3 ISSN : 2349-7165

Factors Influencing Consumer’s Intention to Use E-payment

System: An Empirical Study
Meenal Agrawal
Research Scholar
P.M.B. Gujarati Commerce College, Indore
meenalgarg7587@[Link]
Alok Bansal
Professor
Prestige Institute of Management and Research, Indore
alok_bansal@[Link]

ABSTRACT

In the recent years, electronic commerce (e-commerce) has growing rapidly. E-commerce became an
opportunity for companies to increase their selling. E-commerce provides the capability of buying and
selling products, information and services on the Internet and on other online environments. In an e-
commerce surrounding, payments made in an electronic form, and are therefore called Electronic Payment.
Electronic payment is a division of an e-commerce transaction to include e-payment for buying and selling of
goods or services accessible through the internet. With the rapid growth of technology, the process to make
electronic transactions are continuously increasing while the percentage of cash and cheques transactions
continuously decreasing. Thus, the main objective of this paper is to explore the factors which influence
consumer’s intention to use e-payment system for various purposes. Using principal component method of
exploratory factor analysis, four factors viz. Perceived Usefulness, Perceived Social Esteem, Perceived
Security and Perceived Reliability are identified that are affecting consumer’s intention. The research is
mainly focused on primary data which were collected from e-commerce users through well structured
questionnaire. The outcomes of this study are helpful to the users of e-payment system, researchers who will
be working in this field and companies planning to adopt or to improve their electronic payment system.
Keywords– E-Payment System, Usefulness, Social Esteem, Security and Reliability

INTRODUCTION
Information &communication technology (ICT) revolution has developed the electronic commerce which
has also formed new financial needs. Many cases related to financial needs cannot be fulfilled through the
traditional payment system efficiently and effectively. The revolution of ICT is given opportunity to the users
for the various types of electronic services like e-banking, e-registration, e-transaction, e-shopping, e-
payment, e-learning, e-library, etc. The current study focuses only on electronic payment. Electronic
payment is considered as a part of electronic commerce transaction that includes electronic payment for
purchasing or selling of different types of goods or services offered on the Internet. In other words, it is a
payment system in which monetary value is transferred electronically between two entities as compensation
or consideration for the receipt of goods or services regardless of time and location. In the given definition
entity refers to a business, banks, government or an individual consumer.
Moreover, the payment is made from distance, without the physical presence of the payer and it does not
include cash. E-payment system uses secure electronic transactions between organizations and individuals.
E-payment systems are not introduced to replace cash but as a better option to cash and barter trade. Despite
of many advantages of e-payment system many of the users are not adopting or using it for their payments.
Fear of failure and lack of knowledge is the main reason behind not adopting e-payment by the users. At the
same time those who are using the e-payment system for making payments must also required to aware about
the proper use of this technology. Their ignorance or lack of awareness directly associated with the financial
risk they have in using this technology of payment system. Therefore the present study is undertaken to
explore the factors that influence consumers’intention to use electronic payment system.

