A Study On Factors Affecting E-Wallet Usage

ELK ASIA PACIFIC JOURNAL OF MARKETING & RETAIL MANAGEMENT
ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2018; Volume 9 Issue 4 (2018)
www.elkjournals.com
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A STUDY ON FACTORS AFFECTING E-WALLET USAGE

Gautam Parmar Dr. Raju M. Rathod
ASPEE Agribusiness Management Institute Professor, G.H. Patel P.G. Institute of Business
Assistant Professor, Navsari Agriculture Management, Vallabh Vidhyanagar
University, Navsari Email: [email protected]
Email Id: [email protected]
ABSTRACT
The usage of E-Wallet is increasing rapidly in India. There are various growth drivers which plays
a significant role in increasing the penetration of E-wallet like smartphone and internet
penetration, 4G technology. At present, mobile payments form a very small part of the overall
digital payments industry in India. However, the contribution from phones and tablets are
expected to increase to 30 per cent by 2020. The present study was conducted with the goal of
studying factors affecting E-wallet usage. The Primary data have been collected through
structured questionnaire to meet objectives by applying convenience sampling method. The
exploratory factor analysis was employed to extract factors which yielded three factors namely
perceived benefits and convenience, Experience Expectation and perceived risk Findings of the
study would be helpful to design marketing strategy to increase the adoption of E-wallet among
people.
Keywords: E-wallet, Digital Payments, Perceived Benefits of E-wallets, E-wallet Usage
INTRODUCTION year 2015, compared to US$ 2.04 Trillion

(INR 124.5 Trillion) in 2014.According to
India is traditionally a cash-based economy,
IMAP 2016 report presently (2015), cash
with the value of physical currency in
transactions account for 78% of all
circulation estimated to be over 11% of GDP,
transactions in the country. But, the
one of the highest among emerging
percentage of cash for transactions has seen a
economies (Hodiwalla F, Aneja, 2016).
rapid decline in the past few years in India. In
According to Assochem report, 2016 The
2010, the percentage of cash in all payments
size of the Indian economy was estimated at
was 89% compared with 78% in 2015. E
US$ 2.07 Trillion (INR 132.7 Trillion) for the
payment is a subset of an e-commerce
1
transaction to include electronic payment for

buying and selling goods or services offered ADOPTION AND PERCEPTION OF E-
through the Internet. (Deepak Mathur, 2015) WALLETS
E-wallet is an online prepaid account where According to Assochem report, 2016 The
one can stock money, to be used when Indian m-wallet market is growing
required. E-wallets are here to replace tremendously, backed by factors such as the
physical wallets in your pockets. (Jocil, rise in the usage of smart phones, increased
2017). The terms “mobile wallet” and “e- penetration of mobile internet in the country
wallet” are specific implementations of the and increasing disposable incomes.
digital wallet for the mobile device and for According to BCG Google report 2016,
the desktop/browser environment, Supported by a favorable regulatory
respectively. (Comviva, 2016). A digital environment and coupled with a young
wallet allows users to make electronic demography eager to try and test new digital
commercial transactions swiftly and technologies, the Indian payment industry is
securely. It functions much like a physical bound to grow multi-fold in the coming
wallet. (Majid Taghiloo et.al, 2010). Digital decade. According to Stephen P Robbins,
wallets can be used in conjunction with Perception is a process by which individuals
mobile payment systems that allow organize and interpret their sensory
customers to pay for purchases with their impressions in order to give meaning to their
smart phones. (Deepak Mathur, 2015). environment and schiffman defines it as “the
According to Assochem report, 2016 Mobile process by which an individual selects,
wallet service is estimated to contribute 30% organizes, and interprets stimuli into a
share in the mobile payment volume meaningful and coherent picture of the world.
transactions in FY 2017. Mobile wallet
transactions in India have grown METHODOLOGY
approximately 20 times to reach INR 206 The present research aims to study factors
billion in FY 2016 from INR 10 billion in FY affecting E-wallet usage. To structured
2013. In FY 2016, the total m-wallet questionnaire was used to collect data from
transaction was 0.6 billion; and it is expected respondents which contains demographic
to reach 260 billion by FY 2022, growing at details of respondents and research questions.
a CAGR of 163%. The questionnaire was containing 18
2
statements designed to investigate factors HBo= Adoption of the e-wallet is

