A Review On The Electronic Payment System Information Technology Essay



2.1 Introduction

In this study, the researcher focuses on public perception. This research will concern on public perception among Multimedia University students. Past research for the dependent variable and independent variables will be discussed in this chapter. The dependent variable is usage and utilization of electronic payment system. The independent variables are personal factor, education, benefit, trust and demographic factors.

2.2 Electronic Payment System

Since 1960s electronic payment systems growing complexity in operations and have been expanding rapidly. People overcoming of barter in the history, trade regularly involves the exchange of goods and equal conceptual values, such as money. While researchers are still trying to know it and measure its significance and turnover, eletronic commerce (e-commerce) is changing and growing incredibly quicky. In an e-commerce environment, payment takes the form of money exchange in an electronic form so called “electronic payments”. Electronic payments are an necessary part of e-commerce and are one of its most critical aspects (Dennis Abrazhevich, 2004). Technical and economical motivate great effort in electronic payment systems. The two important reasons are security aspects and commerce over communication. Security aspects are traditional payment show the different security problem such as counterfeit banknotes but the electronic payment systems achieve higher level of the security present by traditional systems. Commerce over communication networks are in case of commercial relationships where involved parties are connected over communication networks, traditional means for payment cannot be used anymore which assume physical contact. Thus, electronic business processes of geographically distant parties require that monetary values can be transferred over networks (Ahmad-Reza Sadeghi and Markus Schneider,1990).

After the development of conventional payment system, Many types of electronic payment systems have been projected but the e-cash system have proved mostly unsuccessful and electronic payment systems based around credit and debit cards and Electronic Fund Transfer (EFT) are the leading modes for transfers of consumer value at present, new payment approaches carry on to change and be proposed. Electronic payment systems (EPSs) are summoned to ease the most important action after the customer’s decision to pay for a product or service to deliver payment from customers to vendors in a most proficient and problem free way. The role of e-commerce electronic payment systems is essential for future of e-commerce, whose additional growth depends on the appropriate growth. The need for online payments was first addressed by using extant payment methods of the offline world for online payments. For example credit cards, originally intended as an offline credit instrument, have become the major payment instrument fore-commerce (Dennis Abrazhevich, 2004). EFT based payment system came into existence. It was first electronic based payment system, which does not depend on a central processing intermediary. An electronic fund transfer is a financial application of Electronic Data Interchange (EDI), which sends credit card numbers or electronic cheques via secured private networks between banks and major corporations. To use EFT to clear payments and settle accounts, an online payment service will need to add capabilities to process orders, accounts and receipts. But a landmark came in this direction with the development of digital currency the nature of digital currency or electronic money mirrors that of paper money as a means of payment. As such, digital currency payment systems have the same advantages as paper currency payment, namely anonymity and convenience (Sumanjeet, S., 2009).

The function of electronic payment systems has some association on internet as an open network infrastructure. As with all truly integrated computerised value chains, the end user is now the front man of the back-office. The shift to Internet technologies by the banking sector also means that proprietary technology becomes more and more obsolete. The move to mainstream technology also signals another far-reaching innovation of the whole back-office computation such as the gradual substitution of batch processing by real-time transactions. Another notable change can be observed with respect to the technological arms of the payment service providers. While these so-called network operators worked in close relation with the banking sector, this has changed with Internet payments services.

Because the definition of electronic payment is so broad as to include any sort of electronic device to store monetary value, the methods of electronic money are only limited to the existing technology. At present there are three main storage methods for electronic money such as by software, by cards, and by accounts. The method of storing money in software is a payment system where monetary value is stored in a computer hard drive by means of a proprietary software program (Chuah, J., 2000). The program creates an electronic wallet that is charged with money from a bank account, and then the user can purchase goods or services by sending the information via this electronic method. The transaction is encrypted and the identity of the user is kept hidden from the merchant (Robertson, P., 1999). There are several companies offering software like this, but these systems have failed to catch the public interest so far and would appear to be dead at the time of writing. One of the main players in the software electronic money was DigiCash, a company that offered the customer a small downloadable computer program that allowed the user to store money in their computers. DigiCash proved to be a disappointment, and has been purchased by another company called Ecash, but the scheme appears to be either stalled or in its early development stages (Guadamuz, et al., 2008).