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REVIEW OF LITERATURE
Singh (2009) showed that although the existence of variety of e-commerce payment systems, credit cards
were the most dominant payment system. Secondly, alternative e-commerce payment systems in some
countries are debit cards. In fact many studies recognised that smart card based e-payment system is expected
to replace the other electronic payment systems. With the inadequate number of users electronic cash is not a
practical option for payment. Thus, one can understand that there were various factors which affect the usage
of e-payment systems. Success of e-commerce payment systems depends on many factors like consumer
preferences, ease of use, cost, industry agreement, authorization, security, authentication, non-refundability,
accessibility, reliability, anonymity and public policy.
Moertini et al. (2011) explored the detailed methods that proposed specifically to develop suitable electronic
payment system to handle operations in the universities of Indonesia. The methods which were proposed to
develop the suitable electronic payment system were bank partners and payment product selection criteria,
university policies and regulations, system architecture, data exchange between systems and interaction
between virtual account system and university payment system. In order to generalize the methods, larger
scope of research is needed. It is also important find out new or enhanced methods to address the main issues
in electronic payment systems like efficiency, security, convenience, etc.
Khalili et al. (2012) explored that when companies entered into electronic commerce market then choosing an
electronic payment system that will work well with the way they run their business that is both popular and
safe system. Their research identified major criteria and current situation of e-payment systems in Iran and
indicated that debit card was the most preferred e-payment system, followed by credit card and electronic
check. Rachna & Singh (2013) analysed and found that it is not possible to say which mode of payment is
perfect, although each one of them has advantages as opposed to others. The study revealed that if the client
wants to maintain privacy, then they choose payment methods which guarantee a higher level of privacy such
as E-cash or Net Bill Checks, but if the priority is security, they choose smart cards. They found that both
consumers and service providers can benefit from e-payment systems leading to increase national
competitiveness in the long run.
Yaqub et al. (2013) examined the challenges of implementing cashless policy in Nigeria. They found out that
irrespect of various benefits of cashless policy, it also has its own issues and challenges. They found out the
challenges namely; security, infrastructure, legal & regulatory issues, and socio-cultural issues. It was also
found that most people in the Nigeriawere not aware of the advantages of e-payments and therefore they were
very slow to adopt it. Therefore, there is a need to make more alertness to attract the people into the banking
system as large part of the Nigerian population is unbanked and if the people will going cashless then it will
automatically acquire large number of people into the banking system.
Hamid & Cheng (2013) found that there was major variations among the tertiary students’ with respect to
perceived risks of types of payment i.e. cash and electronic payments. However, the young adult users were
indifferent in perceived risks linked with number of purchases. In an online and technology based self-service
environment, the degree of perceived risk is associated with perceived security of the platform as well
reliability of a firm of which a consumer performs a transaction. They also came-up with implications to
service providers and policy makers to improve the e-payment systems quality.
Oyewole al. (2013) explained the connection between e-payment system and economic growth to cashless
economy in Nigeria. The study indicated that e-payment system was completely contribute to economic
growth in terms of GDP and trade. The results showed that only ATMs contributed positively to economic
growth while other e-payment channels contributed negatively to the economic growth. According to them a
important positive relationship found between e-payment system and economic growth in Nigeria.
Teoh al. (2013) examined the dimensions which influenced Malaysian consumers’ attitude toward the usage
of e-payment. The results showed the growth of e-payment services in Malaysia and showed the three factors,
i.e. benefits, self-efficacy, and ease of use were associated with consumers’ attitude toward [Link]
security and trust were not significantly associated with consumers’ intention towards electronic payment.
The authors recommended that Banks of Malaysia and online transaction facility providers should
continually enhance their e-payment services in respect of the challenging growth rate and it is essential that
the services provided must meet consumers’expectations.

