Study on mobile payment adoption in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY DAO MANH TAN STUDY ON MOBILE PAYMENT ADOPTION IN VIETNAM MASTER’S THESIS BUSINESS ADMINISTRATION Hanoi, 2019 VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY DAO MANH TAN STUDY ON MOBILE PAYMENT ADOPTION IN VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: 60340102 RESEARCH SUPERVISORS: ASSOC PROF NGUYEN VAN DINH PROF MOTONARI TANABU Hanoi, 2019 DECLARATION OF ACCEPTANCE I declare that this master thesis has been conducted solely by myself This master thesis has not been submitted in any previous articles or application for a degree, in whole or in apart The work contained herein is my own except where stated otherwise by reference or acknowledgment ACKNOWLEDGMENTS I would first thank both advisors Prof Tanabu of Graduate School of International Social Science – Yokohama National University I would like to express my gratitude to professor Tanabu for all the useful comments and engagement through the chain of seminars in YNU Furthermore, I would like to thank Assoc Prof Nguyen Van Dinh of Vietnam National University for wise advised and steered me in the right direction whenever I need in conducting this research I would like to express my sincere thanks for all of the VJU –MBA02 class for their kind support and advised Next, I would like to thank my survey’s participant who shared their time and precious idea Finally, I would like to express my gratitude to my parents to support me unfailing and continuous encouragement throughout my study and writing this thesis This accomplishment would not have been possible without them ABSTRACT In Vietnam “The number of e-payments grew 22% in 2017 from the previous year to $6.14 billion, according to Statista, a local market research firm The figure is projected to double to $12.33 billion in 2022” (TOMIYAMA, 2018) State-owned gas station operator Petro Vietnam Oil introduced a mobile payment system in February, while MService, a major fin-tech company, plans to increase the number of subscribers to its MoMo online payment service to 50 million by 2020 from about five million today The research focuses on objectives: To find the factors that affect the customer in selecting the mobile-payment application in Vietnam, the relationship between those factors and propose suggestions and solutions for mobile-payment application providers to attract more customers as well as improve business efficiencies The research constructs and develop on the ground of UTAUT theory with revised of Facilitating Factor, Trust factor and changes an independent variable The research using Likert –scales levels for observation variables: Performance expectancy, social influence, effort expectancy Trust and one dependent variable Behavior Intention The research using a frequency- scale levels for one independent variable: E-commerce Use Behavior and one dependent variable: Use behavior Among hypotheses, were not rejected and was rejected The research also provided the multiple linear regression equation and binomial logistic regression equation of computing variable value Therefore, predicting the mobile payment usage behavior of frequency at 75.85% accuracies TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1.1 Practical Motivation 1.1.2 Theoretical Motivation CHAPTER 2: LITERATURE REVIEW 2.1.1 Theory of Reasoned Action (TRA) 2.1.2 Theory of Planned Behavior (TPB) 2.1.3 Theory of Technology Acceptance Model (TAM) 2.1.4 The Unified Theory Of Acceptance And Use Of Technology (UTAUT) 2.3.1 Performance Expectancy 14 2.3.2 Effort Expectancy 15 2.3.3 Social Influence 16 2.3.4 Trust 17 2.3.5 Behavioral Intention 18 2.3.6 E-Commerce Behavior Intensive 19 2.3.7 Use Behavior 20 CHAPTER 3: RESEARCH METHODOLOGY 22 3.2.1 Research Scale 23 3.2.2 Example method and data collection 23 3.2.3 Data Analysis Method 24 CHAPTER 4: RESEARCH FINDINGS 26 4.4.1 Exploratory Factor Analysis (EFA) 30 4.6.1 Block 0: Beginning Block 35 4.6.2 Block 1: Method = Enter 35 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 39 REFERENCES 42 APPENDIX 45 QUESTIONAIRES 53 LIST OF TABLE Table 2.1 Performance expectancy scale 15 Table 2.2 Effort expectancy scale 16 Table 2.3 Social influence scale 17 Table 2.4 trust scale 18 Table 2.5 behavioral intention scale 19 Table 2.6 ecommerce behavior scale 20 Table 3.1 Research process 22 Table 4.1 item total statistics of trust variable - original 28 Table 4.2 item total statistics of trust variable after deleted tr6 29 Table 4.3 cronbach's alpha 29 Table 4.4 Component analysis 30 Table 5.1 item total statistics of effort expectancy variable 45 Table 5.2 item total statistics of social influence variable 45 Table 5.3 item total statistics of behavioral variable 46 Table 5.4 item statistic of use behavior variable 46 LIST OF FIGURE Figure 2-1 Theory of reasoned action Figure 2-2 Theory Of Planned Behavior Figure 2-3 UTAUT model 10 Figure 2-4 Revised UTAUT model with trust and E-commerce Behavior Intensive 12 Figure 4-1 Revised Research Model 37 CHAPTER 1: INTRODUCTION 1.1 Research motivation 1.1.1 Practical Motivation In the Asia region and ASEAN region: The movement of banking system along with a big leap of personal smartphone devices rate in ASEAN According to Nikkei Asian