affecting towards e-wallet usage. Responses independent of occupation
were obtained on a five-point Likert-type HB1= Adoption of the e-wallet is
rating scale (strongly agree to strongly dependent on occupation
disagree). The researchers have developed HCo= Frequency of using E-wallet is
the scale by reviewing literature investigate independent of occupation
factors affecting towards e-wallet usage. To HC1= Frequency of using E-wallet is
assess for internal consistency, Cronbach’s dependent on occupation
alpha reliability coefficient was calculated
for the 18 statements. A Cronbach’s Alpha RESULT AND DISCUSSION
value obtained was 0.912, which indicate the
The statistical tools employed for present
response scale had a good and acceptable
study are frequencies, percentage, chi-square
internal consistency. The convenience
test and exploratory factor analysis.
sampling method was employed for the
Exploratory factor analysis using principal
present study and sampling size was kept 99
component analysis approach was used to
respondents for present study. Total 99
determine the most important variables from
respondents’ data were obtained with the
a large number of variables in the set of data
help of online survey. The descriptive
that affect e-wallet usage.
statistics, chi square test and exploratory
The tables 1 shows demographic profile of
factor analysis are used to analyze the
respondents, for the present study 99
collected data.
respondents was surveyed and out of those 78
To check out the association between
respondents was male and 21 respondents
demographic factors and adoption of e-wallet
were female. The average age of respondents
the Chi-square tests were used. For testing
was found 26 years ranging from 19 years to
Chi-Square following null hypothesis were
60 years. The majority of respondents (65)
constructed.
studied up to post graduate followed by 26
HAo= Adoption of the e-wallet is
respondent studied up to under graduate
independent of education level
level. Most of the respondents were either
HA1= Adoption of the e-wallet is
students (64) or service class (30) whereas 2
dependent on education level
respondents were doing business. The 39
3
respondents were spending less than 250 Rs

on mobile, 33 respondents were spending RELIABILITY TEST ALPHA
250-500 Rs on mobile whereas 27 The respondents were asked to respond on 5
respondents were spending more than 500 Rs point Likert scale for 18 statements to
on mobile. The average time spends on investigate factors affecting e-wallet usage.
mobile by respondents found 3.42 hours per To check reliability of the scale, As shown in
day. Out of the 99 respondents 81 table no 5 cronbach’s Alpha was calculated
respondents were using e-wallet whereas 18 and it was found 0.912 for 18 items. The
respondents were not using e-wallet. reliability test Alpha was developed by Lee
As shown in table no 2, the chi square test Cronbach in 1951 to provide a measure of the
found significant at 5 % significant level internal consistency of a test or scale; it is
which shows the adoption of e-wallet is expressed as a number between 0 and 1.
dependent on education level. Thus, it is (Tavakol et al. 2011). As a rule of thumb the
indicating that adoption of e-wallet is value greater than 0.7 is good and acceptable.
influenced by education of person. The For the present study Cronbach's Alpha
outcome of the test is in line with, “The more Based on Standardized Items obtained 0.912.
educated a person is, the higher will be So the data are reliable for further analysis.
his/her degree of acceptance of e – banking.
(Odumeru, 2012)” and “Higher levels of The Bartlett’s test of Sphericity and Kaiser
education were associated with higher Meyer –Olkin (KMO statistics) measure of
probabilities of being in the technophile sample adequacy were used to assess the
group. (Jeanne M. Hogarth, 2008)”. As suitability of data for carrying out the factor
shown in table no 3, the chi square test was analysis. The value of Kaiser-Meyer-Olkin
not found significant at 5 % significant level, Measure of Sampling Adequacy test is
which shows the adoption of e-wallet is accepted greater than 0.6. (Malhotra,2007)
independent of occupation. So adoption of e- For the present study the Kaiser-Meyer-Olkin
wallet is not influenced by occupation of Measure of Sampling Adequacy value
person. As shown in table no 4, the chi square obtained is 0.888 and Bartlett's Test of
test found significant at 5 % significant level Sphericity found significant. So, the factor
which shows there is association between analysis can be performed for the present
frequency of using E-wallet and occupation data. (Table no.6)
4
usefulness according to Davis (1989) can be