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Jansorn et. al (2013) revealed that Performance Expectancy, Effort Expectancy, Social Expectancy and
Facilitating Conditions are the main factors affect adoption of electronic payment among actual users in
Thailand. Furthermore, service providers of E-Paymentsystemsmust try to increase convenience, rapidity,
and facilitation in today’s people daily life. Aggarwal (2014) revealed that the growth of e-commerce and
online shopping is increasing at very rapid speed especially in the country like India where people from
nuclear families prefer online shopping because of shortage of time. Also the trend of online shopping is
increasing in customers, where they sit in front of a computer and order the goods and services at anywhere
and anytime. The trend of e-commerce and e-payment increases because customers preferred e-payment for
other utility services also which helps to give some additional advantages and also save their valuable time.
Subramanian (2014) noted the gaps in the bill payments eco-system for lack of inter-operability, high cost of
cash, cheque/draft collection and poor accessibility in semi-urban and rural areas. He suggested
implementing efficient innovative paper free electronic payment and settlement systems that form the
backbone of economic well being of the nation. In addition, the study also revealed that simplifying
documentation requirements, increasing role of non-banks in the payment systems, innovation and
competition, uniformity, addressing risks could facilitate more usage of the efficient paper free payment
systems.
Roy & Sinha (2014)discussed a practical review of e-payment acceptance in Kolkata. They worked on factors
like Perceived Ease of Use (PEOU), Perceived Usefulness (PU), Perceived Credibility (PC), Perceived Risk
(PR) and Customer Attitude (CA) that affect e-payment acceptance. They revealed that among the factors,
Perceived Ease of Use is found to be the most significant predictor. Conversely, the study explored that
customer attitude was found to have least significant effect on adoption of E-payment. The author said that
from the findings it was clear that customer have to use more online payment system. The more customers use
the latest technology more it will be friendlier with them. The study showed that E-payment system has
shown remarkable growth in India, but still it is an ongoing process to increase its usage because still 90% of
the transactions were based on cash. So, there is a necessity to broaden the scope of electronic payments. The
study also showed that innovation, incentive, customer convenience and legal framework are the four factors
contributed to build up the electronic payment system.
Tella & Abdulmumin (2015) found that the users were satisfied for the payment of salaries with the help of e-
payment system at the University of Ilorin. Therefore, the situation of not knowing whether the users are
satisfied with the e-payment system or not has now being fulfilled. Moreover, the study showed that the six
factors identified in the study was considered as good determinant of e-payment system. The six factors were
perceived security, perceived speed, ease of payment, convenience, anonymity and traceability.
Kaur & Pathak (2015) critically analysed and compared the various types of electronic payment systems, it is
somewhat difficult to recommend that which payment system is best. They revealed that few payment
systems were relatively similar, and differed only in some small terms. Thus, findings showed that there are
numerous factors which affect the usage of e-payment systems. Amongst all the various modes of payments
consumer point of view is most important and additionally success of e-payment systems also depends on
consumer choices, cost, easy in use, approval, safety and security, verification, non-refundability,
convenience, credibility, secrecy and public policy. Based on the findings, it was cleared that the Internet
plays a very crucial role in the field of e-payment. The study revealed that the peoples were not aware and
educated about e-payment.
Junadi (2015) examined the usage of e-payment system amongst the consumers in Indonesia. He added the
two external variables i.e. culture and perceived security. The variable Culture was used to explained the
details about habits of consumer while perceived security explained the safety and security features that how
electronic payment system is secure in accordance with the terms & conditions of society of Indonesia.
Dehbini et al. (2015) found that all of the factors like usefulness, ease of use, satisfaction, compulsion, norms
and network externalities have significant effect on acceptance of electronic micropayments cards. They said
that this research did on citizens who used this type of payments in their micropayments but other researchers
also can do research on people who are service providers like seller.
Rouibah (2015) found out the five contributions, in which first contribution in the Arab world that showed
most used electronic payment system. The second contribution consists the most used electronic payment
system that received high satisfaction. The third contribution consists to shed light on EPS not currently used
and that consumer intent to use in the next coming 12 months. The fourth contribution is the classification of
the most perceived obstacles towards using alternative electronic payment system. The fifth contribution that

