Chapter 1

INTRODUCTION

Online transactions are playing a lively role now in these days in terms of shopping, pay

bills and money transfer and many more. Mobile payment referred to as mobile money, mobile

money transfer, and mobile wallet also it refers on payment services operated under financial

regulation and it is performed via mobile devices. Instead of paying with cash, cheque, or credit

cards, a consumer can use any other mobile devices to pay for a wide range of services and

digital or hard goods. In spite of the fact that the concept of using non-coin currency systems it

has a long history. Indeed, money is the lifeblood of economies around the world. More recently,

technology has enabled an entirely form of payment .Today, digital money is not only common,

its support systems has become widely available without the hassle of physically moving large

sums of cash. Mobile payment is being adopted all over the world in different ways. The first

patent exclusively defined "Mobile Payment System" was filed in 2000.

In other developing countries mobile payment have been place as a means of extending

financial services to the community known as the "unbanked" or "under banked", which is

estimated to be as much as 50% of the world's adult population, according to Financial Access'

2009 Report "Half the World is Unbanked". These payment networks are often used for

micropayments. The use of mobile payments in developing countries has attracted public and

private funding by organizations such as the Bill & Melinda Gates Foundation, United States

Agency for International Development and Mercy Corps. Mobile payments are becoming a key

instrument for Payment Service Providers (PSPs) and other market participants, in order to
achieve new growth opportunities, according to the European Payments Council (EPC). The

EPC states that "new technology results provide a direct improvement to the operations

efficiency, In the long run it results in cost savings and in an increase in business volume".

Students nowadays use mobile devices for a variety of activities – from posting to social

media to purchasing concert tickets. Using this technology the students are easily adapted with

mobile banking especially those to who wants to secure with their savings account because it

offers a convenient way to keep track of their finances without going to the bank. The day-to-day

life of a student is demanding and short on free time. Long banking activities like paying bills

and transferring funds are build simple for them through mobile banking. More time can be

finished on the many priorities of a student’s life with the help of this banking apps and mobile

sites.

Internet connectivity have led to a renewed interest in Internet banking among those

specific groups of working individuals. In addition, with the rapid development of mobile and

smart phones, Internet banking has become more helpful to many more individuals, since they

can carry out their banking transactions anywhere and anytime via mobile banking (Lee &

Chung, 2009). Mobile-banking (commonly referred to as M-banking), an extension of Internet

banking, it provides convenience, time independence, rapid response to customers and cost

savings. These benefits serve as an opportunity for banks to increase consumer market through

mobile services. Furthermore, mobile technologies, such as smart phones, PDAs, cell phones,

and iPads are perent and trendy among young adults. This M-banking would serve service

providers well to understand what influences the purpose to use or adopt M-banking innovations

especially among young adults who are likely to be future adopters and users of M-banking – a
worthwhile service to generate revenue from m-banking investments ( Munongo & Chitungo,

2013). According to Yu (2013) regardless of the numerous perceived benefits for customers the

actual usage of m-banking has not increased at a rate as initially expect. They further state that

one of the main reasons for m-banking not being widely accepted, is the lack of trust in m-

banking services. While there are 5 billion mobile users globally, only 200 million make use of

m-banking services (Jeong & Yoon, 2013). Even in developed countries such as Sweden, USA

and the UK, the ratio of mobile banking users and mobile phone users is weak. Many people

who reside in remote rural locations, where only some computers are connected to the Internet,

may welcome the services offered by mobile banking as opposed to the limitation of Internet

banking. The service providers are building investments into the m-banking infrastructure for

effective provision of m-banking services to the low-income market in developing economies.

Mobile banking is a system that letting customers of mobile financial institution (MFI) to

offering banking services of make deposits, withdraw, and to send or receive funds from a

mobile account through a mobile device such as a mobile phone or personal digital assistant.

Mobile banking provide services like account information; payments, deposits, withdrawals, and

transfers; investments; ATM support; and content services (Hossain, 2005).

On the other hand, an e-wallet is an electronic wallet where you can digitally keep your

money. It is often called in other terms like “digital wallet” or “virtual wallet”, e-wallet provides

many distinct ways to transact, such as paying bills or buying things online. An e-wallet often

happens in the form of a mobile application or a website. With your own e-wallet, you can do

and make financial transactions from the ease use of your mobile phone.
 No cash on hand? No problem. With the rise of smartphone usage today, e-wallets are an

even more logical choice than actual wallets. After all, aren’t you more likely to forget your

wallet at home than your phone? As e-wallets exist in the digital space, you may think about how

safe your money is. Most reputable e-wallet providers safeguard your details with security

measures such as One-Time PINs, passwords, and other authentication information.

(Lifestyle, 2020)

In local perspective, the Philippines financial system is undergoing a period of

technological innovations, the changes include a significant increase in the number of alternative

formal channels for delivering financial services. The most recent are the use of mobile banking.

Since the telecommunication industry was liberalized from 65 years of private monopoly

ownership in 1992, there is a rapid growth in cellular mobile telephone services in the country.

