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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 by enabling users to make electronic commerce transactions quickly and securely through various electronic devices such as smartphones, computers, and tablets. Despite their growing popularity, the adoption and usage of e-wallets vary significantly across different regions and demographics.
Factors Influencing E-Wallet Adoption
Perceived Usefulness and Ease of Use
Research consistently highlights perceived usefulness as a critical factor influencing the intention to use e-wallets. The Technology Acceptance Model (TAM) is frequently employed to understand this phenomenon, showing that users are more likely to adopt e-wallets if they find them useful and easy to use . Additionally, the Unified Theory of Acceptance and Use of Technology (UTAUT2) model reveals that performance expectancy, price value, and facilitating conditions significantly impact e-wallet adoption.
Consumer Incentives and Rewards
Contrary to traditional adoption factors, actual usage data indicates that consumers are often attracted to e-wallets due to incentives such as cashback offers and reward points. This suggests that promotional campaigns and a user-friendly interface are crucial for the success of e-wallet business models.
Psychological and Environmental Factors
The COVID-19 pandemic has also played a significant role in e-wallet adoption. The Health Belief Model (HBM) and Technology Continuous Theory (TCT) show that personal safety concerns and the need for social distancing have driven consumers to use e-wallets more frequently. However, the continued use of e-wallets is largely influenced by consumer self-efficacy and the perceived value and benefits of these services.
Challenges and Barriers to E-Wallet Adoption
Low Merchant Adoption and Infrastructure Issues
One of the significant barriers to widespread e-wallet adoption is the low rate of merchant adoption. Without a critical mass of merchants accepting e-wallet payments, consumers are less likely to use these services regularly. Additionally, infrastructure issues, particularly in developing countries, pose a significant challenge.
Security Concerns
Security remains a critical concern for many potential e-wallet users. While e-wallets are generally considered safer than carrying cash, issues such as data breaches and cyber-attacks can deter users from adopting these digital payment methods.
Regional Insights and Case Studies
Emerging Economies
In emerging economies, the adoption of e-wallets is influenced by various factors, including smartphone and internet penetration. However, there is a lack of consensus on the predictors influencing e-wallet adoption in these regions. Future research is needed to explore inhibitors and incorporate external environmental and psychological factors.
Malaysia
Malaysia presents an interesting case study for e-wallet adoption. Despite government efforts to promote a cashless society, e-wallet adoption has not reached high-scale levels. Studies suggest that while Malaysians are confident in the technology, factors such as performance expectancy and social influence play significant roles in their adoption decisions. Additionally, SWOT analysis reveals that while there are strengths and opportunities for e-wallets in Malaysia, challenges such as infrastructure limitations and security threats need to be addressed.
Conclusion
E-wallets offer a promising alternative to traditional payment methods, driven by factors such as perceived usefulness, consumer incentives, and the need for contactless transactions during the COVID-19 pandemic. However, challenges such as low merchant adoption, infrastructure issues, and security concerns must be addressed to achieve widespread adoption. Future research should focus on understanding the inhibitors to e-wallet adoption and exploring the role of psychological and environmental factors in influencing consumer behavior.
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