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perceived obstacles are related to risk perceptions, lack of law and regulations that protect online consumers,
lack of security protection, lack of failure to fulfill the services and products are promised and lack of
reputation of electronic payment system service provider.
Islam (2015) found out that in order to make e-payment secure and make e-commerce effective in Bangladesh
each of the operational and legal issues has to be addressed by the relevant authorities. Cyber law should be
enacted to deal with fraud and settle any dispute between buyers and sellers. Electronic fund transfer being
essential for giving necessary impetuous to e-commerce should be made secure and efficient. It was revealed
from the survey that the main concern of the customers and service providers about any electronic payment
was the security. E-banking service providers should have to ensure that online banking is safe and secure for
every user in all kind of transactions. The authors also proposed a secure e-payment model in general and on
debit card and credit card to bring customers confidence on e-payment and increase the volume of e-
commerce in the context of Bangladesh.
Kaur & Kaur (2015) revealed from their paper that technology has made the people’s lives very easy. It saves
the distance and time. They found that one of the advancement in technology in the field of banking,
commerce and finance is e-payment. E-payments introduce the technological advancement that facilitates to
perform monetary transactions by electronic means and thus avoiding long queues and other difficulties
which are related to traditional payment system. As payment system are backbone of the financial
infrastructure of the nation and enhance globalisation so there is a need to create and develop the payment
system that are efficient, reliable and affordable.
Kabir et al. (2015)critically examined the previous studies of adoption of e-payment across the world. The
study analysed the past researches through giving more stress on three distinct elements, these elements
include the scope-geographical location of the study, various theories/ various models used and methodology
used. Firstly, the findings of the current study showed that majority of adoption of e-payment studies were
carried out in less developing countries especially in African countries. Secondly, the study also showed that
survey method was the main method used by previous studies to examine the acceptance of electronic
payment systems across the world. Thirdly, they found that banking sector had been the first options on
adoption of studies of e-payment system as important past studies of e-payment used bank customers and
staff members of banks as respondents. Additionally, the most courageous instrument used for data collection
in the past studies was the questionnaire method. Moreover, it was also found that the most often used models
in influencing adoption of e-payment in the past studies were the Technology Acceptance Model (TAM) and
Unified Theory ofAcceptance and Use of Technology (UTAUT).
Nwankwo & Ajemunigbohun (2016) attempted to examine the execution of e-payment systems in delivery of
services in insurance companies in Nigeria and the current study proved that there was an improvement in e-
payment systems in relation to delivery process of service within the Nigerian insurance market space but it
was revealed that e-payment have not been fully adopted in the insurance industry of Nigeria.
Dastan & Gurler (2016) pointed out that perceived trust, perceived mobility and attitudes positively affect the
adoption of Mobile Payment Systems (MPS). Perceived usefulness and perceived ease of use have no effect
on adoption of MPS. The study also revealed that reputation is positively related to perceived trust and finally
environmental risk is negatively related to perceived trust. Singh et al. (2016) revealed that e-payment refers
to the type of payment which does not include physical cash or cheques. It includes various kinds of payment
systems like debit card, credit card, smart card, e-wallet, etc. They found that the efficiency of e-payment
system depends largely on the availability of an effective information and communication technologies (ICT)
infrastructure where authentic network connectivity, strong hardware and high expertise in Information and
Communication Technology are available. The various types of risks in the online payments are theft of
payments data, personal data and frauds. Therefore, the fruitful execution of e-payment system depends on
how the security and privacy factors perceived by users as well as sellers.
Mathur (2017) found that electronic payment system provides better freedom to various users in payment
options. The paper also revealed that the users were not conscious about the safety and security concerns
while making e-payments. So there is a need to have awareness programs about safety and security concerns
of e-payment system by the various agencies. Oney et al. (2017) made an attempt to identify the determinants
of perceived security and perceived trust and their effect on use of electronic payment system. The findings
have showed that both perceived security and perceived trust have a positive and significant effect on use of
electronic payment system. In other words, when users observe the electronic payment system as safe and

