E-payment electronic billing, electronic cash and stored value

E-payment is a
way of making transactions or paying for goods and services through electronic
method without the use of cash and check. It’s also called an electronic
payment system or online payment system. In short, e-payment is
facilitated by internet access. It includes all financial operations using
electronic devices such as computer, smartphones or tablets. The e-payment system has grown
rapidly over the last decades due to the widespread of internet-based banking.
As the world more on technology development, a lot of e-payment systems and
payment devices have been developed to increase and improve payment transactions
while reducing the transaction of cash and cheque.

include a various method which is Electronic Funds Transfer (EFT) and Credit
Payment system. EFT is an
electronic system used to transfer money from one bank account to another
without any exchange cash by hand. EFT include direct debit, e-cheque,
electronic billing, electronic cash and stored value card. For the credit
payment system, it is
credit transfer through payment provider, which is an intermediary
between the customer’s bank and the retailer. These include credit cards and
e-wallet. Generally, these are the most popular and actively used by many
consumers and businesses in their daily transactions.

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by the use of Information and Communication Technology(ICT) and digital
innovation, the banking sector has changed whereby the transactions are
shifting from traditional banking to electronic banking system which is
e-payment (Slozko&Pelo,2014).
Traditional banks were the first financial institution which provides current
account and saving account, acts as the depository institution to accept
deposits, make loans and payment of the cheque. In short, traditional banking
involves cash and other paper-based transactions. In comparison, e-payments are effective and
efficient especially in international transactions because payment is
made instantly and so its save time. Along with the electronic commerce
(e-commerce), e-payment has expanded rapidly over the years as e-commerce allow
consumers exchange goods and services electronically without barriers of time
and distance. E-commerce is a term for any form of business transaction that
conducted across the internet. Today, the world payment system drive towards
the current trends of cashless transactions has further extended the need for
countries to provide efficient e-payment system to promote growth and economy
efficiency. Furthermore, efficiency payment system would also help to reduce
the costs related to cash and cheque transaction.

     Although e-payment has received recognition
throughout the world, there are still a lot of consumers are not adopted the
e-payments especially in developing countries such as Malaysia. It is an
unavoidable fact that perceived risk is associated with the e-payment systems
and it contributes to the decision factors in its adoption. This paper examines
the factors influencing consumer’s intention to adopt e-payment. These factors
then disclose including individual differences and consumer’s demographic
characteristics on e-payments. The findings based on various literature reviews
recommend that consumer awareness, convenience, security, and availability of
e-payment tools are the elements which can boost the adoption of e-payment
system. According to the Visa consumers payment report 2015, smartphone
penetration, worldwide connectivity, cloud computing and the internet of things
are the various trends of transactions of consumers in future.

     In the next section, e-payment has been
reviewed and previous research on security and trust issues are examined.
Following this section, a theoretical framework is presented. Subsequently, the
research methodology and results are discussed. Finally, conclusion and
research implications are provided in the last section.


Statement of Problem

The appearance of Internet, the innovation of
technology, and the rapid growth of wireless device and network, e-payment has
become a critical component for the success of financial services. The key
factors for the importance and popularity of e-payment are due to its
characteristics such as efficiency, convenience, and scalability. Thus, greater
recognition of e-payment system has been deployed by individuals and businesses
throughout the world. According to Bank Negara Malaysia, it is important to
take priority over the e-payment as it is important to improve productivity and
contribute towards raising a country’s competitiveness. Also, having an
efficient payment system is the major support of a highly competitive country.

countries such as United States, United Kingdom, and France have fully migrated
to an electronic payment system, meanwhile developing countries such as
countries of the Asia Pacific provide the force and encouragement to the
industry. For instance, the Bank Negara Malaysia has defined that Malaysia
would achieve higher economic growth and higher competitiveness by fully
migrating from traditional banking method to electronic payments, to boost
productivity and lower consumption.

to Bank Negara Malaysia, Malaysia is still far behind towards e-payment
adoption due to consumers lack awareness. This paper presents an enhanced
theoretical framework that examines major factors concerning e-payment adoption
such as infrastructure, literacy, security, and trust. Furthermore, the results of this study may be
generalized in other developed countries whose faced significant challenges.
For instance, the e-payment instruments are not used with equal intensity in
developed countries as caused by factors of infrastructure, security, and
sociocultural challenges (Ingenico,
2012). These factors are deemed to be important to provide Malaysia with
the confidence to fully migrate e-payment system.

Malaysia is classified as a
cash-based society with nearly to 90 percent of Malaysia’s transactions are
still conducted in physical cash. On the other hand, the most developed
countries such as UK and Australia conduct 90 percent of transactions via
e-payment (The Star,2015).  The growth in cashless transactions for the
2010-2015 period in Malaysia is only 9 percent, compared to China and Indonesia
with 27 percent and 23 percent respectively (Table
1). These figures show that Malaysians are still heavily dependent on cash
and other paper-based payments.


Table 1: The growth in cashless transactions

Source: McKinsey,2017




     Given the
importance of e-payment, Malaysia with a strong vision to achieve developed
economy from developing country under the Vision 2020, needs to promote and
fully migrate from traditional banking to electronic payment system in the
region. However, Malaysia’s consumers are still hesitant to fully adopt the
e-payment technology. For instance, many consumers in Malaysia are more likely
to act with human interaction instead of using the electronic technology to purchase
goods and services, especially the elderly residents.

the knowledge of factors influencing the adoption of e-payment by consumers and
the challenges encountered in Malaysia have to improve in providing efficient
and reliable services to the users. Also, understanding the determinants and
the factors on e-payment adoption will be important to the Malaysia who attempt
to fully migrate to e-payment.


Purpose of study

Examining and investigating the determinants that
encourage consumers adoption behavior is important as consumers are always
faced with technology adoption decisions. In addition, especially for
developing countries such as Malaysia, where the opportunity to achieve high
economic growth and the benefits of technology.

     This study focuses on all types of
transactions by consumers and businesses, including business to business(B2B),
business to consumers(B2C), consumers to business(C2B), consumers to
consumers(C2C). These are the common transactions in the payment industry and
indicate the large-scale of an e-payment market in a country. It is important
to look into views and perspectives from the different users for e-payment
transactions to understand the overall issues on the lower rate of e-payment
adoption in Malaysia. Moreover, it also allows understanding more on the
factors that influence consumers decision to adopt e-payment while engaging in
each e-payment transaction in this study. So, I targeted on consumers from
various demographic characteristics because I focus on the individual behavior
that influences e-payment adoption. Other than that, the challenges encountered
by e-payment adoption in Malaysia also can be identified.

Subsequently, the interconnection
between the factors that influence consumers e-payment adoption is discovered.
Therefore, the implications of the e-payment adoption can be discussed and make
suggestions for further improvement in Malaysia.



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