EFFICIENCY OF ELECTRONIC PAYMENT SYSTEM TO STUDENT

ENTREPRENEUR OF MARINERS’ NAGA

A Thesis

Presented to the Faculty of

Mariners’ Polytechnic Colleges, Inc.

Naga City

In Partial Fulfillment

of the Requirements for the Degree of

BACHELOR OF SCIENCE IN HOSPITALITY MANAGEMENT

AGORITA, CHRISTIAN DAVE

BERIÑA, JERICK A.

ESCOBER, CRISTINE JANE

JULY 2021
 CHAPTER 1

INTRODUCTION

Since the dawn of history, there has been trading between two parties exchanging goods

face-to-face. Barter is an act of trading goods or services between two or more parties without

the use of money —or a monetary medium, such as a credit card. In essence, bartering involves

providing one good or service by one party in return for another good or service from another

party (Kenton, 2021). Eventually, such trading became complicated and inconvenient; money

was invented to acquire something he needed from a seller without necessarily exchanging

goods.

Technology changed our world throughout history. There are many innovations from

everywhere, like infrastructure, business finance, and digital machines that are increasingly

enhanced every year. In reality, the internet, the world-famous method of generating new ideas

is now undergoing a vital redesign to meet people's needs. According to the statistic in 2019,

there were 4.13 billion internet users worldwide, indicating that more than half of the world's

population is connected to the internet. While the digital population is rising visibly in many

parts of the world, internet connectivity and affordability can vary significantly based on where

the country is situated. (Clement, 2020). The internet has increasingly become a popular means

of carrying out transactions, such as banking and retail transactions, P2P payment websites have

arisen to facilitate payments between individuals over a computer network. Other online services

include exchanges of cash between two individuals, such as auction payments or group billing

(Guthrie, et. al, 2002).

demand or need for cashless transactions. On February 11, 2020, the 2019-novel coronavirus was

officially named SARS-CoV-2 by the World Health Organization (WHO), also known as the

COVID-19. The COVID-19 is not just causing health crises around the world, but it is also

affecting all spheres of life, including entrepreneurs. There have been 218 countries and regions

worldwide, and 67, 402, 219 confirm that COVID-19 pandemic cases originated from Wuhan,

China, have been reported. The three pandemic countries are the United States, India, and Brazil.

The World Health Organization has declared this outbreak to be an international public health

emergency. 49,053 laboratory-confirmed cases have been reported as of February 14, 2020, and

1,381 deaths worldwide (WHO, 2020).

This led stores, businesses and establishments to resort to safer, convenient, and cashless

transactions or modes of payment. The electronic payment system refers to an electronic

payment process for products and services purchased online or in supermarkets and shopping

centers (Adeoti & Osotimehin 2012). Another definition suggests that e-payment systems are

payments made in the electronic commerce environment in the context of money exchange

through electronic means (Kaur & Pathak, 2015). The Philippines was one of the first countries

to pioneer digital payments in 2001 with the launch of mobile money. It was first introduced in

the country by Smart Communications Inc., a telecommunications provider. The platform

allowed the transfer of funds, the payment of bills, and purchase of goods with the use of mobile

phones and a reloadable prepaid card. But its adoption and use has been largely limited (Funa

2020).

For the past few years, different companies such as telcos, banks, fintech startups,

financial services, and offline-to-online (O2O) firms have rolled out their e-wallets in the
Philippines tailor fit mostly for the country’s unbanked population of 72.9 million or 69 per cent

of 105.7 million Filipinos. More Filipinos are now using digital channels to conduct transactions

— including critically important payments — due to the profound impact of the coronavirus

pandemic on their daily lives, especially limitations on physical movement that are imposed by

the crisis.

More importantly, as many as nine out of ten local users to electronic payment systems

now prefer making cashless transfers over cash payments due to public health considerations.

In a world where digital is the new normal student entrepreneurs are embracing electronic

payment systems, the researchers became interested to study about it. Therefore, this study

would want to know the Efficiency of Electronic Payment System to Student Entrepreneurs of

Mariners’ Naga. This study also aims to provide information that would benefit both student

entrepreneur and consumer in using the Electronic Payment System.

Statement of the Problem

This study aims to determine the Efficiency of Electronic Payment System to Student

Entrepreneur of Mariners’ Naga. Specifically, it seeks to answer the following questions:

1. What kind of Electronic Payment System does student entrepreneurs are using?

2. How does Electronic Payment System contribute to student entrepreneur in terms of:

a) Efficiency

b) Security
 c) Transparency

d) Reliability

3. What are the benefits of Electronic Payment System to the costumer?

4. What devices is being used by both student entrepreneur and costumer to connect Online in

using Electronic Payment System?