EXPLORATORY FACTOR ANALYSIS defined as the “degree to which the user
Respondents were asked to answer 18 believes that using a system would enhance
statements using 5-point Likert scales where their job performance.
1 was strongly agree and 5 was strongly The second factor can be named as
disagree to investigate factors affecting e- Experience Expectation due to high loading
wallet usage. The principal component factors the statements associated with the
extraction performed where the eigenvalue Experience Expectation. The factor explains
greater than 1 was considered. Varimax with 14.067 % of total variance having factor
Kaiser Normalization rotation method was loading for the statements are ranging from
employed in this analysis. The Rotated 0.765 to 0.694.
Component Matrix was presented sorted by The third factor can be named as Perceived
size and the coefficients were suppressed risk due to high loading factors the statements
having value below 0.4. The factor analysis associated to the Perceived risk. The factor
yielded 3 factors were which explains 63.272 explains 13.557% of total variance having
% of total variance as shown in below table factor loading for the statements are ranging
no 7. from 0.876 to 0.778.Perceived risk is defined
The factor analysis yielded three factors as an assessment of uncertainties or lack of
namely perceived benefits and convenience, knowledge about the distribution of potential
Experience Expectation and perceived risk outcomes. (March, 1978)
(Table no 8).
The first factor can be named as perceived The outcome of the study were in line with
benefits and convenience due to high loading Technological Acceptance model (TAM)
factors to the statements associated to the considers which perceived usefulness (PU)
benefits and convenience which explained and perceived ease of use (PE) as two major
35.648 % of total variance having factor factors influencing a user’s attitude toward
loading for the statements are ranging from using technology (ATT) (Devis et.al,1989).
0.851 to 0.580. Perceived usefulness is Consumer acceptance was determined by
defined as “the degree to which a person four factors: perceived use, perceived ease of
believes that using a particular system would use, perceived risk, and compatibility
enhance his or her performance” Perceived (Chen,2008), perceived usefulness and ease
5
of use are key determinants toward consumer CONCLUSION AND MANAGERIAL

acceptance and that consumers’ attitudes IMPLICATIONS
toward accepting mobile wallets are strongly The e-wallet is becoming popular in present
influenced by perceived security and era. The present study was conducted to
trust.(Shin,2009). Perceived use, trust, study factors affecting e-wallet usage. The
expressiveness and perceived ease of use exploratory factor analysis approach was
play a crucial role in facilitating adoption of carried out to explore factors affecting e-
mobile payment solution (Sanjeev wallet usage and factor analysis yielded three
Padashetty, 2013). Adoption of M-wallet has factors namely perceived benefits and
increased due to three main factors convenience, Experience Expectation and
convenience, ease of use, compulsion after perceived risk. Out of the surveyed
demonetization.(Teena Wadhera et.al, respondents 81.2 percent were using the e-
2017).Perceived usefulness, perceived ease wallet. The e-wallet market players should
of use, consumer awareness and perceived keep in mind these factors while designing
risk are the important determinants of mobile the marketing strategies. The market players
banking adoption (Rahmath Safeena, should focus on benefits and convenience by
2012).The security issues, less technical e-wallets with ease of use, the players may
knowledge and unavailability of internet in design positioning on these grounds. The
many places is still a major drawback for perceived risk is the important factor, the
major uses of digital wallets in India. (Saini, market players try to take steps which
2017) overcome the effect of risk. The education
plays an important role in adoption of e-
INTERNAL CONSISTENCY wallets so, the market players can take benefit
The internal consistencies were checked of that in segmentation, targeting and
using Cronbach's Alpha for three factors positioning of services it may helpful in
extracted by factor analysis. The Cronbach's designing the promotional programme.
Alpha for perceived benefits and
convenience, Experience Expectation,
perceived risk found 0.931, 0.729 and 0.818 FUTURE REASEARCH
respectively. The E-wallets are penetrating in Indian
market rapidly. The future research can be
6
carried out the consumer behaviour toward Acceptance of Information Technology. MIS
the e-wallet. The research may carried out for Quarterly, 13 (3), pp. 319-340.
the improvement of the e-wallet services and
various factors affecting the e-wallet usage Ho, S. M. S., and Ng, T. F. V., Customers’
satisfaction. Risk Perceptions of Electronic Payment
Systems,
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http://www.financialexpress.com/industry/te
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chnology/emergence-of-e-wallets-in-india-
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TABLES AND FIGURES
TABLE: 1 Demographic profile of respondents

