E-wallet

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E-Wallet Adoption and Usage: Insights from Recent Research

Introduction to E-Wallets

E-wallets, also known as digital wallets, have revolutionized the way transactions are conducted globally. These digital payment instruments allow users to store money electronically and make transactions through various electronic devices such as smartphones, laptops, and computers. The convenience and efficiency of e-wallets have made them increasingly popular, especially among younger, tech-savvy generations.

Factors Influencing E-Wallet Adoption

Perceived Usefulness and Ease of Use

The Technology Acceptance Model (TAM) is frequently used to understand the factors influencing e-wallet adoption. Studies have consistently shown that perceived usefulness is a significant predictor of e-wallet adoption . Users are more likely to adopt e-wallets if they find them useful in their daily transactions. Additionally, perceived ease of use also plays a crucial role, as users prefer systems that are easy to navigate and operate.

Social Influence and Performance Expectancy

In developing countries like Malaysia, social influence and performance expectancy are critical factors driving e-wallet adoption. Users are influenced by their social circles and the perceived benefits of using e-wallets, such as convenience and efficiency. The Unified Theory of Acceptance and Use of Technology (UTAUT2) model highlights these factors, emphasizing the importance of social influence and performance expectancy in the adoption process.

Promotional Campaigns and Rewards

Promotional campaigns and rewards such as cashback and loyalty points are significant motivators for e-wallet usage. Users are attracted to these incentives, which can sometimes contradict traditional adoption factors like perceived usefulness. These promotional strategies are essential for e-wallet providers to attract and retain users in a competitive market.

Barriers to E-Wallet Adoption

Security Concerns

Security concerns are a major barrier to e-wallet adoption. Users are often worried about the safety of their financial information and the potential for fraud. Although some studies have found that perceived security does not significantly impact user satisfaction, it remains a critical area for improvement to ensure customer trust and loyalty.

Merchant Adoption and Government Regulations

Low rates of merchant adoption and stringent government regulations also hinder the widespread use of e-wallets. Without a critical mass of merchants accepting e-wallet payments, users find it less convenient to rely solely on digital wallets for their transactions. Additionally, regulatory frameworks need to evolve to support the growth and development of e-wallet systems.

E-Wallet Usage During the COVID-19 Pandemic

The COVID-19 pandemic has significantly influenced e-wallet usage. The need for contactless payments to maintain social distancing has driven many users to adopt e-wallets. Studies have shown that personal safety concerns during the pandemic have led to increased e-wallet usage, with consumer self-efficacy being a pivotal factor for continued use. This trend highlights the importance of health-related factors in the adoption and sustained use of e-wallets during global health crises.

Post-Adoption Behavior

Continuous Intention to Use

Post-adoption behavior is crucial for the long-term success of e-wallets. Factors such as satisfaction, trust, and perceived usefulness significantly impact users' continuous intention to use e-wallets. E-wallet providers need to focus on enhancing these aspects to ensure customer retention and loyalty in a competitive market.

Technological Readiness

Technological readiness also plays a vital role in the continuous use of e-wallets. Users who are confident in their ability to use new technologies are more likely to continue using e-wallets. This readiness is influenced by factors such as performance expectancy, price value, and facilitating conditions.

Conclusion

E-wallets have become an essential part of the digital payment ecosystem, offering convenience and efficiency to users. While factors like perceived usefulness, ease of use, and promotional incentives drive adoption, barriers such as security concerns and low merchant adoption need to be addressed. The COVID-19 pandemic has further accelerated e-wallet usage, emphasizing the importance of health-related factors. For sustained success, e-wallet providers must focus on enhancing user satisfaction, trust, and technological readiness. As the digital payment landscape continues to evolve, e-wallets are poised to play a significant role in shaping the future of transactions.