Mobile payments in India: the privacy factor

The purpose of this paper is to understand Indian consumers’ intention to use mobile payments by examining their adoption readiness (AR) in the larger context of their technology readiness (TR) and their privacy concerns (PCs).

A four-city, three language, paper and pencil survey yielded a sample of 600 respondents from India. Data were analyzed using structural equations modeling.

This study finds that AR positively mediates the relationship between TR and intention to adopt (IA) mobile payments. More importantly, PCs negatively moderate the relationship between AR and IA.

Results will vary depending on country and other variables outside the scope of this study such as perceived risk, trust, etc. The sample was large but mainly comprised males, between 18 and 35 years of age.

The cash shortage due to a recent demonetization move in India had spurred mobile payment adoption but usage and retention remained low. Many other banking self-service technologies had not been successful and digitization was critical for easing payments and potentially paving the way for mobile banking. However, using mobile phones for financial transactions raises PCs that attenuate the positive impact of AR. Also, understanding overall attitudes with TR is important in a rapidly digitizing country with relatively novice users.

Adoption of mobile payment technology can help address social and economic challenges in India, such as financial inclusion, corruption and tax evasion. Given the increasing awareness of privacy issues in India, mobile payment adoption, which already faces acquisition and retention challenges, will likely to face greater resistance in the future.

The findings add to the literature on emerging markets and marketing of technology products by identifying the critical role of privacy in the adoption of financial technology services. Moreover, the authors demonstrate that given the rapid introduction of technology in India, consumers’ overarching TR has to be considered along with AR for mobile payments. Thus, the authors offer a tripartite, customer–technology–transaction view of the mobile payment adoption process in India.