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UNIVERSITI TUN HUSSEIN ONN MALAYSIA
STATUS CONFIRMATION FOR UNDERGRADUATE PROJECT REPORT
THE ADOPTION OF CASHLESS TECHNOLOGY AMONG CONSUMERS
IN MALAYSIA
ACADEMIC SESSION: 2017/2018
I, NURUL ALIYA BINTI ZULKIPLY agree to allow this Undergraduate Project Report to be kept
at the Library under the following terms:
1. This Undergraduate Project Report is the property of the Universiti Tun Hussein Onn
Malaysia.
2. The library as the right to make copies for educational purposes only.
3. The library is allowed to make a copies of this report for educational exchange between
higher educational institutions.
4. **Please Mark (√)
CONFIDENTIAL (Contains information of I security or of great
importance to Malaysia as STIPULATED under the
OFFICIAL SECRET ACT 1972) RESTRICTED (Contains restricted information as determined by the
Organization / institution were research was
conducted) FREE ACCESS
Approved by,
(WRITER’S SIGNATURE) (SUPERVISOR’S SIGNATURE)
Permanent Address: DR.SHAFIE BIN MOHAMED ZABRI
NO 15 LORON IM 12/6,
TAMAN ASTANA PERMAI,
25200, KUANTAN,
PAHANG
Date: _____________________ Date: _____________________
NOTE:
** If the this Undergraduate Project Report is classified as
CONFIDENTIAL or RESTRICTED, please attach the letter
from the relevant authority/organization stating reasons and
duration for such classification.
√
THE ADOPTION OF CASHLESS TECHNOLOGY AMONG CONSUMERS IN
MALAYSIA
NURUL ALIYA BINTI ZULKIPLY
A thesis submitted in
Fulfilment of the requirement for the award of the
Bachelor of Technology Management with Honours
Faculty of Technology Management and Business
Universiti Tun Hussein Onn Malaysia
JANUARY 2018
ii
I hereby declare that the work in this project report is my own except for quotations
and summaries which have been duly acknowledged
Student : ………………………………………………….
NURUL ALIYA BINTI ZULKIPLY
Date : ………………………………………………….
Supervisor : ………………………………………………….
DR SHAFIE BIN MOHAMED ZABRI
iii
DEDICATION
To my beloved family members,
Thank you for tolerating with me and always being with me
iv
ACKOWLEDGEMENT
First of all, I would like to express my special thanks of gratitude to my
respectable supervisor, Dr. Shafie Bin Mohamed Zabri for his endless support,
encouragement and guidance during the research work.
I would also like to extend my appreciation to the respondents which have
given me full cooperation in completing the questionnaires. Furthermore, I would
like to express my warm thanks to those who were directly or indirectly involved
within the process of completing this research.
Last but not the least, I sincerely thank to my beloved family members and friends for
their continuous support in all form, both physically and mentally which has resulted
in the completion of my research.
v
ABSTRACT
Cashless technology society does not mean the total absence of cash but it is a financial
environment that minimizes the use of physical cash by providing alternative channels
for making payments. In Malaysia, cashless transaction is still in infancy stage in 2016.
The objective of this study is to identify the drivers of cashless society among
consumer in Malaysia. This study uses the foresight process which include the
STEEPV analysis to identify the driver of cashless society technology. This study also
guided by the objectives of identifying the factors that influencing the use of cashless
payment technology, as well as the level adoption of cashless payment system among
Malaysian consumers. These objectives will be achieved through quantitative research
approach with the aid of survey questionnaires that were distributed to consumers in
Malaysia. Out of 346 respondents surveyed, a total of 152 responses were received,
reflecting a 44% of response rate. The understanding of these research objectives was
guided by relevant theories of technology adoptions such as Technology Acceptance
Model (TAM). Data collected will be quantitatively analyzed measuring the objectives
using a developed questionnaire. The findings of this study indicated that the level
adoption of cashless technology is medium and the PEOU and PU influenced the
adoption of cashless with high mean scores. These findings shed new knowledge and
understanding regarding the adoption of cashless technology among consumers in
Malaysia.
vi
ABSTRAK
Masyarakat teknologi tanpa tunai tidak bermaksud jumlah wang tunai yang tidak ada
tetapi ia adalah persekitaran kewangan yang meminimumkan penggunaan wang tunai
secara tunai dengan menyediakan saluran alternatif untuk membuat pembayaran. Di
Malaysia, urusniaga tanpa tunai masih di tahap awal pada tahun 2016. Objektif kajian
ini adalah untuk mengenal pasti pemacu masyarakat tanpa tunai di kalangan pengguna
di Malaysia. Kajian ini menggunakan proses berpandangan jauh yang termasuk
analisis STEEPV untuk mengenal pasti pemandu teknologi masyarakat tanpa tunai.
