The adoption of tradecard payment in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Luong Tung Bao Thesis The Adoption of TradeCard payment in Vietnam Supervisor: Prof. Nguyen Dong Phong November 2013 Page i Acknowledgement The process of writing this thesis is a challenging task and an insightful research. Without the love, the care, the full support and guidance from my professors and my friends, I may not reach the target and complete the journey successfully. First and foremost, I would like to express great gratitude to my thesis advisor, Dr. Nguyen Dong Phong for his help and guidance in conducting this research and thanks for his generous as well as his support during the time I study here. Special thanks to Dr. Dinh The Hoang for his dedicated guidelines in data analysis section. And further thanks go to the members of my thesis committee for their feedback, comments and encouragement. The thesis would not have achieved this quality without their assistance. Great thanks to my special friends in for their assistance in my life and my study. Special thanks to responders for their enthusiasm to help me collect the data and thanks to ISB friends for happy moments we spent together. Finally, I would like to give my deepest and greatest thanks to my family for their love and their encouragement. Thank to my Dad who always trust me, teach me to be more patient to achieve success in study and life; thank to my sweet Mom who always gives me tender cares and encourages my dreams and aspirations. Page ii Abstract “Vietnam continues to be one of the world’s fastest growing sourcing locales, particularly for footwear and apparel,” said Drew Dempsey, Vice President of Global Services, TradeCard Asia-Pacific in celebration of opening new offices in Vietnam in 2012. TradeCard is one of among electronics payment methods applied for over eight years in Vietnam, marking a significant development for society in general and in banking particularly. Besides that, more and more Vietnamese companies have started using TradeCard to support its business but it is still an unpopular concept for many Vietnamese people. It has not caught on with the banks customer in Vietnam. Thus, the main purpose of this study is to identify the adoption of TradeCard in Vietnam. The study starts with the bases on some theory models such as Technology Acceptance Model (TAM), and computer anxiety in performing TradeCard payment as a moderator to employ for the analysis TradeCard payment adoption, specifically for TradeCard in Vietnam. Data of the quantitative survey is gathered from Vietnamese users in two biggest cities Ha Noi and Ho Chi Minh, who have been using this payment method with a snow ball sampling method was used to sample the subjects. The results are expected to support the proposed hypotheses. They are expected to provide trading companies, bankers, and government with more information about the adoption of TradeCard in Vietnam. Limitations, discussions and suggestions will be explained the results in research and practice. Page iii Table of Contents Acknowledgement i Abstract ii Table of Contents iii List of tables vi List of figures vii Chapter I: Introduction 1 1.1 Background 1 1.2 Research Purpose, Objectives, and Research Questions 2 1.2.1 Research Structure 2 1.2 Scope and Limitations 2 Chapter II Literature Review 4 2.1 Definitions of Terms 4 2.1.1 Electronics Banking 4 2.1.2 Electronics Money 4 2.1.3 Electronics Payment 4 2.1.4 TradeCard payment 4 2.1.5 Electronics Payment Mean 4 2.2 Electronics Commerce Market and Electronics Payment Market in Vietnam 5 2.3 Theoretical Background of Technology Acceptance Model 6 2.3.1 Technology Acceptance Model (TAM) 6 2.4 Factors influencing the use of TradeCard and its relationship between Model Constructs 8 2.4.1 Perceived Ease of Use (PEU) 8 2.4.2 Perceived Usefulness (PU) 8 2.4.3 Perceived Risk (perceived risk in the context of online transaction (PRT) and perceived risk with product/service (PRP)) 9 2.4.4 Information on TradeCard payment (IF) 10 Page iv 2.4.5 Computer Anxiety (CA) 10 2.4.6 TradeCard payment Use (TPU) 11 2.4.7 The Relationship among Perceived Usefulness (PU), Perceived Ease of Use (PEU) and TradeCard payment Use (TPU) 12 2.4.8 Perceived Risk (PR) and TradeCard payment Use (TPU) 12 2.4.9 Information on TradeCard payment (IF) and Perceived Risk (PR) 13 2.4.10 