2.3 Electronic Payment Instruments

The given economy on payment play vital role in the payment system as mean electronic payment instruments. Electronic payment system supports the e-commerce activities in general. There are numerous types of electronic payment instruments in the market today such as credit cards, debit cards as well as electronic banking. The available ATM machines, can participate to better use of Debit cards from citizens to withdraw money. Withdrawing money from ATM machines can lead to extra savings from banks, because, they use less paper to document transactions uses more and more cards in everyday payments and other transactions, there are many other factors that influence the use of electronic payment instruments (Abdullai, Besim, 2009).

In any given transaction, a consumer will have any number of options as to how to pay for the purchase. Consumers will choose their transactional medium according to the relative costs and benefits of using one method over another. Consumer payment choice is influenced by various factors. Previous research has highlighted three important sets of factors such as consumer characteristics, payment method attributes, and transaction characteristics. Consumer characteristics, such as age, income, and educational level, have shown to be correlated with the use of payment methods in the previous literature. Payment method attributes may also be important factors when consumers choose a payment method. Some payment instruments have distinctive attributes. For example, cash gives consumers anonymity, and credit cards provide liquidity at least until the next billing date. Other attributes, such as transaction time, security, ease of use, control spending, and so on, also vary by payment methods (Ching, A., and Hayashi, F., 2007).

2.3.1 Credit Cards

The credit card industry has developed into a major financial service used by the majority of United States households across all income classes. What evolved from relatively humble beginnings following the Second World War, is now a major system that stimulates household and personal spending. For example, with the recent introduction of credit availability in the fast food industry, credit sales are now 50-100 percent larger than cash transactions (Ritzer, 1995). Multiple card holding appears then to have become a feature of the credit card market in a range of countries in North America, Europe and Asia. Given the extent to which multiple cardholding appears to exist, a key objective for card issuers today is to ensure that their card is “top of the wallet or top of the purse” and is used to a sufficient extent to ensure profitability (James F. Devlin, et al., 2006).

Credit card is a specify size of mall card as system of payement subject to users. The user can have a loan of money for payment to the cash advance from the issuer of the card grants a line of credit to consumer or user. The credit card let the holder promise pay these goods and services before their purchase the goods and services. The credit card assign the holder named on it to charge goods or services to his or her account. The debit card is differs with the credit card, with which money is automatically withdraw from the bank account of the cardholder to pay for the goods or services. In the early beginnings, Credit cards were conventional only at the commerce to issue the card and in partial locations. As modern credit cards are generally used for convenience, these predecessor cards were developed as a means of creating customer loyalty and improving customer service (creditcards.com).

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Credit cards perform two functions. First, they may be used as a transactional medium, as a substitute for cash and checks. Second, they may be used as credit, as a substitute for other forms of short-term, small-dollar value credit, such as layaway plans, pawn shops, and short-term bank loans. Bankruptcy commentators have largely focused on the latter use, decrying the seemingly high interest rates of credit cards as a form of credit and using this as evidence of consumer irrationality and lender exploitation. Both this focus on credit cards primarily as a form of credit, and the conclusion that such use is irrational, are incorrect. The primary use of credit cards today is as a transactional medium, not as a source of credit. Over half and probably as much as 68 percent of credit card users should be considered “convenience users,” who use credit cards primarily as a transactional medium and who pay off their balances in full each month. Moreover, convenience use of credit cards is rising much faster than revolving use of credit cards, increasing 20 percent in one year alone. In the (Zywicki, 2000) had find out the recent Visa study it is also estimated that almost 60 percent of total bankcard volume generates no interest, up from roughly 50 percent six years ago (Zywicki, T.J., 2000).

Surprisingly, there have been very few attempts to measure the connection between credit card usage and levels of spending, perhaps because the endogeneity problem is so difficult to solve. There have, however, been several empirical and theoretical investigations exploring closely related issues. One important line of inquiry has focused not on whether credit cards promote spending, but on whether consumers under-predict their own credit card use and or the level of credit card debt they will accumulate (Hafalir, et al.,2009). they distinguish Consumers in the credit card market into 3 group. First convenience users, who pay their balance in full each month and do not pay interest, second revolvers, who pay interest on their balances, third group who believe that they are not going to borrow on their cards but end up borrowing because of commitment problem they also argue that the last group’s underestimation of their own future borrowing is making them less sensitive to the interest rate on the card than they would be if they correctly predicted their own borrowing and hence leads to higher credit card interest rates than one would expect in a competitive market with fully rational consumers (Hafalir, et al., 2009).

