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Abstract
The advancement of technology, coupled up with smartphone usage and the covid-19 pandemic onset all increased the popularity of digital wallets. Digital wallets area contactless type of payment that gained popularity in Malaysia after the pandemic and continue to be utilized. Most common digital wallets in Malaysia include BigPay, Boost and Touch’n Go digital wallets. The aim of the study was to analyse the adoptability of digital wallet in Johor Bahru, Malaysia. The study adopted a mixed method design using both primary and secondary data. Primary data was obtained from interviews with 10 customers and users of digital wallet. Secondary data was collected from reputable secondary sources. Analysis of data was attained using thematic analysis. The findings show that there has been a decline in the adoption of digital wallets after the pandemic. It is recommended that security be increased in regards to digital wallet and that consumers be informed to increase their knowledge on the same.
CHAPTER 1: INTRODUCTION
1.1 Background Information
The digital wallet has become an integral part of doing business in the 21st century. According to Alam, Awawdeh & Muhamad (2021), an e-wallet refers to an electronic payment that enables one to make online purchases using their computer or phone, just like a credit or debit card. Digital wallets are linked to the bank account of a user to allow for a cashless payment and users can also save money in the digital wallet to use for future transactions (Teng and Kong, 2021). Consumers can use the digital wallets to pay for products and services at both online and physical stores. For example, in physical stores, consumers can use their phones to make a payment. The adoptability of the digital wallet, just like any other technology, is dependent on the perceived usefulness and the perceived ease of use. Perceived ease of use is the extent to which individuals view how easy it is to use a technology (Malik & Annuar, 2021). On the other hand, perceived usefulness is the degree to which individuals believe that the technology is useful and meets their needs (Abd Malik & Syed Annuar, 2019). The effectiveness of the digital wallet can be assessed based on the level of adaptability.
Malaysia, is on the verge of becoming a cashless society. More than 70% of consumers in Malaysia opt to use online transactions, but since the pandemic hit, there was a reduction in the use of the same (Aji, Berakon & Md Husin, 2020). One of the most popular e-wallets that is utilized in Malaysia is GrabPay, and it allows consumers to pay for ride services, groceries, bills, and food (Aji, Berakon & Md Husin, 2020). Others include BigPay, Boost and Touch’n Go digital wallets. Consumers tend to use the e-wallet system because of bill rebates, discount coupons and cashback payments. Johor Bahru, was preferred as the location of study for this research because it is the capital city of Malaysia and also most of the economic activities of the country are concentrated in this city.
1.2 Problem Statement
In all new technologies, the digital wallet included, the adoptability level depends on the way that consumers interact with it. Research shows that a technology that is useful and easy to use records high level of adoptability and vice-versa is true (Effendy, Hurriyati & Hendrayati, 2021). The introduction of digital wallets has promoted the use of cashless payments across the globe. Despite this, there are also some consumers who may prefer to use cash or other methods of payments. On the same note, previous research has shown that digital wallet providers may be tempted to collect more data than they need without the consent or the knowledge of the client (Mohamad Anuar et al., 2020). This treachery has a potential of promoting financial fraud and identity theft and these are some of the reasons that may hinder consumers from adopting the digital wallet.
Previous studies on the issue have focused on the advantages of e-wallets (Teng and Kong, 2021), the factors that determine the usage (Alam, Awawdeh & Muhamad, 2021), or effectiveness of e-wallets. There exists the gap in research on the adoptability of e-wallets especially in the capital city of Malaysia. Therefore, the current study will help to fill this gap that exists in the literature on the same. The mobile wallet adoption level in Malaysian consumers is still at a lower adoption rate compared to nations such as India and China (Saadon & Long, 2020). A research by the PricewaterhouseCoopers (PWC) in Malaysia in 2018 showed that only 9% of consumers used the wallet more than six times a week (PWC, 2018). Financial services such as the digital wallet remain inadequately explored in Malaysia and that is why it is important to investigate the level of adoptability of the digital wallet in the capital city.