Information on TradeCard payment (IF) and Trade Card payment Use (TPU) 14 2.4.11 Computer Anxiety (CA) on Trade Card payment Use (TPU) 14 2.5 Research Model 15 Chapter III Research Design 16 3.1 Research Questions and Associated Hypotheses 16 3.2 Subjects and Sampling 16 3.3 Instrument design 16 3.4 Expert Validity 19 3.5 Pilot Test and Face Validity 19 3.6 Quantitative Research 19 3.7 Data Analysis 20 Chapter IV Data Analysis 21 4.1 Data Collection 23 4.2 Descriptive Analysis 23 4.2.1 Respondents’ Demographics 24 4.2.2 Descriptive Statistics 25 4.3. The Validity and Reliability 28 4.4 Explanatory Factor Analysis 28 4.5 Regression Analysis 30 4.5.1 Information on TradeCard payment Predicting Perceived Risk with Product/Service 31 Page v 4.5.2 Information on TradeCard payment Predicting Perceived Risk in The Context of Online Transaction 32 4.5.3 Variables Predicting TradeCard Payment Use 33 4.5.4 Comparisons between Two City Groups in Regression Analysis 35 4.6 Path Analysis 36 4.6.1 Effective Estimation of Perceived of Use on TradeCard payment Use 37 4.6.2 Effective Estimation of Perceived Usefulness on TradeCard payment Use 38 4.6.3 Effective Estimation of Computer Anxiety on TradeCard payment Use38 4.6.4 Effective Estimation of Perceived Risk with Product/ Service on TradeCard payment Use 38 4.6.5 Effective Estimation of Information on TradeCard payment Use 38 Chapter V Results 41 5.1 Findings and Conclusions 41 5.1.1 What Significant Factors Affecting the Use of TradeCard payment in Vietnam 41 5.1.2 How Significant Factors Affect the Use of TradeCard payment in Vietnam 42 5.3 Managerial Implication 43 5.3.1 Perceived Ease of Use 43 5.3.2 Perceived Usefulness 43 5.3.3 Perceived Risk with Product/Service 44 5.3.4 Information on TradeCard Use 44 5.3.5 Computer Anxiety 45 5.4 Limitations and suggestion 46 References 47 APPENDIX A – QUESTIONARE (ENGLISH/VIETNAMESE) 49 APPENDIX B – PILOT TEST ANALYSIS 54 APPENDIX C – TEST OF ASSUMSION OF REGRESSION 56 Page vi List of Tables Table 3-1 Measure of research variables for designing questionnaire……………………… 17 Table 4-1 Response rate in Questionnaire Survey 23 Table 4-2 Response rate in Questionnaire Survey among professional groups 23 Table 4-3 Demographic Statistics with Frequency and Percentage 24 Table 4-4 Demographic Statistics with Frequency and Percentage 26 Table 4-5 Reliability of the Developed Questionnaire 28 Table 4-6 Principal Component Analysis of the Developed Questionnaire 29 Table 4-7 Correlation Coefficients among Independent Variables under Study 30 Table 4-8 Regression Analysis for Information on TradeCard payment Variables Predicting Perceived Risk in the Context of Online Transaction 31 Table 4-9 Regression Analysis for Information on TradeCard payment Variables Predicting Perceived risk with product/service 32 Table 4-10 Regression Analysis for Variables Predicting TradeCard payment use 33 Table 4-11 Hypothesis Test Summary of the Predictors Effect on Criteria 35 Table 4-12 Summary of the Regression Analysis for Separate City, Ha Noi and Ho Chi Minh 36 Table 4-13 Summary of Estimating Direct and Indirect 38 Table 5-1 Summary of Hypothesis 42 Page vii List of Figures Figure 2-1 Research Model 15 Figure 3-1. Research Flowchart 21 Figure 3-2. The Structure of the Method approach for this Research 22 Figure 4-1 Association of the Factors in Regression Analysis Model 34 Figure 4-2 Relationships in Path Analysis Model 37 Page 1 Chapter I: Introduction 1.1 Background The Internet has grown at a remarkable pace over years, while e-commerce has become important issues nowadays, especially for international trade, TradeCard payment has been becoming an indispensable payment trend in a modern society. However, the development banking system has largely been impacted by the dominance of cash in Vietnam. For many years, cash is still the “king” in Vietnam and most transactions are dominated by cash since the considerable personal consumption is done through the medium of cash up to now. For corporations in particular, this has resulted to problems of cost and delay, arising from the counting, bundling, transporting and depositing of large volumes of cash which has to be handled manually, as well as the risk and inconvenience in transactions with their fellow trader. The State Bank of Vietnam (SBV) made efforts in reducing the volume of cash payment transactions