TRNG I HC M TP. HCM UNIVERSITÉ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL MBAVB4 PHAN VU AN FACTORSAFFECTINGCONSUMER’SUSEOFBANKCARD PAYMENTATPOSTERMINAL ASTUDYOFTECHNOLOGYACCEPTANCEMODEL MASTER PROJECT MASTER OF BUSINESS ADMINISTRATION (PART-TIME) S UPERVISOR: DR. LE THAI THUONG QUAN HO CHI MINH CITY 2012 Page | i STATEMENTOFORIGINALAUTHORSHIP I certify that the substance of the research thesis has not been submitted for any degree and is not currently being submitted to any other degree or qualification. I also certify that, to the best of my knowledge, any help received in preparing this thesis, all sources used have been acknowledged in this thesis. ________________________________ Phan Vu An January 26 th , 2012 Page | ii ACKNOWLEDGMENTS “Stay hungry, stay foolish” – Steve Jobs I don’t know much about Steve Jobs but I am inspired by his philosophy to build up Apple and stories about him which become a legend. To start and complete a mission, it is necessary to be hungry and foolish from the first second. That has been my motto since I started this final project. I owe a debt of gratitude to many people who helped me complete this thesis. I would like to acknowledge the help of all. First and foremost, I would like to thank my family who give me a great encouragement and support to complete not only 2-year journey of this MBA program but also all struggles I have met in study as well as work. I would like to express my warmest thanks to my supervisor, Dr. Le Thai Thuong Quan, for all challenges, enthusiastic encouragement and precious comments. Although I am the only author reported on the cover of this thesis, and I take full responsibility for the views expressed here or any remaining errors, I would like to highlight that the fingerprint of Dr. Le Thai Thuong Quan is well anchored in the following pages. His striving for clearness of exposition and challenges improved my work considerably. I would like to express my thanks for my sponsors, Mr. Le Tri Thong and Mr. Tran Duy Khiem at Dong A Bank, for your great sponsorships from the beginning to the end. Banking and financial card are quite new and challenge for technical guys. At the first steps to find out project’s idea, your supports helped me to understand from first cut to deep dive in specific problems. I would believe this report is worthy of your great supports. I would like to express my thanks for my friends, especially Ms. Nguyen Thi Kim Thoa and Ms. Vu Phuong Nghi, who helped me to review this report many times, corrected my English and gave valuable comments. Every time I talk with you, I always explored something new which helped me to improve towards betterment. To other friends who gave me a hand in data collection as well as discussion and opinions, please know that your comments are of great value to the completion of my project. Last but not least, I would like to express my thanks to Solvay program, all professors, all coordinators and all friends at MBAVB4 who have accompanied me in this journey. I would take this chance to wish you all the best in your future endeavors HCMC, January 26 th , 2012 Phan Vu An Page | iii SUPERVISOR’SCOMMENTS The topic is practical and the thesis has been done carefully and thoroughly. The choice of TAM model for this problem is suitable. In addition, the author has fulfilled an extensive literature review to propose a framework for analysis. The sample size of the survey is acceptable and the data analysis has been done appropriately to give meaningful results. This thesis is ready for public defense. ________________________________ Dr. Le Thai Thuong Quan January 30 th , 2012 Page | iv ABSTRACT Purpose – This study addresses factors that affect consumer’s use of card payment at POS terminal. In Vietnam, the growth of cards and POS terminal are impressive in recent years. It has been recorded that there were over 32 million of card and 54,000 POS terminals in Vietnam at the end of year 2010. However, consumers are still not so familiar with card payment at POS terminal. This study aims to choose an appropriate model to evaluate consumer decision in card payment, evaluate factors affected to consumer intention to use POS for payments, and from there, contribute to the understanding on consumer and merchant for business strategy development of bank by quantitative approach. Design/Methodology/Approach – The study is constructed base on Technology Acceptance Model (TAM) with additional factor which are Perceived Usefulness, Perceived Ease-of-Use and Perceived Creditability. Electronic questionnaire was distributed via email to consumers. The selected respondents are categorized into 2 groups, non-credit and credit consumer. After reliability tests, in-depth analysis is conducted to understand factors affecting consumer’s use and independent sample t-tests/ANOVA are used to examine difference of demographic dimensions. Key Findings – Toward consumers who have used card payment in POS terminal, demographic dimensions are not the keys drive usage behavior. Consumers recognize Perceived Usefulness, Perceived Ease-of-Use and Perceived Creditability affecting to their use significantly. Top 3 recommendations are (1) banks need better care for debit card users by product/service diversification, (2) the target consumer group are recommended, and (3) personal finance education. Originality/Value – Study helps to conceptualize factors affecting to consumer’s use of card payment at POS terminal in Vietnam context. However, the respondents received questionnaire via email. 