Kajian ini juga berpandukan kepada objektif mengenal pasti faktor-faktor yang
mempengaruhi penggunaan teknologi pembayaran tanpa tunai, serta tahap
penggunaan sistem pembayaran tanpa tunai di kalangan pengguna Malaysia. Objektif
ini akan dicapai melalui pendekatan penyelidikan kuantitatif dengan bantuan soal
selidik tinjauan yang diedarkan kepada pengguna di Malaysia. Daripada 346
responden yang ditinjau, sejumlah 152 respon diterima, mencerminkan 44% daripada
kadar tindak balas. Pemahaman objektif penyelidikan ini dipandu oleh teori-teori yang
berkaitan dengan adopsi teknologi seperti Model Penerimaan Teknologi (TAM). Data
yang dikumpul akan dianalisis secara kuantitatif mengukur objektif menggunakan soal
selidik yang dibangunkan. Penemuan kajian ini menunjukkan bahawa tahap
penggunaan teknologi tanpa tunai adalah sederhana dan PEOU dan PU mempengaruhi
penggunaan tanpa tunai dengan skor min yang tinggi. Penemuan ini menimbulkan
pengetahuan dan pemahaman baru mengenai penerapan teknologi tanpa tunai di
kalangan pengguna di Malaysia..
vii
TABLE OF CONTENT
TITLE i
DECLARATION ii
DEDICATION iii
ACKNOWLEDGEMENT iv
ABSTRACT v
ABSTRAK vi
TABLE OF CONTENT vii
LIST OF TABLES xi
LIST OF FIGURES xii
LIST OF APPENDICES xiii
LIST OF SYMBOLS AND ABBREVIATIONS xiv
CHAPTER 1 INTRODUCTION 1
1.0 Introduction 1
1.1 Research Background 1
1.2 Problem Statement 2
1.3 Research Question 3
1.4 Research Objectives 4
1.5 Significance of Study 4
1.6 Research Scope 5
1.7 Outline of Thesis 5
1.8 Conclusion 6
CHAPTER 2 LITERATURE REVIEW
2.0 Introduction 7
2.1 Research Design 7
2.2 Research Flow Chart 8
2.3 Research Instrument 9
2.3.1 Questionnaire 9
viii
2.3.1.1 Part A 10
2.3.1.2 Part B 10
2.3.1.3 Part C 10
2.4 Data Analysis 11
2.5 Data Collection 12
2.5.1 Primary Data 12
2.5.2 Secondary Data 12
2.6 Research Sampling 13
2.7 Conclusion 13
CHAPTER 3 RESEARCH METHODOLOGY
3.0 Introduction 14
3.1 Payment System in Malaysia 14
3.1.1 Large Value Payment System 15
3.1.2 Retail Payment System 15
3.2 Cashless Transaction 16
3.2.1 Level of Adoption of
Cashless Technology in Malaysian Consumers 17
3.2.2 Factors influencing the adoption of
Cashless Transactions 17
3.3 Technology Acceptance Model (TAM) 19
3.4 Cashless Society 21
3.4.1 Benefit of Cashless Society 21
3.4.2 Challenges of Cashless Society 22
3.5 STEEPV Analysis 23
CHAPTER 4 ANALYSIS AND DISCUSSION
4.0 Introduction 31
4.1 Quantitative Data Analysis 31
4.2 Survey Pre-test Procedure 32
4.3 Reliability Analysis 32
4.3.1 Pilot Test 33
4.3.2 Actual Study 34
4.4 Respondent Demographic Characteristic Analysis 34
4.4.1 Age 36
ix
4.4.2 Gender 37
4.4.3 Race 38
4.4.4 Education 39
4.4.5 Monthly Income 40
4.4.6 Employment Status 41
4.4.7 Knowledge of Cashless Payment 42
4.5 Descriptive Analysis 43
4.6 First Objective 43
4.7 Second Objective 44
4.7.1 Level of Adoption of Cashless
Technology among Malaysian Consumer 44
4.8 Third Objective 46
4.8.1 Factors That Influencing the
Use of Cashless Payment Technology among
Consumers in Malaysia 46
4.8.1.1 Analysis Based on
Technology Acceptance Model (TAM) 46
4.8.1.2. Perceived Ease of Use (PEOU) 46
4.8.1.3 Perceived Usefulness (PU) 47
4.9 Conclusion 49
CHAPTER 5 CONCLUSION AND RECOMMENDATION
5.0 Introduction 50
5.1 Discussion of the Findings 50
5.1.1 Second Objective 50
5.1.2 Third Objective 52
5.2 Summary of Research 53
5.3 Limitation of Study 54
5.3.1 Sample Size 55
5.3.2 Respondents Experience 55
5.3.3 Lack of cooperation 55
5.4 Further Research 56
5.5 Conclusion 57
5.6 Recommendation 57
REFERENCES 58
xi
LIST OF TABLES
2.1 Parts of Questionnaires 9
2.2 Description of Likert Scale 10
2.3 Data Analysis 11
3.1 Factors influencing the adoption of cashless transactions 18
