An empirical study on the factors influencing the adoption of m-payment service in Korea

Abstract

Mobile operators hold a great deal of interest in mobile payments service because that service is considered to spread rapidly in the payment market, however, few works are done to address this issue. Thus, this study is offered as a supplement to consumer based mobile payments market analysis. This study modifies Rogers" diffusion of innovation model to examine the factors that influence the adoption of mobile payments service in Korea. An on-line survey obtained 983 valid respondents, and factor analysis and regression were used to test the validity of the proposed model. Seven factors are identified and have significant effects on the adoption of mobile payments service; relative advantage, image, safety, personal characteristics, propensity using mobile Internet, personal payments environment and perception of advantages of mobile communication. The data analysis shows that these variables were good predictors for the adoption behavior. Cluster analysis is conducted to examine a market segmentation of m-payments using derived factors from factor analysis. This study generates four consumer groups: image-sensitive consumers, relative advantage-sensitive consumers, mobile service and payment environment-sensitive consumers, and safety-sensitive consumers. Significant differences among the four groups were found for gender, occupation, the number of credit card, and the amount of credit card used. This study has the limitation as self-selection bias caused by the inherent limits of an on-line survey. Future research is needed to minimize problems such as sampling bias by using alternative data collection methods like off-line surveys complementarily in conjunction with on-line surveys. In spite of this limitation, this study makes both theoretical and practical contributions. From a theoretical perspective, we proposed modified Rogers`` model reflecting Korean characteristics for technology adoption by potential users. In addition to Rogers" model, we ...