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trustworthy, they are more willing to complete their transactions electronically. The findings have also
showed that technical protection is the strongest factor of both perceived security and trust. Saini & Sharma
(2017) found that growth in internet usage and e-commerce significantly affect the e-payment. Factors such
as trust and risk were not searched to be linked with customers’ opinion towards electronic payment and
factors such as usefulness, security and ease of use are very huge determinants that need to be studied
separately.
OBJECTIVES
The success of any technology is not calculated by how sophisticated it is, but how simply it combines with
social life and derives its value by the usage on human life. Thus, the techno-social acceptability of any new
“technology” proves the real value and its reason for existence. With the rapid growth of e-payment system, it
is emerged as one of the most important technology evolved through [Link], there is a need to
study intention of users towards performing e-commerce transactions and making the payment
electronically. Thus, exploring the factors that may influence e-commerce user’s intension to use e-payment
system helps policy makers to attract more customers. Therefore, objective of the present study is to explore
factors influencing user’s intention to use e-payment system.
RESEARCH METHODOLOGY
The Study: The research is exploratory in nature and based on survey of e-commerce users towards their use
of electronic payment system. Itmainly aims to explore the factors that affect the consumer intention to use
electronic payment system in Indore division of Madhya Pradesh state of India.
The Sample: The population under study includes the e-commerce users of Indore division who use the
various types of e-payment system for various purposes. In the absence of sampling frame, non-probability
convenience sampling has been used. According to Bryman and Cramer (2001), differences between random
and non-probability convenience samples in terms of their representativeness are not as significant as have
often been implied. Invitations were sent to respondents through e-mails for filling up the questionnaire and
they were also requested to forward the questionnaire to other users. Apart from e-mails respondents were
also personally approached for filling up the questionnaire. Finally, 400 respondents completed the survey
successfully. Therefore, sample of the study comprises of 400 e-commerce users which were selected from
the population of eight districts of Indore division namely Indore District, Barwani District, Dhar District,
Khargone District, Khandwa District, Jhabua District, Alirajpur District and Burhanpur District. Indore
Division has been considered for the study because it is important administrative geographical unit of
Madhya Pradesh state of India consists of above mentioned eight districts. Here peoples belong to all types of
occupation including business class, service class, and self-employed persons. Indore Division is a
combination of people of both urban and rural districts. After demonetisation in the country, increase in usage
of electronic payment system was observed in the Indore Division. Digital Dakiya scheme was launched in
Indore District by the state government to promote the cashless transactions. It is a growing division in terms
of income and therefore most people here uses electronic payment system. That’s why researcher considered
Indore Division for the study. The demographic and district wise classification of the sample is given in Table-
1 below.
Tools for Data Collection: The primary data for the study have been collected through a self-structured
questionnaire comprised of 26 items. These items were presented on five point Likert scale ranges from
Strongly Agree (5) to Strongly Disagree (1) and administered on the sample of 400 respondents. Initially 36
items identified by the researchers on the basis of rigorous review of related literature. After taking critical
opinions and suggestions of six industry experts and six senior academicians, 26 items were finalized as valid
items for the scale. The general demographic information of the respondents has also been collected using
separate section in the questionnaire.
Tools for Data Analysis: The Statistical Package for Social Science (SPSS 21.0) and MS Excel 2007 was
used to analyse the collected data and to arrive at meaningful conclusion. Firstly, the Reliability Analysis had
done using Cronbach's Alpha Method. The Cronbach's Alpha Reliability of all 26 items found to be 0.932
showing the high reliability of 26 statements (Table-2).

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Table-1: Demographic and District wise Classification of the Sample

Secondly, the Principal Component Method of factor analysis using varimax rotation was applied on the 26
significant items to explore the factors along with KMO and Bartlett's Test. Value of Kaiser-Meyer-Olkin
(KMO) measure of sampling adequacy was found to be 0.940 (which should be more than 0.5 as per
standards).To ensure significant correlations among input variables, Bartletts test of sphericity was done and
the p value (sig.) was found 0.000 (which should be less than 0.05 as per standards) and indicating significant
correlation among the selected variables therefore factor analysis found valid to apply on the collected data
(Table-3).

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The extraction values of communalities for each item must be more than 0.4 (i.e. 40%) as per standards and
therefore once again confirmed the significance of each item that were used in factor analysis (Table-4).
Finally, as a result of factor analysis, four factors were explored and discussed in the next section.

