A 2011 report by the World Bank reveals there is 94% population penetration of mobile subscriptions in South Africa. A 2009 report by Finscope further suggests that 64% of the adult population uses formal banking products. However, the 2011 report by the World Bank reveals that only 9% of the South African population has access to Internet services.
This implies that a large population of the adult population remains untapped, yet they are well suited for mobile transactional banking. This is supported by the fact that there are several technological advancements that help in developing simpler and more accessible banking services.
Following this gap, I undertook a quantitative study that would help identify the barriers to the adoption of mobile technologies that would then help in forming recommendations to organisations that intend to offer mobile banking services. The sample group consisted of a few hundred participants.
Regardless of gender, the age group between 21 and 39 with at least matric qualification were found to be more likely candidates to adopt the service. Therefore, organisations should target this segment of the population in order to increase the adoption of their mobile payment services.
Hurdles
Five key factors were identified as possible barriers to the adoption of mobile banking services. These include: value and usefulness; security; ease of use; technical knowledge; and cost. On value and usefulness, users' attitudes on the value of the service are affected by perceived usefulness based on an existing need. On security, the adoption rate directly relates to how much users perceive the service based on privacy and safety of financial information. On ease of use, users' perceptions are determined by the amount of mental effort required to use the service. On technical knowledge, users' self-efficacy with mobile phones influences their perceived ease of use.
It is crucial that users believe their financial information is in safe hands.
In order to mitigate the five possible barriers mentioned above, the study suggests five key recommendations to organisations that use or intend to use mobile payment services. First, user needs and expectations. It is imperative that the service delivers an unmet need of the user. If the user finds value in the product and it is better to use than alternative products, then it will be adopted. Value and usefulness should be aggressively marketed to the above target market. If consumers can be convinced the service is a good idea through this marketing, then they will be more likely to adopt the service.
Second, maintain low implementation and running costs. Costs relating to banking as a whole are a large hurdle to overcome for organisations. Companies need to ensure both their set-up and ongoing costs are kept to a minimum, while making it clear through their marketing that this is the case.
Third, ease of use. The product needs to be easy to use while not requiring a lot of effort. Support needs to be given to users throughout the product life cycle, while ensuring the registration process is efficient in order to get their target market using it in the first place. The combination of ease of registration and negligible ongoing complexities will ensure users will continue to make use of their services.
Self-assurance
Fourth, consumer confidence. In order to ensure ongoing usage of mobile banking services, organisations need to instil a sense of confidence in their users. Being able to use all features of the product allows users to gain this assurance, and they will, therefore, continue to use the product. This can be attained through training applications, online support or marketing material. This is an aspect that needs to be instilled from the first time consumers try the product, otherwise they will lose faith and not continue to use.
Finally, trust. It is crucial that users believe their financial information is in safe hands. Trust has to be gained firstly in the company itself, then in the service. Organisations need to ensure their company is seen in a good light in both marketing material and in their general operations. This will gain their target market's trust, and thereby, their usage.
It is important to bear in mind that because consumers are so concerned about the safety and privacy of their financial information, any negative occurrences linked to the company will be perceived in a bad light. This works hand-in-hand with users' confidence in the product.
If they have obtained the correct amount of training and support upfront, they will be able to use all aspects of the service. They will, therefore, feel they have greater control over the service, and ultimately, their money.
Taking heed of the demographic profiling, together with the factors influencing mobile banking service adoption, will allow organisations wishing to enter the market or increase their market share within South Africa to create a strategy to be successful in the future.
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