The reasons for the use or disuse of cards have several important policy ramifications. First, in the countries in which credit cards are used frequently, their success suggests that they generally provide payment more cheaply and effectively than competing retail payment systems. By lowering the transaction costs of retail transactions, those systems generally bolster the efficiency of the economy’s retail sector. Second, in this country at least, leading scholars associate the credit card with an embarrassingly high rate of consumer bankruptcy generally the highest of any industrialized country. Third, there is good reason to believe that wide use of credit cards is inversely related to a nation’s savings rate. If, as some scholars argue, credit-card usage causes the decline in savings, then policies that foster credit-card usage are relevant to those aspects of macroeconomic planning that are affected by savings rates. Thus, concerned policymakers should welcome an enhanced understanding of the institutional factors that motivate the use of cards in general or the use of cards as a borrowing device in particular (Mann, R. J., 2000). Types of Credit Cards Regular Credit Cards

The regular card is the most common one in introducing everything by most user for personal use. Business Credit Cards

A credit card business to provide business owners the opportunity to make business and personal expenses separate. Credit card offers and special rewards and savings business opportunity to go beyond the individual owners may have credit cards. Since money management is essential to a successful business can provide a card expense management services, will allow to save money to track outgoing and required for employees who travel, as well as a higher credit limit increase their credit card often than you on your credit card (Web-sources.net). Student Credit Cards

Students nowadays are well luxury because their parents simply give them the best things such as credit cards. Though, not all student credit cards are given by the parents. Many vendors today understand the need of students today and have give a way for them to spend first and pay later. This is why student credit card is so popular (mycreditcardsolution.com). Secured Credit Cards

Secured credit cards are for those who have no credit record or credit stain choice. On the secured credit card credit is equal to deposits. Secured credit cards have a different cycle of purchase and payment balance. This is the type of credit by banks or credit unions are fully guaranteed by the consumer issue of his own money. No or bad credit consumers who may be able to guarantee the credit card to build your credit back up (mycreditcardsolution.com). Credit Cards for Bad Credit

These cards will come with some limits not classically set up on other types of credit cards because possible bad credit to obtain a credit card. Credit limit will be lesser and interest rate higher. Some may need to have a secured credit card to maintain a savings or some other type of account that will cover the expenses on the credit card


2.3.2 Debit Cards

Debit card is plastic cards that offer a substitute payment method to cash also called an electronic cheque when making purchases, the payment direct withdraw from user account. In some cases, the cards are considered entirely for use on the Internet, and so there is no physical card. The use of debit cards has become extensive in many countries and has overtaken the cheque and in some instances cash transactions by volume. Debit cards are used broadly for telephone and Internet purchases, and unlike credit cards the funds are transferred from the bearer’s bank account instead of having the carrier to pay back on a later date. Debit cards can also allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash and as a cheque guarantee card (Wikipedia.org, 2010).

The literature on behavioral economics suggests that consumer payment choice, especially the use of debit cards, can be explained by behavioral motives, such as to avoid overspending on credit cards (Ausubel, 1991, Prelec and Simester, 2001, and Bertaut and Haliassos, 2002). This is closely related to the difference in payment card attributes for example whether the card has “credit” function or not. Zinman, 2005, on the other hand, suggested that although debit card use can be partly explained by behavioral motives, it is also explained by consumers’ cost minimization consumers who carry a credit card balance use debit in order to reduce their interest costs on credit cards (Ching, et al., 2007).

Debit cards appear to serve primarily as a substitute for cash and checks. The possibility of using debit cards is declining with age, education and women’s increasing use of high speed in a debit card than men. Convenient to use as a reference most major debit cards. Frequency of use of debit cards is the older respondents and less than families with children. Reacted strongly to the so-called consumer personal identification number (PIN) debit transaction fee to use signatures instead of the password, to ensure that the transaction costs, the cost of reducing the likelihood of consumers to use in all of the debit card. Since the charges, rather than point of sale fees, the price is low response, a response to surcharge consumers bound in a single payment (Borzekow, et al,2007).

Despite the development and outstanding debit cards, debit largely escaped the determinants of the use of academic consideration. In introducing the quote I believe is the fact that there is potentially important, money, cost-based reason to use debit cards. Major credit card users who take around 53 percent of the balance of margin deposits in interest costs, it can reasonably choose to use debit cards instead of credit, in order to reduce transaction costs. Holders of such motives, even “small” who also hold low-yielding liquid assets to consumers and costly credit card debt a small part of the ordinary shares. Rational use of debit cards may also lack access to consumers or face a binding credit limit. Common Stored Value Card will be used may depend on network effects and safety or convenience advantages relative to print media only, but also on the marginal costs from the face of relative consumer credit and debit (Zinman, j’s, 2004).