Table-4: Communalities
Initial Extraction
Q1 1.000 .510
Q2 1.000 .422
Q3 1.000 .526
Q4 1.000 .582
Q5 1.000 .588
Q6 1.000 .526
Q7 1.000 .445
Q8 1.000 .709
Q9 1.000 .550
Q10 1.000 .654
Q11 1.000 .636
Q12 1.000 .707
Q13 1.000 .566
Q14 1.000 .466
Q15 1.000 .574
Q16 1.000 .554
Q17 1.000 .588
Q18 1.000 .635
Q19 1.000 .432
Q20 1.000 .575
Q21 1.000 .639
Q22 1.000 .633
Q23 1.000 .629
Q24 1.000 .607
Q25 1.000 .651
Q26 1.000 .464

RESULTSAND DISCUSSIONS
Using factor analysis 26 items were finally classified into four factors namely Perceived Usefulness(with %
of variance = 31.928), Perceived Social Esteem (with % of variance = 13.147), Perceived Security(with % of
variance = 7.040), and Perceived Reliability (with % of variance = 5.068). These factors explained total
57.183% of the variance and Eigen values of each factor are more than one. The present study empirically
explored these four factors for providing better criteria for consumer’s intention to use electronic payment
system generally in India and particularly in Indore Division. All these factors are individually discussed as
under.
The first factor entitled Perceived Usefulness consists of 17 items. The total load of this factor is 11.261. The
factor explained highest 31.928 percent of variance and Eigen value is 8.301. Table-5 summarizes the details
of this factor.

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Table-5:Result of the Factor ‘Perceived Usefulness

Factor Items Items Factors % of Eigen

Load Load Variance Values
I use e-payment system as it can be accessible from many 0.756
locations.
I use e-payment system as it removes the burden of 0.747
carrying cash with me
I use e–payment system because it helps me to avoid 0.738
hassle of standing in a long queue for payments.
I use e-payment system as it reduces manual work. 0.728
I use e-payment system because it is widely accepted for 0.721
various purposes like online shopping, bill/tax payment,
etc.
I use e-payment system as it provides proper receipts after 0.704
payments
I use e-payment system as it is operational on 24 hours x 0.699
07 days basis.
I use e-payment system as it saves my time. 0.687
Perceived I use e–payment system as it provides traceable and 0.683
Usefulness retrievable records of transactions 11.261 31.928 8.301
I use e–payment system as it is convenient for me 0.657
I use e-payment system as it provides multilevel securities
like one time password, transaction passwords, etc. 0.646
I use e-payment system because I like to adopt and use 0.640
technologies
I use e-payment system as it refers to paperless 0.617
transactions
I use e-payment system because it helps me to reach to 0.608
local/national/global merchants easily
I use e-payment system because it is better than offline 0.575
payment systems
I use e-payment system because it increases chances to 0.551
get cash back offers, extra discounts, etc.
I use e-payment system because it is user friendly. 0.504
‘Perceived Usefulness’ factor is emerged as relatively strongest indicator of consumer’s intention to use e-
payment system in Indore division. Perceived Usefulness is the degree to which a person believes that using a
particular system would enhance his/her job performance (Davis, 1989). The useful values of e-payment
system linked with mobility and control over the monetary transactions thus found to have a great effect on its
uses. Practically, e-payment system is found to be useful to the users as it can be accessible from many
locations, removes the burden of carrying cash and preventing from standing in a long queue for payments. It
is well integrated into the routine activities of the consumers thus providing benefits of getting all the cash
back offers, extra discounts and reduces manual work. It is widely accepted for various purposes like online
shopping, bill/tax payments, etc., in comparison to any other existing technologies. In other words, e-
payment system found to be useful as it operates on 24×07 hours basis; saves time of the users and provides
traceable and retrievable records of transactions. Schierz et al. (2010) similarly observed that users are willing
to adopt the technologies if those provide unique benefits compared to the existing technologies. E-payment
system is found to be one of the best alternatives with a well planned, clearer and understandable user
interface. The clearer and understandable interaction with e-payment system helps the users to complete their
task easily. The above results are consistent with the finding of Cooharojananone et al. (2011); Ndubisi and
Sinti (2006) who have documented the importance of well designed user’s interface and recognized the
importance of clear and understandable procedural information to any technology usage.