in the year 2006 by issuing non-cash-transaction project launched in 2006, and expect to finish this project on 2020 (SBV, 2008). The result is total liquidity composition in Vietnam changed significantly in a positive manner when the ratio of cash in total liquidity continued reducing to 14,6% in the year 2008 (as compared to that of 16,36% and 17,21% in 2007 and 2006 respectively) (SBV, 2008). Soon after joining WTO in the year 2004, many opportunities and threats for Vietnam economic in general and banking industry are brought up for enterprises. Vietnam has to change payment transaction behaviors to adapt the inevitable trend in the world. Recent years, many new models of business have been appeared such as e-commerce, e-business, thus, IT has to be equipped in banking system to enhance their quality of services in satisfying customer’s expectation. Since almost banks offer same services, the application of new technology in bank becomes the determinant factors deciding the success of bank in compete customer’s belief in long term resulted to many kinds of modern banking applications are now applied in Vietnamese bank. The State Bank of Vietnam has made efforts in reducing the volume of cash payment transactions by issuing non-cash-transaction project in 2006 throughout 2020. Besides, banks alliances are formed and developed quickly, TradeCard payment forms are more diversified as a standard payment term for international trading. Thereby it is time to enhance customer awareness and disseminate the TradeCard payment system in society. Page 2 There have been some previous research on e-commerce and e-banking before, but they only focus on developed countries with the advantage in IT technology. For example, researches on the adoption internet banking in European, North America, and Finland the leading countries in online banking technology and usage. Later other researchers extent in other regions including a mix of developed and developing countries are Singapore (Tan &Teo, 2000), Hong Kong (Chan & Lu, 2004; Ho & Ng, 1994). Despite a few works are done to address the electronics payment (Ho & Ng, 1994; Plouffe, Hulland & Vandenbosch, 2001), however, authors just focus on developed countries with advantage in IT knowledge. Therefore, this research will analyze the TradeCard payment in Vietnam, which is known as a developing country. Differently, this study focuses on TradeCard payment which is a typical TradeCard payment of e-commerce and e-transactions in a developing country in which IT and e-banking systems are still young. 1.2 Research Purpose, Objectives, and Research Questions The main purpose of this study is to identify adoption of TradeCard payment in Vietnam through factors influencing directly to its payment process for a developing country case as well as how the factors influencing the adoption of TradeCard payment in Vietnam. The study hopes to bring general knowledge about electronics payment transaction to Vietnamese customers by clarifying which factors are essential and critical for TradeCard payment use. Factors influencing the adoption of TradeCard payment may be the foundation of related organizations that can help them can propose programs in order to approach and serve the customers effectively. This study aims to examine the factors influencing the adoption of TradeCard payment with the these specific objectives identified as following 1. To identify significant factors that influence customer’s adoption of TradeCard payment. The corresponding research question developed was: Q1 What are main factors influencing adoption of TradeCard in Vietnam? 2. To explore how the factors affect customer’s adoption of TradeCard payment in Vietnam. The corresponding research question developed was: Q2 How do the factors influencing adoption of TradeCard in Vietnam? 1.2.1 Research Structure This research is organized into 5 chapters (ch.1) Introduction is to provide general introduction of the research, (ch.2) Literature review is a brief review of the literature on [...]