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Debit cards have been used more extensively in recent years for a number of possible reasons. It is relatively easy to add a debit function to an ATM card, and because the base of ATM cardholders was well-established in the 1980s, it was not difficult for banks to establish a similar base of debit cardholders. Aggressive marketing on the part of banks helped familiarize debit cardholders with the instrument, as did the emergence of Visa and MasterCard’s offline debit products, which opened up their credit card infrastructures to debit cardholders. Merchants have had at least three clear incentives to install online debit card readers. First, debit cards offer consumers a payment choice that many of them now prefer. Second, processing an online debit transaction is less costly to merchants than an offline debit card, credit card, or check transaction. Third, the risk of fraud is lower with online debit than other methods of payment (Hayashi, et al., 2003). Offline Debit Card

Offline debit card combines the traditional debit card and credit card let the cardholder direct pay the purchase form bank account. As with a traditional debit card, a transaction using the offline debit card creates a debit against the cardholder’s bank account. But unlike with a traditional debit card, no Personal Identification Number (PIN) is required during the transaction all need the user’s signature. These cards are generally issued by credit card companies in association with the bank in which the account is held (Investopedia.com). Electronic Purse Card

Type of smart card which, with an embedded microchip, provides multiple options, such as debit card or credit card type payments (Businessdictionary.com com).

2.3.3 Electronic Banking

The funds are move through an exchange of electronic signals between financial institutions form banking, rather than an exchange of cash, checks, or other negotiable instruments. The funds between financial institutions are recorded on computer systems connected by telephone lines to ownership of funds and transfers. Customer identification is by access code, such as a password or personal identification number instead of a signature on a check or other physical document. Electronic banking systems can be low-dollar retail payment systems, such as automated teller machine and large-dollar interbank payment systems, such as the Federal Reserve Fed Wire operated by the New York Clearing House Association (Allbusiness.com).

New information technologies on the financial services industry is becoming an important factor in future development, particularly in the banking sector. Banks are faced with important issues such as how to use the new technology is full of opportunities and advantage, how to change the Internet’s development, how to interact with customers of financial service providers such as e-banking is the bank’s new channel service. Electronic banking can also be defined as a variety of following platforms such as Internet banking or online banking, telephone banking, TV-based banking, mobile phone banking and PC banking (home banking) or offline banking. Internet banking is a self-service technology in the form of dollar cost, a leading retail bank has recently offered several million dollars (Dr. Mobarek, A, 2007).

According to (Singh, et al., 2000) there has been a rapid growth in online PC banking in the United States; from just over 10 million in 1999 to the projected 35 million by the year 2003 with a rapid shift in internet access. In trying to consolidate and expand customer relationships and stay ahead of the competition, banks turned to personalized online services, online banking, phone banking next door. Electronic Customer Relationship management (eCRM) will thus be next paradigm shift. This will be a fundamental change, involving all the financial institutions to re-process. It must not be a network solution or solutions consultant or a call center solution or wireless solutions. Enterprise-wide eCRM must be all of the above. Beyond the ability to deploy across multiple channels, the solution must have consistency and collaboration across all channels (Singh, et al., 2000). Types of Electronic Banking Mobile Banking

Mobile banking (M-banking) and Short Message Service banking (SMS Banking) also part of Mobile banking for the implementation of the balance check via mobile devices such as mobile phones, account transactions. Mobile banking today is the most common performance via SMS or mobile Internet, but can also be downloaded to mobile devices using the named client specific programs. In an academic model, mobile banking is defined as Mobile banking is banking and financial services and mobile communications equipment to help. The scope of services provided may include facilities to conduct bank and stock market trading, managed accounts and access personalized information (Wikipedia.org, 2010).

Using comprehensive mobile technology, financial institutions can offer different services to their customers. The basic options M-banking provides include balance inquiries, bill payments and transfers among accounts owned by the same person (Miller, 2009). However, many banks offer more services, such as obtain bank statements, performing stock trading to increase the user satisfaction on using M-banking or even receiving minimum balance alerts. 