3.2 Overall STEEPV Findings 23
3.3 Frequencies of STEEPV 29
3.4 Summary of STEEPV Factors 30
4.1 Cronbach's Alpha classification 33
4.2 Reliability Statistics for 10 Respondents 33
4.3 Reliability Statistics for 152 Respondents 34
4.4 Respondent Demographic Characteristic Analysis 35
4.5 Mean Score 43
4.6 The driver of Cashless Technology 45
4.7 Level of Cashless Technology Adoption 45
4.8 Average mean of Cashless Payment System Adoption 47
4.9 Perceived Ease of Use (PEOU) 47
4.10 Overall Perceived Ease of Use (PEOU) 48
4.11 Perceived Usefulness (PU) 48
4.12 Overall Perceived Usefulness (PU) 49
4.13 Average mean of PEOU and PU 53
5.1 Summary of Research Findings 54
xii
LIST OF FIGURES
2.1: Research Flow Chart 8
3.1: Payment System in Malaysia (Bank Negara Malaysia, 2017) 14
3.2: Technology Acceptance Model (TAM). 20
4.1: Pie Chart of Respondent by Age 36
4.2: Pie Chart of Respondent by Gender 37
4.3 Pie Chart of Respondents by Race. 38
4.4 Pie Chart of Respondents by Education. 39
4.5 Pie Chart of Respondents by Monthly Income. 40
4.6 Pie Chart of Respondents by Employment Status. 41
4.7 Pie Chart of Respondents by Knowledge of Cashless Payment 42
xiv
LIST OF SYMBOLS AND ABBREVIATIONS
FPTP - Faculty of Technology Management and Business
MIGHT - Malaysian Industry-Government Group for High Technology
SPSS - Statistical Package for the Social Sciences
STEEPV - Social, Technology, Economy, Environment, Politic and Value
BNM Bank Negara Malaysia
1
CHAPTER 1
INTRODUCTION
1.0 Introduction
The cashless society can be classified as a modern society that is moving
forward as replacing manual payments to cashless payment via plastic cards and
others. Many industries are starting to, or have already, put technology in place to
accommodate the growing trend towards smart mobile devices. The banking and
financial services industry has been exploring authentication of identity using bio-
metric verification for a number of years now and there are definite signs of a
gradual revolution in Western European markets. Through this too, it can
contribute to the development of a cashless society (Steve, 2006).
Malaysia is heading towards becoming a cashless society by 2050. According
to The Star (2017) Minister Khairy Jamaluddin said that Malaysian cannot run
away from how people will pay for things and how Malaysian will use cash and
make transactions in the future. The goal would be to reduce the physical
transactional element to payment so that it becomes easier for the user.
1.1 Research Background
A cashless society is a culture where no one uses cash where transactions being
made via direct transfers of monies from one account to another through mobile
banking and other electronic means. The cashless society envisioned refers to the
2
widespread application of computer technology in the financial system (Suberu et
al., 2015). According to Akinola (2012), cashless society is defined as a
community in which all payments are made through electronic means. The
instruments of cashless society are e-payment, e-banking and e-money. According
to Mastura Ishak (2016), the rapid rise of the growth of technology throughout the
world is a phenomena where money is regarded as part of the technology.
Cashless transaction consist of payment without using any cash. According to
Okechukwu, Chukwudi, & Chuks (2016), in a cashless society, currency and notes
are converted into data which are transmitted through telephone lines and satellite
transporters. As cited in Okechukwu et al., (2016), defines a cashless system as a
system of payment where transactions are performed without using coins or
banknotes but credit cards or electronic transfer of funds.