Scope and Delimitation

The study will determine the Efficiency of Electronic Payment System to Student

Entrepreneur of Mariners’ Naga. The study would also identify the factors that influence student

entrepreneur in using Electronic Payment System as a method of payment transactions. This will

involve 5 selected Student Entrepreneur from Mariners’ Naga as the main respondent of the

research. The respondents must be using the Electronic Payment System.

The researchers recognize the limitation regarding the reduced direct evaluation in terms

of the participants' compliance with the provided activities. The email which will be sent will be

the only instruction material to be provided, although the respondents can send a message to

researchers during the process.

Significance of the Study

The findings of this study will be favorable and great aid to the following:

Electronic Payment System Users – The study will be beneficial to EPS USERS since it sought

to relay important information about Electronic Payment System in the Philippines specifically

in Naga city.
Student Entrepreneur - The study will provide student entrepreneur with the utmost awareness

about Electronic Payment System to help them to understand on how EPS works.

Small Businesses – The study will be useful for the business for it increases security and faster

payment as competitive advantage.

Costumer – The study will provide another way of payment transaction where customer will

also benefit from.

Future Researcher – Future researchers can utilize this study as a future reference, wherein they

can make further improvement by producing a new set of interview questionnaires or modify

new tools. This can be a reference framework for identifying variables or limitations and

recommendations.

Definition of Terms

For better understanding and clarity of the study, the following terms are being defined

technically.

Benefit. The contribution and desirable outcome of something.

Customer. a person or organization that buys goods or services from a store or business.

Entrepreneur. a person who organizes and operates a business or businesses, taking on greater

than normal financial risks to do so.

Electronic Payment System. An e-commerce payment system facilitates the acceptance of

electronic payment for online transactions.

Review of Related Literature

Related Literature and Studies

Related Literature

According to e-commerce monitor among the SEA countries, the Philippines experienced

the highest increase in the terms of shopping app utilization (53 percent), as well as online

spending (57 percent). Accordingly, the total number of visits to shopping applications in the

Philippines climbed to approximately 4.9 billion during the lockdown period. These visits

translate to actual online spending that puts money in the pockets of our online sellers. As more

shoppers go online, more retailers/sellers have also brought their products to and strengthened

their online presence. In the face of Global Pandemic student entrepreneur are finding ways on

how they can sell products to their colleagues and neighbors considering the sanitary and health

crisis affecting millions of people around the globe. With the disadvantage of traditional payment

or cash payment due to pandemic, inconvenience, inefficient, risky, not transparent, and less

secure are the concern of entrepreneurs.

In the last 10 years, mobile payment is widely used by anyone and even becomes a needs

requirement to perform financial activities. Each financial institution always tries to improve the

service in the institution looking for technology-oriented innovation. The mobile payment

services that are currently created and through continuous improvement have important functions

in the creation of ecosystems ranging from regulators, financial institutions, device

manufacturers, retailers to the customer himself. With the increasing use of mobile payment, it is
important to know the key factors that make people use mobile payment. The key factor in the

use of mobile payment can be an opportunity for financial services to build the right mobile

payment for human needs. (Karsen, et. al., 2019)

Electronic payments increased rapidly due to the online-shopping platforms and internet-

based banking. This is the first option for transferring money to and from the payer or payee. It is

a common option to choose an electronic payment system due to its cost, time and the security of

every transaction that takes place. (Ahmed, A. et al, 2019)

There are numerous factors including simplicity to use, perceived Usefulness with digital

payment system, convenience, the fast growing smartphone penetration in the country, growth of

non-banking payment institutions (payments bank, digital wallets, etc.), progressive regulatory

policies and escalating consumer readiness to the digital payment platform which lead to

exponential growth of the Digital payments in India. UPI, Aadhar linked electronic payments

and improvement of the digital infrastructure are the other key drivers of Digital payments and

are being the game changers. (Shailza, et al 2019)

S. Fatonah et al. (2018) A Review of the E-Payment System in E-Commerce, the

Information Communication Technology age and digital innovation are leading to dynamic shifts

in the business climate, where business transactions continue to move from cash-based to

electronic-based transactions. Not to replace cash, but as a better alternative to cash and

exchange barter, the e-payment system was implemented. It is possible to consider electronic

payments as a payment system using electronic media that does not require cash. A significant

feature of e-commerce is the electronic payment system (e-payment).