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The second factor entitled Perceived Social Esteem consists of six items. The total load of this factor is 3.726.
The factor explained 13.147 percent of variance and Eigen value is 3.418. Table-6 summarizes the details of
this factor.
Table-6: Result of the Factor ‘Perceived Social Esteem’

Factor Items Items Factors % of Eigen

Load Load Variance Value

I use e-payment system because it is trendy. 0.831

I use e-payment system because it builds my 0.724

Perceived
reputation in the society
Social
3.726 13.147 3.418
Esteem
I use e-payment system as its additional costs of 0.611
transaction (if any) are known to me.

I use e-payment system as it is easy to understand 0.543

I use e-payment system because my friends and relatives 0.514

influences me to use it

I use e-payment system as it is cost effective. 0.503

‘Perceived Social Esteem”has identified as an important factor affecting to use e-payment system. This factor
covers the reputation of individual in a particular society while using e-payment systems. The result of the
study conducted by Anderson et al. (2002) suggested that similar socio-economic status in term of income,
educational attainment and the current employment status of the residential (household) customers have a
positive correlation to the internet banking access rates. At the same time social and psychological factors had
been considered for discussing the usability aspects of technology acceptance which are proved important
predictors of the decision to adopt a technologically based innovation (Venkateshet. al 2003). Practically, e-
payment system is found to be based on social esteem as it is fashionable and trendy, builds reputation in the
society, and various friends and relatives influences the users to use the electronic payment system. In other
words, use of e-payment system is based on social esteem factor because e-payment system is cost effective,
easy to understand, and additional costs of transaction (if any) are known to the society. As e-payment users
one can show their esteem presences in the society because permission of using e-payment systems is
possible after fulfilling stringent KYC norms. E-payments users are also easily accepted and appreciated by
individuals who are frequently engaged in different types of professions and hobbies.
The third factor entitled ‘Perceived Security’ consists of two items. The total load of this factor is 1.443. The
factor explained 7.040 percent of variance. The Eigen value is 1.830 for this factor. Table-7 summarizes the
details of this factor.

Table-7: Details of the factor ‘Perceived Security’

Factor Items Items Factors % of Eigen

Load Load Variance Value
I use e-payment system because there is no fear of 0.778
Perceived fraud in it 1.443 7.040 1.830
Security I use e-payment system as it maintains the privacy of 0.665
personal information against unauthorised access

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‘Perceived Security’ is also considered as important factor towards use of e-payment system. Today,
customers in India still have fear in doing electronic payment transactions, as these transactions are very
much concerned with security and privacy aspects. In other words, one can say that although confidence of
customers in the bank was strong, yet their confidence in the technology was weak. Consumers are afraid that
their personal financial information will become available to others through the internet and used for
fraudulent purposes. Vijayasarathy (2004) defined perceived security as “the extent to which a consumer
believes that making payments online is secure”. The need for security has already been recognized by the e-
commerce and banking service providers. Security concerns in the context of e-payment system include
threats made through networks involving data transactions or unauthorized access to accounts due to
authentication failures. Perceived Security therefore is the customers’ perception towards protection against
these threats (Yousafzai, Pallister, & Foxall, 2003).
The fourth factor entitled ‘Perceived Reliability’ consists of one item. The total load of this factor is 0.802.
The factor explained 5.068 percent of variance. The Eigen value is 1.318 for this factor. Table-8 summarizes
the details of this factor.
Table-8: Details of the factor ‘Perceived Reliability’

Factor Items Items Factor % of Eigen

Load Load Variance Value

Perceived I use e -payment system as it provides consistent 0.802 0.802 5.068 1.318
Reliability payment services without any fail.