In general, e-payment is part of cashless society. E-payments in the context of
e-commerce refers to online transactions are conducted via the Internet Junadi &
Sfenrianto, (2015). The e-payment systems consists of online credit card
transaction, electronic wallet (e-wallet), electronic cash (e-cash), online stored
value systems, digital accumulating balance systems, digital checking payment
systems and wireless payment systems as cited in Junadi & Sfenrianto (2015).
The major cashless instruments in use in Malaysia are credit cards, internet
banking and IBG. Also in use, but of lesser importance, are charge cards and debit
cards (Basir, 2009). Olusola et al., (2013), suggested that the increased use of
cashless payment systems could lead to a cashless society.
This research is conducted mainly in examining the adoption of cashless
technology usage toward building cashless society among consumers in Malaysia.
As the rate of cashless transaction usage in Malaysia is still low and minimal.
1.2 Problem Statement
Before 1st January 2017, Malaysian are reminded to change their ATM Card into
PIN-enable card which eliminate signature payment system for better security
transactions. These activities are set in conjunction with the government’s
3
Economic Transformation Programme and Bank Negara Malaysia’s (BNM) vision
to transform Malaysia into a cashless society. Malaysian government’s push and
urge to reduce cash transactions as cashless transaction contributes concern to the
growth of Malaysia economy. The new policy by Bank Negara Malaysia (BNM)
on cashless system come with the objective of reducing robbery, high cost of
processing cash, revenue leakages, inefficient treasury management, promoting
economic development through financial intermediation, among others.
Though electronic revolution has commenced in Malaysia a long ago, but
Internet banking is still in its infancy stage (Haque, Tarofder, Rahman, & Raquib,
2009). Moreover, the exposure of internet banking adoption in Malaysia is
relatively lower and very little research has been done to understand the key
adoption determinants (Haque et al., 2009).
According to The Economic Transformation Programme (2013), Malaysia
remains largely a cash-based society, with 91per cent of transactions completed
using cash. The usage of cheques, e-money, credit card and Internet banking
meanwhile only account for 1.3 per cent, 4.7 per cent, 1.8 per cent and 0.6 per cent
of transactions respectively. Cashless technology adoption among consumer are
not at par with our Southern neighbors, Singapore. According to Mastura Ishak
(2016), cashless transaction in Malaysia is still in infancy. Singapore for example,
registered a 61% cashless transactions in 2016 compared to Malaysia with a mere
1% usage.
1.3 Research Question
This study is undertaken to achieve the following objectives:
1. What are the drivers of cashless technology?
2. What are the level of adoption of cashless technology among Malaysian
consumer?
3. What are the factors that influence the use of cashless payment technology
among consumers in Malaysia?
4
1.4 Research Objectives
The following research questions were also established:
1. To identify the drivers of cashless technology.
2. To identify the level of adoption of cashless technology among Malaysian
consumer.
3. To investigate the factors that influence the use of cashless payment
technology among consumers in Malaysia.
1.5 Significance of Study
The use of cashless society is crucial to facilitate a more efficient to improve the
payment system. This study is important to get the drives that give impact to the
public. Other than that, this research also offers better understanding on the
implementation of cashless society technology in Malaysia. It can also provide
benefits and contribute to:
I. The consumer
Consumer will have a better understanding about the impact of cashless
society and gain new knowledge regarding the adoption of cashless society
in Malaysia.
II. The government
The government can come with a different idea to attract people in using
cashless transaction. It also help to formulate plans, programs and
strategies geared in order to attract more consumer towards the
improvement of building cashless society in Malaysia. It also beneficial to
banks and the government for use in the design and realization of banking
services that are appropriate to the needs of consumers and can indirectly
promote the cashless society in Malaysia.
5
III. Researchers
Future researchers may be able to conduct more in-depth researches based
on the data collected and avoid errors that might occur as this research is
considered a small scaled research. Besides, this study can be a reference
on cashless society in Malaysia for researchers in the future.
1.6 Research Scope
The research focused on determining the drivers of cashless technology as well as
the future trends of cashless society, level of adoption and factors influencing the
adoption of cashless society. Research conducted among consumers in Johor,
Malaysia.
1.7 Outline of Thesis
Chapter 1: Introduction
This chapter describes the introduction of relevant research. Research discussed in
detail followed by a statement of the problem. This was followed by the research
questions, research objectives, significance of the research is to give support to this
study. In this study also describes the elements that are important in the study.