1.3 Rationale of Research
The study is important for various reasons. It will help to determine some of the factors that affect the adoption of digital wallet in Malaysia. The identification of these factors will help to come up with possible recommendations for the issue. The study will also help organizations and consumers to understand the advantages and risks of the cashless payment system. The investigation of the adoptability of digital wallet in Malaysia will offer valuable information to stakeholders in the mobile wallet ecosystem. The findings will offer support to the mobile wallet companies to develop an appropriate marketing strategy decision on the issue. The research will constitute a report that will be used by future researchers as a reference.
1.4 Research Objectives
1.4.1 General Objective
The aim of the study is to analyse the Adoptability of Digital Wallet in Johor Bahru, Malaysia
1.4.2 Specific Objectives
The specific objectives of the study include:
1. To determine the factors affecting consumer’s willingness to adopt digital wallet in Johor Bahru, Malaysia
2. To identify the challenges consumers face while using the digital wallet in Johor Bahru, Malaysia
3. To identify possible solutions to improve the adoption of digital wallet in Johor Bahru, Malaysia
1.5 Research Questions
1. What are the factors affecting consumer’s willingness to adopt digital wallet in Johor Bahru, Malaysia?
2. What are the challenges consumers face while using the digital wallet in Johor Bahru, Malaysia?
3. What are the possible solutions to improve the adoption of digital wallet in Johor Bahru, Malaysia?
1.6 Scope of Study
The study will focus on digital wallets only and no other form of payment. Theoretically, the focus will be on the level of adoptability, which will majorly include the perceived ease of use and the perceived usefulness of the technology. Besides that, the scope of the study will also be limited geographically, it will focus on the capital city of Malaysia only and not any other cities.
1.7 Structure of Dissertation
The layout of this research will include five main chapters that will help to address the research questions. The background of the study, including the aims and objectives are discussed in the first chapter. The second chapter will focuses on the analysis of the theories that apply, the conceptual review and the review of previous studies on the topic. The methods used to collect and analyse data are discussed in the third chapter while the fourth chapter is a critical presentation and discussion of the findings of the study. The last chapter is a summary of the conclusions of the study, offering answers to the research questions and presenting the recommendation
CHAPTER 2: LITERATURE REVIEW
2.1 Chapter Introduction
This chapter discusses previous literature on the topic. It offers a conceptual review that includes the description of different concepts in the study. Besides that, it also discusses some of the theories that relate to the study variables and shows how these models help to explain the relationship between the study concepts. Also, it helps to offer a critical review of previous studies on the issue.
2.2 Digital-Wallet
The digital wallet payment method is a type of approach that allows consumers to store amounts of money and then make payment through their computer or smartphone. While use the digital wallet system, consumers must attach their credit and debit card details to allow the money to be deducted from their banks (Rathore, 2016). The digital wallet is considered as one of the most significant payment methods in the time being because of it allows for transactions to be made through the mobile devices. The world is moving towards the cashless method of payment and that is way the advantages of ease and flexibility that are offered by the digital wallet have become some of the main issues that consumers consider. Consumers may access the digital wallet on their laptops, phone or any other electronic device that is compatible. Currently, the digital wallets are being considered as safer compared to the credit cards because the transactions tend to produce a token number that improves the tracking of the process. Furthermore, it is also convenient because all the information is available at a single place and it is also accessible from multiple devices. Some of the most popular examples of digital wallets are the Samsung wallet, apple pay, paypal, google wallet, cashapp, and venmo (Rathore, 2016). The onset of the pandemic helped to promote the use of contactless cash and it was during that time that the digital wallet gained prominence in most nations. It offered a chance for consumers to pay timely using their phones rather than having to spead the disease through distributing cash from one area to another. Since then, the trend is continuing in most places as consumers slowly learn to focus on the use of the digital wallets.
2.3 Definition of Technological Adoption
Research defines technology adoption as the deployment, acceptance and the implementation of a new texchnpology in a group, society or people (Rathore, 2016). Organisations come up with a new technology based on the needs of the market. These needs are often identified through a thorough analysis of consumers that is often conducted by the research and development section of a company. Therefore, when the technology reaches the consumers, it also takes time for it to be received and accepted based on the personal views of the consumer as well as the capability of the technology ((Rathore, 2016). Therefore, in this study, adoption is about accepting, integrating and using the technology. The choice to purchase or utilize a new technology is contingent upon a consumer. According to Ramadhanti (2022), the adaptation of any technology is important because it helps to improve the experience of the customer, increase productivity