Bangko Sentral ng Pilipinas aims to increase the use of electronic payment here in the

Philippines by the year 2020. It is for a seamless, convenient, affordable and secure fund

transfers between banks and electronic money accounts. ( M. Adrian, 2018)

In today’s business world, electronic payments have become a means of payment for

every transaction. Both developed and developing countries adopted this payment system to

provide ease of paying in business transactions. (M. A. Kabir, et al 2016)

The development of the Internet and the arrival of e-commerce fostered digitalization in

the payment processes by providing a variety of electronic payment options including payment

cards (credit and debit), digital and mobile wallets, electronic cash, contactless payment methods

etc. Mobile payment services with their increasing popularity are presently under the phase of

transition, heading towards a promising future of tentative possibilities along with the innovation

in technology. (B. Zlatko, 2016)

Mathew et al (2014) focus on Assessing Technology Differences in Electronic and

Mobile Payment Systems among Developed and Developing Countries, they examined 45 current

electronic and mobile payment systems in developed and developing countries. First, each

payment technology, consisting of SMS, WAP, USSD, NFC (RFID), Smart Card, Internet and

IVR, was evaluated and graded as belonging to one of several major categories. Then, as an

input for sub-sample factor studies, a technology prevalence matrix taken from the previous

stage was used. In their study they found out MS, IVR and PC-based payment technologies were

found to be more prevalent in developing countries, while smart cards appeared most popular in

developed countries. This contrast suggests that developing countries may have bypassed some
established technologies and leapfrogged to mobile EPS instead. Factor analyses were run for

each group and the first factor shows some differences in the main pattern of EPS for developing

and developed countries. Mobile and PC-based technologies stand out when compared with NFC

and smart card technologies for EPS.

According to Brown (2013) , the World Payments Report found that The use of cards

(debit and credit) further accelerated during 2011, with debit card volumes rising 15.8% to a total

of 124 billion transactions, and credit cards climbing 12.3% to a total of 57 billion. The non-cash

arena is led by these two payment instruments, with debit cards being the most common non-

cash payment instrument worldwide. Increased penetration of smartphones and internet use,

advances in technology, and creative products and services are three factors that help drive

growth in mobile and electronic payment transactions. This growth makes the country an

attractive one for banks and non-banks alike.

According to S.Sumanjeet (2009), new financial needs have been generated by the advent

of e-commerce that conventional payment cannot be easily met in many situations. Recognizing

this, virtually all interested parties are exploring various types of electronic payment systems and

issues surrounding electronic payment systems and digital currency. According to this, broadly

electronic payment systems can be classified into four categories: Online Credit Card Payment

System, Online Electronic Cash System, Electronic Cheque System and Smart Cards based

Electronic Payment System. For clients and merchants, every payment system has its advantages

and disadvantages. There are numerous requirements for these payment systems: e.g. protection,

acceptability, convenience, cost, confidentiality, control, and traceability. Instead of

concentrating on the technical specifications of different electronic payment systems, the

researchers therefore differentiate electronic payment systems on the basis of what is transmitted
over the network, and analyze the different electronic payment systems by evaluating the

requirements, characteristics and applicability of each system.

Related Studies

Digital payments can also function as a reminder for payment dues. With the growing

smartphone technology and availability of the internet, people are taking initiatives in switching

to digital payment. Everything can be done with the use of fingertips and there is no need to go

to banks and everyone can go cashless. (G. Ghosh, 2021)

L. Oyalemi, et al (2020) concluded in their study, Electronic payment adoption and

consumers’ spending growth: empirical evidence from Nigeria, that educational attainment,

financial inclusion, income level, internet service availability, awareness, trust, social influence,

safety, security and convenience constitute major determinants of electronic payment adoption.

The use of electronic payment affects the purchase decision of individuals and it increases the

consumption of a Nigerian households. The study also reveals that an average Nigerian

consumer is a rational decision maker. They are aware of the various derivatives of e-payment,

trust in the ability of the e-payment system to deliver as expected and social status in the society.

N.Hamid and A.Y. Cheng (2020) stated in their study about Risk Perception Analysis

on the use of Electronic Payment Systems by Young Adults, that E-Payment systems have

gained varying degrees of adoption worldwide, with some e-payment solutions being widely

accepted while others are comparatively lower. The perceived risk associated with payment

systems is largely considered to be one of the factors leading to the low risk. According to them,
the aim of this research was to define the perception of e-payment risk by young adults and their

behavior towards different payment methods. For the data collection reason, survey

questionnaires were distributed to students from tertiary institutions in a metropolitan city in

Malaysia as the study sample. The findings showed a significant difference in perceived risk

between cash and E-Payment but less significant in terms of volume of purchase.

J.S Shanthini , et al (2018) stated that switching to cashless payments and transactions

shows that the economy is adapting to the current trend. It also shows sustainability and

transparency in economic development.

