Adoption of e-Payment By Thai Consumers

1. Adoption of e-Payment By Thai Consumers Sittikorn Direksoonthorn

2. What is a Bank? Surplus-spending individuals and institutions Deposits Bank Positive-spread (Expected-yield) Loan-interest Loans Deficit-spending individuals and institutions Bank A financial intermediary accepting deposits and granting Loans; offers the widest menu of services of any financial institution/individual.

3. Service Areas in the Modern Bank The credit function (loan) The payments function (transactions) The thrift function (saving) The insurance function (risk management) The Modern Bank The security brokerage (trading ) function The investment/financial planning function The real estate and community development function The investment banking function (security underwriting ) The merchant banking function (temporary stock investment for M&A ) The cash management function

4. Payment Services Business The credit function (loan) The payments function (transactions) The insurance function (risk management) The thrift function (saving) The Modern Bank The security brokerage (trading ) function The investment/financial planning function The real estate and community development function The investment banking function (security underwriting ) The merchant banking function (temporary stock investment for M&A ) The cash management function

5. The Case of Thailand’s e-Payment • Thailand is a developing country or emerging economy where lag behind in the e-payment usage when compared with the best practice-group; Finland, Denmark, the USA, the UK and Australia (Pariwat and Hataiseree, 2006) • Having the outstanding of e-Payment usage compare with some ASEAN countries (Thailand = 11*, Malaysia = 6* and Indonesia = 0.4 *(* Transaction per Person per Year in 2006) • Having the consistently upward trend of Fund Transfer via ATM (ORFT); 2% in 2001 to 9% in 2006 = 50 million Trans.) • Looking for the better use of technology to move low-value transactions away from branch counter to e-Channel (Virtual Bank Branch) • Fee income less than half of those investing in capital. • Highly Cost of the investing and subsidizing 1.16 billion baht for payment market

6. Problem Statement & Contribution • Highly Fixed cost and variable cost of Thailand’s payment market were estimated at 1.16 billion bath (Bank of Thailand Cost survey in 1998) • Fee receives accounted for less than half of investing • Having a huge investing and subsidizing cost in e-payment development by Thai Banks • Highly need more return on Economic of scale and scope • Highly need more effective strategies to attract Thai consumers to accept e-payment as a common. • This study deal with Thai consumer’s recent experiences in order to move a greater use of e-payment by reflecting more understanding factors’ adoption; Psychological and Demographical profiles

7. Research objectives • To investigate whether and how Thai consumer’sdemographic profileandpsychological factorsrelated to the adoption of e-payment channels • To explore the different type of Thai consumer’s profiles that prefers in different e-payment channel

8. Literature Reviews • Thailand e-Payment Case Review • Psychological Factors influencing the adoption of e-Payment channel • The relationship of Adoption Factors and Demographical Profile; Gender, Age, Household income, Educational, and Occupation • Type of e-Payment service channels • Automatic Bill Payment (Direct debit) • ATM • Phone Banking • PC banking

9. Theoretical Framework from the Literatures • Theory of Acceptance Model by Davis (1989): Perceived usefulness and Perceived ease of use • Diffusion of Innovative adoption by Rogers (1962): Relative advantage, Compatibility, Simplicity / Complexity, Observability, and Trialability • There are many researchers have incorporated pieces of Rogers and Davis to identify the adoption characteristic. • There are strongly relationship between the Adoption Factor and Demographic Profile • The empirical work of Akinci et. al. (2004) had provided an extensive and excellent review of this literature to identify the psychological factors that related to e-banking and e-channel adoption.

10. Research Framework • Psychological Factors to adoption • Ease of use • Transaction security • Transaction accuracy • Speediness • Convenience • Time utility • Provision of different personal services • Social desirability • Usefulness • Economic benefits • User involvement 1. What kind of relationship factors of demographics’ profile and psychological influence to Thai consumers adoption in each e-Payment channel? • Adoption of e-Payment Channel by Thai Consumer • Automatic Bill Payment (Direct debit) • ATM • Phone Banking • PC banking • Demographic Profile to adoption • Gender • Age • Household income • Educational • Occupation 2. What different type of Thai consumer prefer to use in each of e-Payment channel?

11. The Hypothesis • e-Payment adoption and demographic factors • Gender: Individual males than females are more likely to adopt e-payment • Age: Individuals with mid-age are likely to adopt e-payment • Education: Individuals with higher levels of education are more likely to adopt e-payment • Occupation: Individual with high-level of occupation are more likely to use e-payment • e-Payment channel adoption and psychological factors • There are positive associations between the adoption of e-payment channel and the belief (psychological factors) about extent to which the e-Payment possesses the 11 specific attributes identified. • These different e-payment channels lead to null hypothesis • These are no difference in the characteristic associated with the adoption of ABP, ATMs, Phone banking and PC banking.

12. Research Methodology • Quantitative research in form of questionnaire survey • Identify 11 psychological factors with Top-5 Thai bank • The questionnaire consist of 3 parts • Part I: Psychological factors (5 likert scale), to measure the belief of Thai consumers toward e-payment channel • Part II: Proxy 10-service payment to measure the reflection of how often the respondents use this entire e-payment channel (a constant sum of 100 points to each channel) • Part III: Demographical record of respondents information • For any case which respondent have not used a particular before, the questions about the psychological before will be treated as having missing value and the level of adoption would have a zero value.

13. 10-Service proxy (Sum of 100 points) • Payment of credit card bills • Payment of bills of telephone service (landline phone), water, electricity, school and university fee • Payment of Hire purchase agreement • Payment of Cable TV • Payment of Internet usage • Payment of postpaid mobile phone • Payment of prepaid (top-up) mobile phone • Payment of Life insurance • Payment of Non-life insurance (automobile, housing etc.) • Payment of Mortgage on house (selected from Lawson and Todd 2003; Wan, Luk et al. 2005

14. Statistical Method • First step: the index of e-payment channel usage would be computed by taking the average of the 4-score given to an e-payment channel according to how often the 10-banking service • After that a repeated-measure one-way ANOVA will run on these 4 indices

15. Sampling Design and Process • Total sample size => 600 (achieved by the self administered questionnaire technique) • 400 respondents is recruited in Bangkok (where is represent a large diversity of Thailand.) • Data collection: probabilistic sample design • Questionnaire survey in 5 main areas; • ATM users • A central business district • Shopping mall • University • and Thai Bank Branch

16. Thank you