Mobile payments represent the future of payment systems. Their potential in revolutionizing payments systems is beyond imagination, as indicated by the rapidly and continuously evolving mobile payments technologies. The ubiquitous nature of mobile phones in a time when large populations are either unbanked or underbanked solidifies the need and importance of mobile payments. The potential benefits of mobile payments systems remain largely unrealized despite the growing research on this area. The evolving concepts of mobile payments include mobile wallets, among other initiatives that hold promise.
A look at mobile banking, whose benefits are now being realized, clearly goes to show the transformative nature of mobile technologies. Research on the needs to be undertaken to understand how the various challenges that have hindered the success and take-off of mobile payments can be overcome (Gürler & Daştan,2015). These challenges include lack of interoperability, perceived risk, and complexity in the value chain.
The success of M-Pesa systems in Kenya also shows how transformative mobile payments can be in helping large populations who otherwise would not have access to financial services access basic financial services. Research in this area is likely to become a matter of crucial importance in the future in light of the growing middle class. Researchers predict that by 2030 the middle class will have grown by three billion. This implies that the capacity of financial services will have to develop and increase as well in order to match this growth. Mobile payments will offer an innovative way of meeting the growing demands of financial services.
Limited Consumer adoption remains one of the main impediments to the success of mobile payments. The universality of Mobile payments is required in order to obtain maximum benefits of mobile payments. It is, however, directly hinged on the ability of mobile payments to attain a critical mass through wide consumer adoption. A study of the business ecosystem of Mobile payments indicates the extensiveness of this field and the critical role that each of the stakeholders plays, including customers. Researching on the factors affecting consumer adoption of mobile payments will therefore contribute to the existing knowledge on ways to successfully launch and integrate mobile payments in day-to-day living. The evolving and ever-changing nature of this field also requires the constant updating of information.
This research is, therefore, important in understanding why mobile payments, despite their perceived benefits, fail to attain critical mass levels. Simplicity, ease of use, cost, interoperability, privacy, and trust are some of the factors that have been found to influence consumer adoption. It is, however, important to understand or measure the role and extent that each of these factors singlehandedly plays in influencing consumer adoption. Conducting research that measures and assesses the significance of each of these factors is therefore important.
Mobile payments infrastructure has already been laid down, and consumer adoption plays a pivotal role in the viability of these programs. The success of mobile payments technology such as mobile wallets will play a significant role in paving the way for more superior payment systems in the future.
The academic model which is useful in this study is the technology acceptance model. This model was proposed in 1980 by Davis, where he founded it on the concepts of the theory of reasoned action. The technology acceptance model is the best model to use when predicting consumers’ acceptance of technology. This model is used to help estimate and provide an explanation for users’ behavior towards accepting new technology. The technology acceptance model is based on two core attributes, perceived ease of use and perceived usefulness, which, according to this model, are useful in determining behavioral intentions and actual behavior in adopting a technology innovation (Sellitto, & Fong 2015). This model has undergone modification over the years to allow the inclusion of variables such as perceived risk,
TAM model is the best model in understanding technology adoption by users. It is better than both TRA and TPB. The modifications made to the TRA model also make it applicable to a wide range of technological innovations.
The changing demographics are in favor of mobile payments. The baby boomer generation is slowly retiring, and the tech-savvy generation Y is taking their place at the workplace; this generation is seen to prefer mobile payments as opposed to cash payments. This generation will, in time, form the highest proportion of the population hence setting a fast pace and ready market for innovations in mobile payments such as mobile wallets (Thomas,2015).
Another aspect of the changing demographic is the increasing number of tech-savvy populations who, however, lack are to a large extent either unbanked or under banked. They, on the other hand, possess a mobile phone, so mobile payments will offer and are actually beginning to offer them access to financial services.
Lack of interoperability in a market characterized by lack of standardization and clear regulations has impended proper development and growth of mobile payments for so long. This is, however, slowly changing as clear regulations on aspects such as data privacy and virtual currencies and other global initiatives are put to place. Standardization of mobile payments will facilitate interoperability hence increasing consumer adoption of mobile payments (Ledford, 2015).
The future of mobile payments is now more promising than ever also due to the growing competition as a result of increasing market share. Competition has paved the way for innovation, with companies such as Google continuously providing value-driven mobile payments technology to remain at the forefront of mobile payments.compatibility, and perceived trust, which are regarded as important in influencing technology adoption by users.