M-banking provides exceptional convenience for all mobile phone users. There are various types of M-banking methods to cover two different capabilities of mobile phones which are text messaging, mobile internet and special programs called ‘clients’ program that access data from server that are download to mobile devices (Miller, 2009). Automated Teller Machine (ATM)

An automatic teller machine (ATM) or automatic banking machine (ABM) is a automated telecommunications device that provides an Access in public spaces, no financial transactions, cashier, clerk or bank teller who need financial institutions customers. In most modern ATMs, the customer confirmed by inserting a plastic ATM card with magnetic stripe or a plastic smart card chip, which contains a unique card number and some security information, such as the expiration date. Certification is to enter a Personal Identification Number (PIN) customer. ATM, customers can access their bank accounts to make cash withdrawals and check their account balances, and purchase pre-paid mobile phone credit (Wikipedia.org, 2010).

2.4 Research Model

This research is to find out the public perception. The perception will gain from the Multimedia University students.

The independent variable in this research model are personal factor, education, benefit, trust and demographic factors. The dependent variable in this research model is usage of electronic payment system.

Independent Variable Dependent Variable

Personal factor


Usage and utilization of Electronic Payment System



Demographic factors

Figure 1: Proposed Framework for Usage and Utilization of Electronic Payment System

2.5 Determinants of Usage and Utilization of Electronic Payment System

2.5.1 Personal factors

Following a review of the personal factors affecting individual behaviour, the ability as the degree of self-confidence in performing the behavior is another crucial personal factor in predicting users’ behavior (Manuel J.et al., 2004).

According to Bandura (1986), self-efficacy as a part of personal factor, self-efficacy beliefs develop is response to four sources of information such as previous experience success and failure, vicarious experience such as observing others successes and failures; verbal persuasion from peers, colleagues, relatives; and affective state emotional arousal example anxiety. Because self-efficacy is based on self-perceptions regarding particular behaviours, the construct is considered to be situation specific or domain sensitive (Cassidy & Eachus, 2002). To illustrate domain sensitivity Cassidy & Eachus (2002) provide the example of an individual who may exhibit high levels of self-efficacy indicating a high level of confidence within one domain, for example sport, whilst simultaneously exhibiting low levels of self-efficacy within another domain such as academic ability. Bandura (1986) suggests that the perception that one has the capabilities to perform a task will increase the likelihood that the task will be completed successfully (Eachus, et al., 2006).

Self- efficacy is an important determinant of the perception of users about Electronic Banking. According to Ramayah (2004) has suggested that users strongly anchor ease of use perceptions about any system to their computer self-efficacy. Therefore, this research attempts to find out and understand acceptance of Internet Payment as a function of underlying situation of high self-efficacy of the target respondents. (Ramayah, T. et al., 2009)

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Researchers generally believe that personal factors are as a person, he or she uniqualy affect cognition, motivation and behavioral characteristics of the definition of the dynamics and organizational settings (Allport, 1961). The cognitive perspective assumes that people’s personality is never completely determined; people are changeful and always free to reinterpret their experiences in idiosyncratic ways (Ryckman, 1997).

However, the social behavioristiv perspective asserts that our personality or behavior is learned, rather than innate. People’s experiences and interactions continually influence one another and behavior occurs as a result of complex interplay between inner processes and environmental influences (Rotter et al., 1972).

Researcher had define personal factors will influence by cognitive process which is thinking. Personal factors will also change through their daily life experience. In order enhance for future research, there is necessary to analysis validity of data to show the performance that gain by different personal factors.

2.5.2 Education

Besides, the role of education is important to enhance the usage of electronic payment system. Consumers and e-merchants should be aware of all the features and functions of the various systems as well as all the risks of financial loss involved and their legal protection in relation to such risks. To promote the usage of electronic payment system, consumers need education in relation to their liability that might incur from the use of new types of electronic money so they can understand the differences between new digital payment systems and traditional payment mechanisms in order to make their choice accordingly when buying online. In addition, consumers should be armed with all the essential information regarding e-money, such as issues of privacy in order to have the ability to weigh the pros and cons of these new mechanisms and maturely make his choice. Finally, under more practical terms the industry could post out questionnaires specifically designed in order to measure consumers’ awareness in this evolution of payment mechanisms. This will help the industry to assess and improve its products. Seminars could also be held in national and international level in relation to the above-mentioned issues. In addition, experts from the industry, the legal field researchers and consumer protection organizations could initiate an educational campaign in public such as TV, radio, presses (Kontogeorgou,et al., 2002).