... important of the economy A wellpayment functioning system is necessary not only to facilitate the smooth operation and stability of the payment system, but also to ensure the effectiveness of monetary policy TradeCard payment is a subset of structure of the the overall payment system There are several definitions about e -payment in which TradeCard payment is defined as payments made via the clearing automated... to use the TradeCard payment 4 I find TradeCard payment to be flexible to interact with 5 My interaction with TradeCard payment is clear and understandable 6 Overall, I find TradeCard payment easy to use B Perceived Usefulness 7 Using TradeCard payment improve performance of utilizing banking service Page 17 8 Using TradeCard payment enhances effectiveness of utilizing banking service Pikkarainen (2004);... the modified questionnaire was continuously passed to the forty users for secondarily judged and validated on the items of the self-administered questionnaire The requirement of judging and validating were: reading/reviewing the instructions and questions; answering the questions and providing your answers; correcting or commenting directly in the nearby space of this instrument, not only the wording,... supplies TradeCard payment forms, the disadvantages advantages of TradeCard payment, information about the feature, benefits or operation of the systems, and even information involved in the amount of customers trust in using this system and so on TradeCard payment is a special service because it offers a virtual and sensitive service involved in and new technology The concept information also refers to information... assessment of information on a new related system, it is found that respondents had less interested of general information once using e-banking services in finding specifics information related The prevailing in general attitude among respondents was that they did not appreciate banking information being pushed on them Additionally, respondents were in difference of financial information during the survey... of the implication of study followed by presenting limitations and future research recommendation 1.3 Scope and Limitations This study aims to research the adoption of TradeCard payment in Vietnam by examining factors affecting to the tendency use of TradeCard in Vietnam Electronics payment is a broad field but according to the specific of the context of this study, questionnaires of this study will... that a TradeCard payment transaction often involves a payment channel and multi-parties, which includes payment intermediaries Payment intermediaries are those involved in payment authorization, payment clearing and settlements (Department of Communications, Australian Government 2006) Usage of electronic payment is indicated as attitude toward, which is referred to the feeling of behavior being influenced... processing through e -payment, customers often perceive that there is a high level of risk even though the risk level is maybe low (Agarwal & Parasad, 1999) Hence, it may lead them seeking more information to ascertain the level of risk, mitigate the perception of risk or manage the perceived risk The more experience on Page 13 using the system, the more information they get, and therefore they perceive the. .. wherever there is inappropriate; and providing any relevant comments (if yes) The result of pilot test is shown on appendix B 3.6 Quantitative Research Firstly, like many other research, the research was began with the determination of the actual situation The actual situation determined in this research comes from the problems are performing of TradeCard payment in the two biggest cities in Vietnam and then,... 2001; Wang et al., 2003) Page 9 In the scope of this research, the adoption concept of Park and his assistants, in which perceived risk consists of perceived risk in the context of online transaction (PRT) and perceived risk with product/service (PRP) which is to explain TradeCard payment adoption by Vietnamese people wholly They define perceived risk in the context of online transaction (PRT) as a possible . of TradeCard payment in Vietnam through factors influencing directly to its payment process for a developing country case as well as how the factors influencing the adoption of TradeCard payment. affect customer’s adoption of TradeCard payment in Vietnam. The corresponding research question developed was: Q2 How do the factors influencing adoption of TradeCard in Vietnam? 1.2.1 Research. ensure the effectiveness of monetary policy. TradeCard payment is a subset of structure of the the overall payment system. There are several definitions about e -payment in which TradeCard payment