Gender
Frequency Percent
Male 78 78.8
Female 21 21.2
Total 99 100.0
Average Age of Respondents (In Years)
Average Age 26 Years
Education
Frequency Percent
HSC 1 1.0
UG (Under Graduate) 26 26.3
PG (Post Graduate) 65 65.6
Others 7 7.1
Total 99 100.0
Occupation
Frequency Percent
Students 64 64.6
Service 30 30.3
Business 2 2.0
Others 3 3.0
Total 99 100.0
Monthly Expenditure on Mobile
9
Frequency Percent
Less Than Rs.250 39 39.4
Rs.250-Rs.500 33 33.3
More than Rs. 500 27 27.3
Total 99 100.0
Average time spend on mobile by respondents
Average Usage 3.42 Hours
Use of E-wallet
Frequency Percent
Yes 81 81.8
No 18 18.2
Total 99 100.0
TABLE 2: Chi square test for Adoption of e-wallet and education level
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 9.292 3 .026*
5 % significant level
TABLE 3: Chi square test for Adoption of e-wallet and occupation
Chi-Square Tests
Pearson Chi-Square 1.689 3 .639
TABLE 4: Chi square test for frequency of using E-wallet is independent of occupation
Chi-Square Tests
Pearson Chi-Square 25.596 15 .042*
TABLE: 5 Reliability test (Cronbach alpha)
10
Reliability Statistics
Cronbach's Alpha N of Items
.912 18
TABLE 6: KMO and Bartlett's Test

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .888
Approx. Chi-Square 1038.055

Bartlett's Test of Sphericity Df 153
Sig. .000
TABLE: 7 Total Variance Explained

Total Variance Explained
Compone Initial Eigenvalues Extraction Sums of Rotation Sums of Squared
nt Squared Loadings Loadings
Tota % of Cumulativ Tota % of Cumulativ Tota % of Cumulativ
l Varianc e% l Varianc e% l Varianc e%
e e e
7.94 7.94 6.41
1 44.158 44.158 44.158 44.158 35.648 35.648
8 8 7
2.34 2.34 2.53
2 13.008 57.166 13.008 57.166 14.067 49.715
1 1 2
1.09 1.09 2.44
3 6.106 63.272 6.106 63.272 13.557 63.272
9 9 0
4 .872 4.844 68.116
5 .775 4.304 72.420
6 .651 3.615 76.035
7 .620 3.445 79.479
11
8 .589 3.274 82.754

9 .545 3.029 85.783
10 .505 2.808 88.591
11 .394 2.190 90.781
12 .336 1.868 92.649
13 .297 1.651 94.300
14 .268 1.486 95.786
15 .249 1.383 97.170
16 .200 1.108 98.278
17 .164 .910 99.188
18 .146 .812 100.000
Extraction Method: Principal Component Analysis.
TABLE 8: Rotated Component Matrix

Rotated Component Matrixa
Component
1 2 3
I am well aware with E-wallet .851
E-wallets are fast way of doing transaction .806
E-wallets are user friendly .800

E-wallet is easy to operate .793
Perceived Benefits and
E-wallet provides the convenience. .734 Convenience
E-wallet saves my time .713
E-wallet gives flexibility for transaction at
.708
any time
E-wallet are easy than traditional method .703
12
I don’t need any training for operating e-

.676
wallet
E-wallet is safe .655
I will strongly recommend others to use E-
.583 .469
wallet
E-wallet saves my money .580 .427
E-wallet use is status .765
E-wallet usage is fun .710 Experience Expectation
E-wallet helps in controlling my transaction .694
E-wallet has chance of fraud .876

E-wallet is risky .814
Perceived Risk
E-wallet allows unauthorized person to access
.778
my personal information
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 5 iterations.
TABLE 9: Internal Consistency

S.N Factors No of Items Cronbach's
Alpha
1 Perceived Benefits and Convenience 12 0.931
2 Experience Expectation 3 0.729
3 Perceived Risk 3 0.811
13
List of Tables
Sr.N Table Description

Number
1 Table: 1 Demographic profile
of respondents
2 Table: 2 Chi square test for

Adoption of e-wallet
and education level
Adoption of e-wallet
and occupation
frequency of using E-
wallet is independent
of occupation
5 Table: 5 Reliability test
(Cronbach alpha)
6 Table: 6 KMO and Bartlett's
Test
7 Table: 7 Total Variance

Explained
8 Table: 8 Rotated Component
Matrix
9 Table: 9 Internal Consistency
14

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ELK ASIA PACIFIC JOURNAL OF MARKETING & RETAIL MANAGEMENT

ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2018; Volume 9 Issue 4 (2018)