2.5.3 Benefit

Benefit is another significant driver for the usage of electronic payment system too. The high rate of convenience use of credit cards relative to revolving use reflects the attractiveness of credit cards as a transactional medium. This attractiveness stems from two basic sources. First, credit cards enable individuals to minimize their cash balances, thereby allowing them to shift their assets into higher-return investments. Second, there has been an explosion in consumer demand for credit card use, largely as the result of the convenience of using credit cards as a mechanism for conducting transactions. Credit cards offer two transactional advantages over cash and checks. First, unlike cash and checks, credit cards make it unnecessary to maintain cash reserves sufficient at all times to cover current expenditures. Second, credit cards offer several ancillary benefits unavailable to cash and credit cards (Zywicki, T. J., 2000).

The growth of credit cards has benefited consumers widely for several reasons. For consumers, credit cards provide a convenient method of completing transactions. Credit cards can help consumers coordinate the timing of consumption and the flow of income. It makes people less tied to their periodic pay checks. If consumers see an item on sale today, they can buy it now and pay for it a few weeks later when their monthly statement arrives. And credit cards allow consumers to purchase items today based on their expected future earnings. Credit cards are a convenient source of credit for both consumers and merchants. Consumers can use their cards at various merchants, yet make only one monthly payment. Merchants don’t have to operate their own credit programs, allowing smaller retailers to compete more easily with national retail chains that have the resources and scale economies to offer consumers credit through store cards or instalment loans (Evans, D.S., 2005).

Benefits are all of importance to the adoption of e-commerce payment system. Thus the factors which are critical for the success of e-commerce payment systems are multifaceted. These include integrity, integrity represent that transaction data are transmitted and received unchanged and as intended, non-repudiation represent transactions have the quality of non deniable proof or receipts, authentication represent that identities and attributes of parties engaged in commerce are established at some tolerable level of risk, authorization represent that individuals are established and recognized as entitled to receive, send or view transactions, confidentiality and reliability represent that transactions can be protected from view except by those who are authorized, and probability of failure in the transaction-send, receive, acknowledge-is low (Singh Sumanjeet, 2009).

2.5.4 Trust

Trust is particularly important in global e-commerce transactions due to the difficulty of taking legal action in cases of a dispute or fraud, and the potential for conflicts caused by differences in culture and business environments ( Abdullai, Besim, 2009). Factor that will affect customer perception towards electronic payment system is trust. The literature identifies that a high level of user confidence or trust in an electronic payment system is an important factor contributing to their successful adoption. Trust is more important than security. This is consistent with the findings of Ahmad (1990) who argued that users and merchants are more likely to use an insecure payment system from a trusted company than a secure payment system from an un-trusted company. Thus, the issues of trust were found to be very important in the success of electronic payment system adoption. Without an adequate system that users trust, it would be extremely difficult for an electronic payment system to achieve widespread usage.

In this section, we consider the main security and privacy requirements for electronic payment systems in general. Note that not all of these requirements are necessarily relevant and have to be fulfilled for all different types of payment systems which will be presented later. Requirements for systems usually vary according to their specific features and the underlying trust assumptions. In fact, there are also other important requirements for electronic payment systems, example usability, acceptability, scalability, interoperability, availability. However, due to space limitations, these will not be considered here. In general, the choice of a payment system best suited for a specific commercial relationship may depend on various conditions, example concrete systems supported by the merchant, trust in payment systems or organizations behind them, privacy requirements additional costs (Ahmad-Reza Sadeghi, et al., 1990).

2.5.5 Demographic Factors

One branch of research has focused on the demographics of consumers who choose to use electronic rather than more traditional methods of payment. Santiago Carbó-Valverde (2009) finds that use of electronic payments in general is positively related to income, wealth, and age. Researcher also show that those who use debit cards are younger, have higher levels of education having a college degree seems to be particularly relevant, and have greater amounts of financial assets than those who do not use debit cards. There are some key differences in the findings of King (2005) and those of Kennickell and Kwast (1997). For example,King’s (2005) education result differs from that of Kennickell and Kwast (1997). King (2005) argues that the education variable in his results was insignificant because of the inclusion of other demographic variables that are closely related to level of education. The differences in the studies’ age results are more puzzling, although King’s (2005) results may be picking up households using Automated Clearing House (ACH) type electronic media which have been around much longer than debit cards since he looks at all types of electronic payment media. Older households may be more likely to use the ACH type media than are younger households because they are more likely to have long-term relationships with banks and therefore trust using such media. On the other hand, if one considers only debit cards, as in Kennickell and Kwast (1997), then it is reasonable to see more use among younger people since they tend to adopt newer technologies more quickly than older people (King, A.S., et al., 2005).

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