều thời gian và công sức để giải quyết khi giao dịch qua thẻ bị sai (ví dụ, chuyển khoản nhầm)

Tôi sẽ phải mất nhiều thời gian và công sức để giải quyết khi giao dịch qua thẻ không thể thực hiện được khi tôi cần

Tôi phải mất nhiều thời gian và công sức để giải quyết khi thông tin giao dịch qua thẻ bị lưu sai

Tôi phải mất nhiều thời gian và công sức để giải quyết khi thông tin thẻ của tôi bị đánh cắp

7 Hãy đánh giá những nhận định dưới đây liên quan đến cảm nhận của bạn về tính hữu ích của thẻ ghi nợ:

Nhận định Hoàn toàn không đồng ý

Bình thường Đồng ý Hoàn toàn đồng ý

Sử dụng thẻ ghi nợ giúp tôi đạt được một số mục tiêu quan trọng

Sử dụng thẻ ghi nợ giúp tôi hoàn thành công việc nhanh chóng hơn

Sử dụng thẻ ghi nợ giúp tôi tăng hiệu quả trong công việc

Sử dụng thẻ ghi nợ cung cấp thêm một số lợi ích gia tăng cho tôi

8 Hãy đánh giá những nhận định dưới đây liên quan đến sở thích dùng tiền mặt của bạn:

Nhận định Hoàn toàn không đồng ý

Sử dụng tiền mặt đã trở thành thói quen đối với tôi

Tôi thích sử dụng tiền mặt

Tôi cần phải sử dụng tiền mặt

Tôi sử dụng tiền mặt mà không cần suy nghĩ nhiều về các phương tiện thanh toán khác

9 Hãy đánh giá mức độ sẵn sàng sử dụng thẻ ghi nợ của bạn:

Nhận định Rất thấp Thấp Bình thường Cao Rất cao

Khả năng tôi sẽ chỉ sử dụng thẻ ghi nợ trong các giao dịch sắp tới là…

Khả năng tôi sẽ cân nhắc việc sử dụng thẻ ghi nợ trong các giao dịch sắp tới (thay vì dùng tiền mặt) là…

Sự sẵn sàng chuyển sang sử dụng thẻ ghi nợ hoàn toàn thay cho tiền mặt của tôi là…

Phần 3: Thông tin cá nhân

10 Xin vui lòng cho biết giới tính của bạn: Nam

11 Xin vui lòng cho biết độ tuổi của bạn:

12 Xin vui lòng cho biết trình độ học vấn của bạn: Tiểu học

Trung học cơ sở/ Trung học phổ thông Đại học

13 Xin vui lòng cho biết tên quận/huyện ở Hà Nội mà bạn hiện đang lưu trú thường xuyên nhất: ….………

14 Xin vui lòng cho biết thu nhập khả dụng hàng tháng của bạn:

Từ 20 triệu VNĐ trở lên

15 Hãy đánh giá những nhận định dưới đây liên quan đến khả năng kiểm soát cảm xúc của bạn.:

Nhận định Hoàn toàn không đồng ý

Bình thường Đồng ý Hoàn toàn đồng ý

Tôi luôn bình tĩnh và xử lý những khó khăn một cách lý trí

Tôi có khả năng kiểm soát cảm xúc tốt

Tôi luôn trở về trạng thái cảm xúc cân bằng một cách nhanh chóng sau khi tức giận

Tôi kiềm chế cảm xúc tốt

Cảm ơn bạn đã tham gia khảo sát này !

Appendix 4: EFA results for assessing measurement scales

Appendix 4.1: KMO and Bartlett's Test

Initial Eigenvalues Extraction Sums of Squared

Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.837