Perceived reliability is an important factor in acceptance of technology and it refers to the consistently correct
technical functioning of technology. There are very few researches available about the effect of perceived
reliability. In some researches, perceived reliability is treated just like a perceived credibility. According to
Ong et al. (2004) perceived credibility is the degree to which a user thinks that using a certain system is free of
privacy and security threats. Perceived reliability can be conceptualized as the extent to which users of the
interactive information technology believe that this technology is reliable for transmitting important
monetary information amongst the users and keeping the personal and private information of the users safe
and secure. This factor is critical to users’ intention to usee-payment system because it reflects a capability of
the particular e-payment system to perform the promised service dependably, safely, accurately and
consistently. Practically because of this factor e-payment service providers give consistent and accurate e-
payment services without any fail.
CONCLUSIONAND IMPLICATIONS
The awareness towards the use of electronic payment system in India is in the initial stage, specifically semi-
urban and rural areas. In other words, the knowledge of electronic payment system is in the beginning stage.
According to Yang (2005); Luarn and Lin (2005); Venkatesh and Davis (2000) the Technology Acceptance
Model along with some incorporated constructs is seen as a good starting point in studying the consumer’s
behaviour towards the use of e-payment system. The present study explored the four factors affecting usage
intentions of e-payment system users in Indore division. These factors are Perceived Usefulness, Perceived
Social Esteem, Perceived Security, and Perceived Reliability. Usefulness of the e-payment system
technology as discussed in the study is a main concern for creating a positive intention towards its uses. The
service providersmust promote the useful characteristics of e-payment serviceslike convenience,
pervasiveness and flexibility among the users so as to attract more and more customers to use e-payment
system.
The present study identified that respondents are started adopting e-payment system as a social status and
were highly influenced by the references given by their colleagues and peers for adopting the use of e-
payment system. Awareness programmes conducted by banks had also shown a considerable importance
especially for the potential users as they can clear their doubts and lower down their fear while adopting
mobile banking services. This kind of programmes must be conducted on a routine basis so that the
users/consumers are updated with the latest feature of e-payment services. There are various types of
electronic payment system available for the potential uses. Availability of different types of e-payment

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Factors Influencing Consumer’s Intention to Use E-payment System ISSN : 2349-7165

system on 24×07 hours basis with hassle free connectivity will ultimately increases the consumers’ intention
towards use of e-payment system.
In addition, the findings suggested that even if consumers find e-payment system to be useful and socially
accepted, their values will become inconsistent if a payment system does not provide a secured and a safe
environment. Hence focus on reduction of risk is very essential for the successful establishment of e-payment
system. Therefore, it is suggested to financial institutions to invest in systems that develop an assertion over
the privacy and security issues of the customers, avoid exploitation of personal information and assure
reliable, safe and secure data transmission for consumers. Also, banks must make their customers aware
about the efforts taken by them in providing a safe, risk free and error free technology so as to improve
perceived value and develop a positive intention towards the use of e-payment system.
Further the study concludes that if the consumer’s living and working styles are compatible with the use of e-
payment system they build a positive intention towards the use of e-payment system. Hence, there is a need to
show to the consumers that how the use of e-payment system fits well and can be useful with their lifestyle in
order to increase their usage rate. In the current study the potential users had shown some skills to work with e-
payment system with perceived reliability and consistency. But addition of any new technical feature that
increases reliability of system must be properly communicated to the existing customers on timely manners.
Moreover, outcomes of this study are not only helpful to the users of e-ecommerce who are planning to adopt
e-payment system in place of case on delivery but also for the companies who are working in this field to
improve performance and uses of electronic payment system which in turn will help them to remain
competitive. The present study is also helpful for the financial institutions to know the factors which influence
the users' intention towards the use of e-payment system for the formulation of promotional polices. This
paper provides a framework which helps researchers to understand the drivers of consumers' perception and
their intention towards the use of e-payment system. Moreover researchers can conduct similar studies in
different geographical areas to validate the findings of the present study.
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