80% of our survey population merely consisted of white collar officers mostly in Hanoi and Ho Chi Minh City, two major cities in Vietnam. There are other potential groups left open, such as housewife/househusband, students. These are opportunities for further studies to explore potential loyal consumers. Key words – Card payment, POS terminal, debit card, credit card, ATM card, Technology Acceptant Model (TAM), Vietnam. Page | v TABLEOFCONTENTS STATEMENT OF ORIGINAL AUTHORSHIP i ACKNOWLEDGMENTS ii SUPERVISOR’S COMMENTS iii ABSTRACT iv TABLE OF CONTENTS v LIST OF FIGURES viii LIST OF TABLES ix LIST OF ABBREVIATIONS x CHAPTER 1: INTRODUCTION AND RESEARCH PROBLEM 1 1. Introduction 1 1.1. Bank Card Overview 1 1.2. Development of ATM and POS terminal 2 1.2.1. ATM 2 1.2.2. POS terminal 3 1.3. Prominence of cash payment 4 2. Research Problem, Question, Objectives and Scope 5 2.1. Research Problem 5 2.2. Research Question 6 2.3. Research Objectives 7 2.4. Research Scope 7 3. Thesis Structure 8 CHAPTER 2: LITERATURE REVIEW & RESEARCH FRAMEWORK 9 1. Card Payment at POS terminal 9 2. Technology Acceptance Model (TAM) 11 3. Framework for consumer’s use of card payment at POS terminal 15 3.1. Categorization of Respondent 16 Page | vi 3.2. Perceived Usefulness 16 3.3. Perceived Ease-of-Use 19 3.4. Perceived Creditability 20 3.5. Personal characteristics of consumers 21 3.6. Research Framework 22 CHAPTER 3: RESEARCH METHODOLOGY & DESIGN 24 1. Methodology 24 1.1. Research Design 24 1.2. Research Approach 24 1.2.1. Secondary research 25 1.2.2. Primary research 26 1.3. Research Strategies 26 2. Questionnaire and Sampling 27 3. Data Analysis Procedures 30 3.1. Descriptive statistics analysis 30 3.2. Data Examining and Reliability Test of the Measurement Variables 30 3.3. Compare Means: Independent Sample T-test & One Way Analysis of Variance (ANOVA) 31 CHAPTER 4: ANALYSIS & DISCUSSION 32 1. Descriptive Analysis 32 1.1. Demographic Characteristics of Respondents 32 1.2. Behavioral Characteristics of Respondents on Bank Card Use 36 2. Reliability Test 40 2.1. Non-Credit Respondent 41 2.1.1. Perceived Usefulness 41 2.1.2. Perceived Ease-of-Use 42 2.1.3. Perceived Creditability 43 2.2. Credit Respondent 44 Page | vii 2.2.1. Perceived Usefulness 44 2.2.2. Perceived Ease-of-Use 45 2.2.3. Perceived Creditability 46 3. Factors affecting Actual Use 49 3.1. Perceived Usefulness 49 3.2. Perceived Ease-of-Use 52 3.3. Perceived Creditability 54 4. Differences on Demographic Dimensions 55 4.1. Gender of Respondents 55 4.2. Age-Group of Respondents 56 4.3. Education Level of Respondents 57 4.4. Income of Respondents 59 5. Barriers of Card Payment at POS terminal 61 5.1. Fee charged at merchant – Perceived Cost of Consumers 61 5.2. Reason to say NO use 63 CHAPTER 5: CONCLUSION 65 1. Conclusion 65 2. Contributions and Managerial Implications 67 3. Study limitation and Recommendation for Further Study 73 REFERENCES 75 APPENDIX 1: QUESTIONNAIRE 78 APPENDIX 2: Types of Bank Card’s Function in Vietnam 85 APPENDIX 3: History and Development of POS terminal 93 Page | viii LISTOFFIGURES Figure 1 - Number of ATMs and POS terminals, 2005-2010 3 Figure 2 - Market Share of ATM machines and POS Terminals in Vietnam in 2010 6 Figure 3 - Thesis Structure 8 Figure 4 - The Original TAM 12 Figure 5 - First modified version of TAM 13 Figure 6 - Final version of TAM 14 Figure 7 - Research Framework 23 Figure 8 - Question Flowchart 28 Figure 9 - Data Analysis Procedures 30 Figure 10 - Gender & Age Group of Respondents 34 Figure 11 - Education Level of Respondents 35 Figure 12 - Bank & Card Used of Respondents 36 Figure 13 - Cross Tabulation of Income and Willing-to-Pay Amount 38 Figure 14 - Cross Tabulation of Income and Occupation 38 Figure 15 - Preferable Places to Use Card Payment 39 Figure 16 - Perceived Usefulness of Non-Credit Respondents 50 Figure 17 - Perceived Usefulness of Credit Respondents 51 Figure 18 - Perceived Ease-of-Use of Non-Credit and Credit Respondents 53 Figure 19 - Perceived Creditability of Non-Respondents and Credit Respondents 54 Figure 20 - Perceived Creditability by Income if Non-Credit Respondents 61 Figure 21 - Frequency Use of Card Payment at POS terminal 62 Figure 22 - Reason of NO use Card Payment at POS terminal 63 Figure 23 - Vietcombank promotes card payment at Big C supermarket 68 Figure 24 - 5-step model 71 Figure 25 - ATM Cards 85 Figure 26 - ATM Cards Category Performance (2005 - 2010) and Forecast (2010 - 2015) 86 Figure 27 - Debit Card 88 Figure 28 - Credit Card 89 Figure 29 - Prepaid