Chapter 2: Literature Review
Chapter two discusses the literature review. The literature review is to gather
important information regarding the research topic through the previous studies.
This chapter provides evidence includes definitions of important terms related to
the research done and a description of the studies that have been carried out.
6
Chapter 3: Research Methodology
Research methodology chapter gives a detailed explanation on the implementation
of the study as a whole and in stages to achieve the objectives and goals of the
study as outlined. It describes the methods used for data collection and data
analysis.
Chapter 4: Data Analysis and Discussion
This chapter explains how data derived from quantitative methods of analysis. The
data obtained were analyzed and presented in the form of content analysis. Data
are also described to facilitate the understanding of each findings.
Chapter 5: Conclusions and Recommendations
This chapter is the last chapter that discussed about the recommendation and
conclusion. This chapter also summarizes the objectives and conclude the overall
study.
1.7 Conclusion
First chapter describes briefly and an overview of the study to be carried out. The
goal of this study is to gain new knowledge about the adoption of cashless society
in Malaysia. This chapter also briefly describes the elements that will be used in
the study to provide an initial understanding regarding the study. Such information
includes the introduction, research background, problem statement, research
questions, research objectives, and significance of research
CHAPTER 2
RESEARCH METHODOLOGY
2.0 Introduction
This chapter discusses about the methodology that been conducted for this study. It
covers on the whole research process which is done to achieve the objectives. In this
research, the quantitative methods were used. Research methodology is the method
used as guidelines to collect information and data for the study. The key areas include;
research design, target population, sample of the study, data collection instruments,
procedures and data analysis as well as a flow of process for this study as shown in
Figure 2.1.
2.1 Research Design
Quantitative research methods were employed in this research in order to achieve the
objectives, which includes the usage of a questionnaire survey to collect quantitative
data.
15
PHASE 1
Research Title
Problem Statement, Research Questions,
Research Objective, Significance of Study,
Scope of Study and Research Methodology
2.2 Research Flow Chart
Figure 2.1: Research Flow Chart
PHASE 3
Data collection
Primary data
Information collected through
questionnaires
(Consumers in Parit Raja, Batu
Pahat)
Secondary data
Literature Review
-Printed Material (Journals, Articles,
Newspapers and related resources)
-Electronic Media (Official Website)
PHASE 4
Data Analysis and Discussion
PHASE 5
Conclusion and suggestion
PHASE 2
Methodology
Quantitative methods
Quantitative methods
16
2.3 Research Instrument
There are a number of research instruments to collect data specific studies. In this study
the chosen instrument is the questionnaire method. Selection of the instrument is
important to ensure that the data achieved the objectives of the study. Questionnaires
were selected for use in this study due to it convenience. Furthermore, questionnaire
also obtain accurate information on the study population. Through this method,
respondents answered questions that are related to the topics to be studied in this
research.
2.3.1 Questionnaire
The questionnaire consisted of three parts which is the respondent demographics,
followed by questions regarding the research objectives. The data collected used to
facilitate the process of analyzing data.
Table 2.1: Parts of Questionnaires
PARTS
ITEM TOTAL QUESTIONS
A Respondents demographic
characteristics 7
B
Level of adoption of cashless
technology among Malaysian
consumer.
10
C
Factors that influencing the use of
cashless payment technology among
Malaysian consumers
5
Table 2.2: Description of Likert Scale
17
Scale Description
1 Strongly Disagree
2 Disagree
3 Partially Disagree
4 Agree
5 Strongly Agree
Questionnaires were selected for use in this study because it is more convenient and
easy. Furthermore, it can obtain accurate information on the study population. Through
this method, respondents will answer questions that are related to the topics to be
studied in this research.
2.3.1.1 Part A: Respondents demographic characteristics
This section contains questions related to respondents' information such as full name,
age, sex, race, occupation, service groups, workplace and monthly income. This
information is to identify the characteristics of the respondents.
2.3.1.2 Part B: Level of adoption of cashless technology among Malaysian
consumer.
Part B contains questions to measure the level of adoption of cashless technology
among Malaysian consumer. These include whether the respondent is involved in the
use of cashless payment or not. Through this section, the information will be received
is about the level of adoption of cashless technology in Malaysia.
2.3.1.3 Part C: Factors that influencing the use of cashless payment
technology among Malaysian consumers.
Part C are questions about the factors that affect the use of the cashless technology
among consumers in Parit Raja. Consist of two factors, PEOU and PU.
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