Review " In Indonesia, Digi bank drew about 600,000 users over the past year "In the next five years, we want to book around 3.5 million customers," said Wawan Salum, managing director of the consumer banking group at PT Bank DBS Indonesia (NAKANO, 2018) “Alibaba's core mobile payment service, Alipay, had more than 520 million users just in China at the end of 2017 The introduction of the service to Alibaba's Taobao.com shopping website the largest e-commerce platform in China -propelled a shift to cashless shopping in the country, including for small eaterie and shops Ant Financial works with CIMB Group Holdings, a bank in Malaysia, as well as Indonesian conglomerate Emtek Alibaba first offered electronic payment to the rising ranks of Chinese tourists to Southeast Asia Building on its experience in China, it seeks to become a major force in mobile payments in the region as well” (MARIMI KISHIMOTO) World Bank estimates that “the spread of smartphones has granted youth tools to easily fulfill bank transactions Only 20% of adult Indonesians held accounts in 2011, but the share has risen to 49% last year” and “Globally, about 1.7 billion adults have neither opened an account nor transferred money with a mobile phone, the World Bank estimates However, two-thirds of unbanked adults have mobile phones That shows digital banking could be ripe for an explosion in places like the Philippines and Vietnam.” (NAKANO, 2018) Alibaba's Ant Financial owns about 20% of True Money’s operator, which aims to expand its network 10-fold from the current level to 100,000 locations by the end of this year Users can charge their accounts at 7-Eleven convenience stores, which are operated by the Charoen Pokphand group in Thailand or link them to a credit card or bank account The vast customer base of the Charoen Pokphand group including visitors to the more than 10,000 7-Eleven stores in the country and the 27 million subscribers of telecom company True is an asset for True Money The next frontier on the radar is cafes and fast-food chains, including Kentucky Fried Chicken True Money aims to overtake Rabbit Line Pay, the market-leading service from Japanese messaging app provider Line and elevated train operator BTS Group Holdings About 60% of Thailand's population uses the Line chat app, with users of the mobile payment service now numbering roughly million (MARIMI KISHIMOTO) “The connected service has been approved for use across Singapore and Thailand, where it is scheduled for launch in mid-2018 SingTel said in a news release that it would be available to over 1.5 million people traveling between the two countries at more than 20,000 retail outlets It will then be rolled out progressively to other affiliated companies including Advanced Info Service, Bharti Airtel, Telkomsel and Globe Telecom from the second half of 2018 Mobile payment systems are becoming increasingly popular with Asian consumers Over 77% of people in the Asia-Pacific region with internet access said made their most recent online purchase using a mobile, in a survey by market research agency Kantar TNS In Indonesia, the figure was as high as 93%” (LEE, 2018) Mobile payment application has risen in the last 20 years from PayPal to Alipay and Momo Mobile payment application changed the behavior of people using paper currency In years, paperless money evolution in China worth 5.5 trillion USD (50 times the US market) E-Commerce included angles of iron triangles: e-commerce platform, logistics and mobile payment application (Alibaba: The House That Jack Ma Built by Duncan Clark) According to Mr Sean Preston – director of Visa Vietnam “60% of Vietnamese smartphone users using mobile – e-commerce shopping app” Therefore, underneath the trend of e-commerce in Vietnam are logistics and mobile payment In Vietnam region: “The number of e-payments grew 22% in 2017 from the previous year to $6.14 billion, according to Statista, a local market research firm The figure is projected to double to $12.33 billion in 2022” (TOMIYAMA, 2018) State-owned gas station operator Petro Vietnam Oil introduced a mobile payment system in February, while M-Service, a major fin-tech company, plans to increase the number of subscribers to its MoMo online payment service to 50 million by 2020 from about five million today Zalo Pay terminals will first be available mainly at convenience stores and electronics shops The service allows users to deposit money and pay for online transactions and utility bills It can also be used to transfer money from bank accounts and handle remittances using QR codes Zalo Pay will be VNG's strategic product and play an important role in Vietnam's e-commerce market, said Pham Thong, business development director for the service The potential for Zalo Pay is huge due to the company's Zalo messaging app, which already has 70 million users.” The trend of mobile payment and QR payment transformation for Mobile Banking app is at the peak of user acquisition Therefore, the key success for expansion and mobile payment adoption are in need of discovery Last year, Alipay signed an agreement with Napas to connect the systems Vietnamese market soon follows the trend by entering of dozen player from Asia, Japan, and investment from domestic as well as an international