ITS 15th Biennial Conference
Mobile Payment Adoption in KOREA:
Switching From Credit Card
Je Ho Cheong
Myeong-Cheol Park
Information and Communications University
Contents
Introduction
Literature review and study Model
Research methodology
Study outcome
Conclusions and contribution
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Introduction
(1/2)
Motivation



What makes M-payment particularly interesting is that the payment
services for any retail purchases may well be provided by mobile
operators and not by the established banking systems.
That is, M-payment provides the mobile operators an opportunity to
extend their business operation to financial service area and take some
of the shares that could otherwise remain with existing players such as
banks and financial institutions.
Nevertheless, it is still obscure whether M-payment can be successfully
deployed and practiced in the market.
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Introduction
(2/2)
Purpose of this study


To identify
 Human motivations underlying individual behavioral intention to use
M-payment
 The factors that make people difficult to switching from credit card to
M-payment
Question
 Role of switching barrier in TAM (Technology Acceptance Model)
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The Literature review and Study Model(1/5)
TAM (Technology Acceptance Model : Davis(1989)
Perceived
Usefulness
Attitude
Intention to Use
Actual Usage
Perceived
Easy of Use
 This model adopts well established causal chain of “beliefs 
attitude  intention  actual behavior”
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The Literature review and Study Model(2/5)
The role of switching barrier [1/2]

Definition
 Economical, social and psychological cost that make customers’
defection difficult (Jones et al., 2000)
 Classified into three groups: Attractiveness of alternatives,
Interpersonal relationship, Perceived switching cost
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The Literature review and Study Model(3/5)
The role of switching barrier [2/2]



Attractiveness of alternative (Credit card)
 Reputation, image and service quality of viable competing
alternative available in the market place
Interpersonal relationship (with Credit card company)
 Strength of personal bonds that develop between customers and
their service provider
Perceived Switching Cost (from credit card to M-payment)
 The degree to which an individual believes that switching a service
provider would incur certain cost to him/her.
 Grouped into three categories: continuity cost, sunk cost, and
learning cost (Jones et al., 2000).
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The Literature review and Study Model(4/5)
The role of facilitating condition [1/2]

Definition
 Perceived accessibility to the service network where M-payment
service is available.
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The Literature review and Study Model(5/5)
Study model
Perceived
Facilitating
Condition
Continuous
Cost
Perceived
Usefulness
Move-in Cost
Attitude
Toward
M-payment
Behavioral
Intention
to use
M-payment
Sunk Cost
Perceived
Easy of Use
Attractiveness
of Alternative
Interpersonal
Relationship
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Study Methodology
Subjects

Online Survey :1069 replies and 35 discarded 1034 replies used




Gender
 264 : female
770 : male
Age
 20~29 : 229(22.1%), 30~39 : 602(58.2%), 40~49 : 169 (16.3%),
50~59 : 26 (2.5%) 60~69 : 9(0.9%)

Education level
 10 : no high-school diploma, 311 : high-school diploma,
193 : college diploma, 463 : bachelor degree, 57 higher than
bachelor degree.
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Study Methodology
Methodology


SEM (Structured Equation Model) + CFA (Confirmatory Factor Analysis)
Procedure
 Reliability and Validity of measurement instruments
 Internal Consistency : Cronbach’s alpha
 Validity of measurement instruments: Factor Loading above 0.6
 Reliability : Composite reliability and Variance Extracted
 Overall and Structural equation model fit
 Absolute fit measures :
Normed Chi-square, GFI, AGFI,
RMSR, RMSEA
 Incremental fit measures : NNFI, NFI, CFA
 Hypotheses test
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Study Outcome
0.514 ***
Perceived
Facilitating
Condition
0.111 **
Perceived
Usefulness
Continuous
Cost
-0.005 NS
(0.265)
Move-in Cost
0.073 *
0.284 ***
0.405 ***
0.264 ***
0.176 ***
Perceived
Easy of Use
Attitude
Toward
M-payment
(0.523)
-0.05 NS
Attractiveness
of Alternative
Path Significance :
*** p <0.001
** p <0.01
* p <0.05
ns : non-significant
0.388 ***
Behavioral
Intention
to use
M-payment
-0. 350 ***
-0.007 NS
(0.551)
Sunk Cost
-0.174 ***
-0.014 NS
Interpersonal
Relationship
Variance explained in parenthesis
Model goodnessgoodness-ofof-fit
Chi-square = 1665(df =481)
Normed Chi-square = 3.463
GFI = 0.908
AGFI = 0.893
NFI = 0.944
NNFI = 0.955
RFI =0.938
CFI = 0.959
RMSR = 0.157 RMSEA=0.049
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Implication and Contribution
Implication

Conceptualization of the facilitating condition is important and useful
predictor of behavioral intention especially in the industry where service
network is crucial in delivering the service .

Loyalty toward credit card companies is not high enough to keep people
in service
 By leveraging enormous customer base, substantial market share
can be captured

Move-in cost of joining M-payment network and purchasing the mobile
device makes mobile subscribers difficult to adopt M-payment
Contribution

Conventional TAM does not consider the competition between services
and switching barrier of customers

In this regards, the concept of switching barrier and the facilitating
condition may help better understanding the intention to accept new
service.
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Thank you for listening !
[email protected]
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