By the year 2000, the mobile phone subscriptions surpassed fixed telephone lines with a ratio of

8.3:3.9 per 100 subscriptions (ITU, 2016). At the end of 2012, it indicates that every Filipino

owned a mobile phone regardless of economic status with 101.9 million subscribers exceeding

the total population of the country of 97.1 million. The deficiencies of fixed telephone lines in

underserved and unserved areas facilitated the adoption of mobile devices and short message

services (SMS). Therefore, financial institutions are attracted to reach larger population by

utilizing mobile phones to bring financial services to undertake banking transactions such as

account balance inquiries, monitor checking account transactions, pay utility bills, pay loans,

fund transfer, receive and send remittances and payroll services. It is important distribution

channels through which bank customers can be migrated from brick-and-mortar branches to

minimize banks’ operating expenses (Peevers et al., 2008).

of the world because of the high volume of SMS traffic exchange with sent messages of over

520 SMS per connection per month over the Smart network in Q2 2014, as opposed to 371 per

connection per month for XL Indonesia, and 64 per connection per month for China Mobile.

Based on the global SMS volume, it is estimated that Philippines has generated around 10

percent. As to the number of mobile phone internet users in the Philippines, there are 38.3

million people as of 2018, representing a mobile phone internet penetration rate of only 36

percent (Statista, n.d.). Further, researcher Shane Snow explained that texting became popular in

developing countries because of the low cost of a cell phone and SMS plan, and unlimited

messaging offer compared with the cost of a computer and a broadband connection (Dimacali,

2010). Filipino mobile users are highly SMS literate, which made the proposition of conducting

financial transactions using a smartphone more intuitive. However, digital banking penetration in

the Philippines has been slow based on the study of Ramanathan, Roland & Romano (2014).

While 35 percent are digital consumers who perform online purchases thru smartphone, only 9

percent of the consumers have used the smartphone to conduct banking transactions compared

with 26 Factors influencing behavioural intention to use mobile banking among retail banking

clients percent in developing Asia. The study concluded that the country has the lowest digital

banking penetration across 13 Asian countries. Based on the 1st Quarter 2018 Bangko Sentral ng

Pilipinas (BSP) Financial Inclusion Dashboard, mobile banking penetration in the country is 28

percent. Hence, there is a need to investigate factors that influence the intention of Filipino

consumers to use mobile banking. This study fills in the gap by providing a deeper

understanding of the antecedents for consumer behavioural intention to use mobile banking
given there is a dearth of literature that exists concerning developing countries and is much

needed at this time (Kim, Shin & Lee, 2009; Lin, 2011).

In Global perspective, Mobile banking, which is also referred to as cell phone banking is

“the use of mobile terminals such as cell phones and personal digital assistants (PDAs) to access

banking networks via the wireless application protocol (WAP)” (Zhou, Lu, and Wang, 2010).

The mobile banking is similar to Internet banking in that it provides a fast and convenient way of

performing common banking transactions (Bank Negara Malaysia, 2012). In order to enjoy the

benefits of mobile banking, a user needs a mobile phone that is equipped with the features

required by the bank that provides this service (Bank Negara Malaysia, 2012). Once a user

obtained a registered account for mobile banking from the banking institution, the user would be

able to do banking transactions from anywhere. The mobile banking can be done either by

accessing the bank’s web page through the web browser on the mobile phone, via text

messaging, or by using an application downloaded to the mobile phone (Board of Governors of

Federal Reserve Systems, 2012). Mobile banking allows customers to perform three fundamental

transactions: (i) storing money in an account that is accessible by the mobile device (ii)

completing cash-in and cash-out transactions with the stored account, and (iii) transferring

money among different accounts. (Bank Negara Malaysia, 2012).

Mobile banking allows consumers to be able to access banking services from anywhere.

Businesses and business owners are now able to save time by making use of mobile applications

to process their payments or even receive funds from clients directly to their phone numbers.

Also, it helps students manage their money on their own schedule. And E-wallets allow you to

do different things with your money. Buying load and shopping online are two of the most
popular things most e-wallet users do. You can also link your other financial accounts, such as

your bank accounts or debit cards, to your e-wallet. In this way, your online financial accounts

create an ecosystem, with your e-wallet as the main source of payments or savings.

According to health recommendations, one of the most effective ways to contain the

current COVID-19 epidemic is to avoid personal contact. This means reducing the movement of

people and increasing the time they spend at home as much as possible. In line with these

indications, most banks in the affected countries have reduced the opening hours of their

branches and they recommend their customers use online banking.

To encourage the use of this channel, many banks have taken the opportunity to send out

positive messages and to remind their users of the benefits of online banking. Thus, An e-wallet

or digital wallet is an electronic service, which can be used online or on a mobile phone. It

securely stores users' payment information and passwords and allows you to make and receive

electronic payments. It can be linked to a bank account. These benefits include the ease of

carrying out any transaction 24/7 and enjoying permanent access to all financial information in

real time. Some banks have also tried to promote online banking by sharing tutorials and

expanding the types of transactions customers can carry out remotely.

For users themselves, there are also a number of factors driving the increased use of

online banking, such as the fear that cash could spread coronavirus. Analysts say the

psychological factor of people thinking of cash as “unclean” could prompt more adoption of

payment methods like Apple Pay and Venmo. (US data, 15 March 2020)