Dr. N. Rakesh, et al (2018) stated that with the growing banking sector pushing the

acceptance of credit cards and debit cards, almost every Indian today has plastic money in his/her

hands. Making payments and purchases online has made it necessary for Indians to accept

cashless transactions as a way of life. Demonetisation has made India into a digital economy

because of the government’s efforts. It is a thoughtful move to a cashless economy by

minimizing the use of physical currency and more reliance on BHIM-UPI. It can materialize

with pervasive approval of plastic money, online banking, and electronic wallets by the users.

The practice of digital transactions has been picking up and in future most of the transactions

will happen electronically. Although right now, the cashless transactions seem to be limited to

amounts which are not huge, the day is not far off when any transaction will in all likelihood be

only cashless.

In the study of M. Barkhordari and Z. Nourollah (2017), the internet technology

influenced the present banking system due to its capability in enhancing the performance of the

financial operations. The study presents the important factors that influence the use of electronic
payment systems. Results show that the technicalities, procedures and security of transactions are

the factors that influence the use of electronic payment systems.

G. Oksuzoglu and W. Rizvi (2017) stated in their study that the Electronic Payment

System improves the quality of life of an individual by providing ease of payment for online

transactions. The consumers trust the use of electronic payment systems due to its secure

transactions.

According to the study of Z. Bezhovski (2016) , The Future of the Mobile Payment as

Electronic Payment System , with the growing technology, smartphones replaced several things

in our life. From storing data in our phones and using it for mobile payment methods for online

purchases.

S. Zokaee, et al (2012) stated that companies and individuals that are in the electronic

commerce market, choose an electronic payment system that fits their company needs. Safe and

popular electronic payment system is a criteria and major concern in choosing. There are various

ways in transacting using the e-payment systems such as electronic money, credit card, debit

card, charging card and electronic cheque.

R. Nath and L.-d. Chen. (2008). Stated in their study, Determinants of Mobile

Payments: An Empirical Analysis. Journal of International Technology and Information

Management, that mPayment is still in its infancy both in the U.S. and around the world. The

field presents ample opportunities for future research (e.g., enabling technologies, payment

processes, consumer acceptance, etc.). Future research should take a consumer-oriented approach

to first address the issues that are most important to consumer acceptance of mPayment rather

than a technology or process-oriented approach. A theoretical framework that examines these

practitioners in their efforts to pave the way for mPayment adoption in the U.S.

Theoretical Framework

This study uses the Stimulus Theoretical Framework for the novelty technology of the

single platform E-payment System indicates that design and security are the stimulus that

represents the system and features capabilities. The perceived ease of use and perceived

usefulness are the organism. These theories extend the 1996 version of Technology Acceptance

Model by including security factors and use the mediator with the direct and indirect relationship

of the factors and consumers' intention to use the E-payment system.

Figure 1. Stimulus Theoretical Framework

The conceptual framework illustrates the Efficiency of Electronic Payment System of Student

Entrepreneurs of Mariners’ Naga

Efficiency of the EPS as a way for Entrepreneurs’ Adaptability on

Figure 2: Efficiency of Electronic Payment System of Student Entrepreneurs of Mariners’ Naga

Figure 2 shows the emphasis of the Efficiency of Electronic Payment System of Student

Entrepreneurs of Mariners’ Naga. The independent variable covers the impact of new

implemented EPS methods. The dependent variable would be the evaluation efficiency of the

EPS on easing their business transactions.

Research Methodology

Research Design

To identify the efficiency of EPS to student-entrepreneurs, the researchers used a

descriptive qualitative research design. The applied methodology was able to clarify the

proposed statement of the problem, and to highlight the relevant responses and information

gathered from the respondents of the study. The other purpose of this is to identify the

respondents’ perception of the use of technology innovation.

Research Locale

The study will be conducted to six student entrepreneurs of Mariners’ Naga.

Respondents

The researchers will be conducting the purposive sampling technique to a total number of

six student entrepreneurs of Mariners’ Naga. Interviews will be conducted to selected

respondents to validate the data gathered. The researcher selected these respondents to fully

evaluate the EPS’ effectiveness amidst COVID-19 restrictions.

Research Instrument

To determine the efficiency of the electronic payment system to student entrepreneurs of

Mariners’ Naga the researchers will formulate interview questionnaire that will be used in data

gathering.
Research Ethics

The researchers will arrange an online interview in light of the protocols. The researchers will

strictly observe minimum health protocols for respondents who chose to have a face-to-face

interview like proper distancing, wearing facemask and face shield, sanitizing by using alcohol,

avoiding physical contact, and the like to ensure the safety of both respondents and researchers.

The use of Google Meet will be used during the online interview.