financial institution One important question is why a customer chooses a mobile payment application instead of other dozens The research could provide some answer to how and why the Vietnamese customer selects the mobile payment application 1.1.2 Theoretical Motivation Venkatesh, V (2000) Why don't men ever stop to ask for directions? Gender, social influence and their role in technology acceptance and useage behavior MIS Quarterly 24, pp 115-139 Venkatesh, V M (2004) Individual reactions to new technologies in the workplace: The role of gender as as psychological construct Journal of applied social psychology, pp 445-467 44 APPENDIX Table 0.1 item total statistics of effort expectancy variable Table 0.2 item total statistics of social influence variable 45 Table 0.3 item total statistics of behavioral variable Table 0.4 item statistic of use behavior variable st Linear Regression time Descriptive Statistics BI PE EE SI TR ( nonTR6) Correlations Pearson Correlation 46 Sig (1-tailed) N Variables Entered/Removed Mo del a Variables Entered TR ( no PE, a Dependent Variable: BI b All requested variables entered Mo del R a Predictors: (Constant), TR ( nonTR6), PE, SI, EE b Dependent Variable: BI 47 a 756 Model Regression Residual Total a Dependent Variable: BI b Predictors: (Constant), TR ( nonTR6), PE, SI, EE Model (Constant) PE EE SI TR ( nonTR6) a Dependent Variable: BI Mo del Dimensi on a Dependent Variable: BI Residuals Statistics a 48 Predicted Value Residual Std Predicted Value Std Residual a Dependent Variable: BI Linear regression nd time Descriptive Statistics BI PE E E SI Correlations Pearson Correlation Sig (1-tailed) N 49 Mo del b PE a Dependent Variable: BI b All requested variables entered Mo del a Predictors: (Constant), SI, EE, PE b Dependent Variable: BI Model on a Dependent Variable: BI b Predictors: (Constant), SI, EE, PE Model (Constant) PE 50 EE SI Model Correlati ons Covarian ces a Dependent Variable: BI Mo del ion a Dependent Variable: BI Residuals Statistics Predicted Value Residual Std Predicted Value Std Residual a Dependent Variable: BI 51 a Logistic Regression Correlation Matrix Step Constant BI EB QUESTIONAIRES Part I: Occupation     Student Employee Entrepreneur Unemployment Your gender    Male Female Other Your ages      Under 18 18–22 23–35 35–52 Over 52 Living location    Northern part of Vietnam Middle part of Vietnam Southern part of Vietnam Monthly income      None Under million vnd -12 million vnd 13 -20 million vnd Over 20 million vnd 53 Your highest education     None High school graduate Bachelor’s Degree Master’s Degree or Higher Marriage status    Single Married Divorce/ Widow Part II: The survey focus on persons who using mobile payment which could be one among kinds: - Mobile Banking app with payment function such as QR scan: BIDV, Techcombank, Vietcombank, TPbank, Agribank,… - Mobile wallet app: Momo, Viettel Pay, Zalo pay, Payoo, Moca,… - Mobile payment app issued by bank: VCBpay, TPbank Quickpay,… Please choose to what extent you agree with following statements: (1) Strongly Disagree (2) Disagree (3) Neutral (4) Agree (5) Strongly Agree N S o I find Mobile Payment useful in my 1daily life Using Mobile Payment increases my chances of achieving tasks that are 2important to me Using Mobile Payment helps me 3accomplish tasks more quickly 54 Using Mobile Payment increases my 4productivity Learning how to use Mobile Payment 5is easy for me My interaction with Mobile Payment 6is clear and understandable I find Mobile Payment easy to use It is easy for me to become skilful at using Mobile Payment People who are important to me think 9that I should use Mobile Payment People who influence my behaviour think that I should use Mobile Payment People whose opinions that I value prefer that I use Mobile Payment I believe that Mobile Payment is trustworthy I not doubt the honesty of Mobile Payment I feel assured that legal and technological structures adequately 1protect me from problems on Mobile Payment Even if not monitored, I would trust Mobile Payment to the job right Mobile Payment has the ability to fulfil its task I intend to use Mobile Payment in the future I will always try to use Mobile Payment in my daily life I plan to use Mobile Payment in future I predict I would use Mobile Payment in the future 55 I trust in Mobile Payment Part III: Please choose to the appropriate frequency of use as statement below: (0) Less than once a month(1) Monthly(2) Weekly Statement o 2 I am frequently using mobile e-commerce app I am frequently using the mobile payment function on the mobile banking app I am frequently using the mobile wallet app I am frequently using the mobile payment app issued by the bank 56 ... influence not only on the customer’s intention but also on performance expectancy In his study to examine the factor predicting customers’ initial trust in Mobile banking, Zhou (2011) also confirmed... disruptive innovation and adoption in the near future, in Vietnam In order to conclude the research, three questions which are rose from start of study Factors affect customer in selecting mobile- payment. . .VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY DAO MANH TAN STUDY ON MOBILE PAYMENT ADOPTION IN VIETNAM MAJOR: BUSINESS ADMINISTRATION CODE: 60340102 RESEARCH