The purpose of this paper is to study the potential users’ intentions to adopt the smart card-based electronic money. This paper explored and analysed what factors are affecting the adoption intentions of the electronic money and, among them, which factors are relatively more important.
The (smart card-based) electronic money is a new payment instrument, which is expected to replace physical notes and coins with digitized monetary value information. But despite of huge initial expectation on the future of electronic money to ultimately implement the so-called cashless-society, the actual market reactions have not been favorable to it though. This paper starts from the point that such disappointing consequences are due to the lack of consideriation for the potential users during its introduction phases.
The (smart card-based) electronic money is defined in this paper as “a payment instrument that stores monetary value on the smart card of users’ possession.” It was compared with other types of electronic payment systems such as software-based electronic money, credit and debit cards in terms of relative advantages and disadvantages. Then, the characteristics of electronic money were analysed further, by comparing its two conceptual forms-cash model and pre-paid one each other. Then the current status of electronic money in Korea and other countries was looked around.
Based on the arguments that the electronic money is a technological innovation as well as an innovation in payment methods, theoretical researches on the causes and processes of the innovation adoption and diffusion were briefly reviewed. Reviewing the Technology Acceptance Model (TAM; Davis, 1989) and the theory of diffusion of innovations (Rogers, 1995), it was identifed that potential users’ perception on the new innovation plays an important role in its adoption and diffusion.
A conceptual model to explain the potential users’ intentions to adopt the electronic money was proposed. The model is composed of five anticidents(user perceptions), namely, usefulness, compatibility, complexity, perceived risks and observability, mainly derived from previous researches but the contents of which were adapted to the specific electronic money context. Sample data were collected through a survey and the model was estimated and validated by the Structural Equation Modeling (SEM) technique. The estimated model was evaluated as quite relavant in terms of overall fit and its explanatory power. The directions (signs) of all path coefficients in the structural model were exactly matched with the corresponding hypotheses, although some of them were proved to be insignificant
As a reuslt, it was identified that usefulness, compatibility, complexity and observability are significant factors influencing the electronic money adoption intentions. Among these factors, compatibility and observability were identified to be relatively more important than others. In addition, it was found that usefulness is significantly influenced by other factors such as compatibility and preceived risks rather than exists independently.