Cards of Sacombank and Asia Commercial Bank 91 Figure 30 - Typical Configuration of POS terminal 93  Page | ix LISTOFTABLES Table 1- Financial Cards: Number of Cards in Circulation 2005-2010 2 Table 2 - Financial Cards and Payments in Vietnam in 2010 2 Table 3 - Applications, participants, country and setting used for applying TAM 15 Table 4 - Questionnaire for measuring factors 28 Table 5 - Cross Tabulation of EVER-USE-CARD-PAYMENT and INCOME 33 Table 6 - Cross Tabulation of Sector and Occupation 34 Table 7 - Reliability of Perceived Usefulness for Non-Credit Respondents 41 Table 8 - Reliability of Perceived Usefulness for Non-Credit Respondents after removal of PU2 and PU4 42 Table 9 - Reliability of Perceived Ease-Of-Use for Non-Credit Respondents 43 Table 10 - Reliability of Perceived Creditability for Non-Credit Respondents 43 Table 11 - Reliability of Perceived Usefulness for Non-Credit Respondents after removal of PU2 and PU4 44 Table 12 - Reliability of Perceived Ease-Of-Use for Non-Credit Respondents 45 Table 13 - Reliability of Perceived Ease-Of-Use for Non-Credit Respondents after removal of PEU4, PEU7 46 Table 14 - Reliability of Perceived Creditability for Credit Respondents 46 Table 15 - Summary of Reliability Analysis 47 Table 16 - Results for Relevant Research Variables 47 Table 17 - T-test result of Gender of Respondent 56 Table 18 - ANOVA result of Age of Respondents 57 Table 19 - T-test result of Education Level of Respondents 58 Table 20 - ANOVA result of Income of Respondents 60 [...]... this study is addressed to find out any factors affecting consumer’s use of bank card payment at POS terminal When a consumer has a bank card (ATM card, international debit card, credit card) , which factors will affect them to use card payment at POS terminal, as construction of Technology Acceptance Model, called TAM (Davis, 1985)? Consumer will use card payment at POS terminal due to Usefulness or Ease -of -Use. .. purse Smart card, known as electronic cash, has been defined as a payment card that carries an embedded computer chip with memory and interactive capabilities that allow it to exchange data at an electronic point of service (POS) terminal (Worthington, 1998b, p.137; Isabelle et al 19994) 1 Card Payment at POS terminal A bank card is a plastic card provided by a bank that may be used as a cheque card or... financial card market in Vietnam In 2011 Annual Report of Vietnam Bank Card Association, Vietnam has got a significant change in all fields of financial card, such as card issue, payment, diversity and network development Table 2 - Financial Cards and Payments in Vietnam in 2010 Item Unit Year 2010 Number of Financial Card in Total (accumulated) Million Card 32 Revenue of Payment via all types of Cards... Revenue of Cash Withdraw at ATM Million USD 21,474 # of ATM (accumulated) Machine 11,696 # of POS terminal (accumulated) Machine 53,952 Source, Vietnam Bank Card Association, 2011 1.2 Development of ATM and POS terminal 1.2.1 ATM Figure 1 shows a 6-time increase of number of ATM machines from 2005 to 2010; this is huge effort of banks to build up the infrastructure Beside the basic features which are cash... capital collection It is a remarkable number in current financial activities Page |2 Up to 2010, there were 49 banks that had issued financial card, among these 18 banks issued international debit card (such as VISA Debit) and 17 banks issued international credit card Nearly 50% of commercial banks in the market joined financial card market with over 200 card brands with many different features Table... literature review include journals, books, articles related to such as Annual Report 2010 of Vietnam Bank Card Association, International Journal of Service Industry, International Journal of Retail & Distribution Management, International Journal Business and Society, International Journal of Marketing Studies, International Journal of Bank Marketing Databases are found in Emerald Insight ...Page |x LIST OF ABBREVIATIONS Abbreviation Description ATM Automated Teller Machine POS Terminal Point -Of- Sale Terminal PIN Personal Identification Number TAM Technology Acceptance Model PU Perceived of Usefulness PEU Perceived Ease -of -Use PC Perceived Creditability One way ANOVA One Way Analysis of Variance Page |1 CHAPTER 1: INTRODUCTION AND RESEARCH PROBLEM 1 Introduction 1.1 Bank Card Overview... upgraded, banks deployed the specific applications, such as local debit card, while Vietcombank installed ATM network, the market had a milestone change at that time Following that, other banks invested to develop local debit cards People had known about payment via bank card as convenient payment which is easy to use, easy to issue by personal bank account From there, there has been a significant change of. .. options as plug-ins or as part of an entire site application In that sense, the use of POS terminal is considered as an ecommerce application as online shopping, e-banking, online banking, etc P a g e | 16 3.1 Categorization of Respondent Thomas Foscht et al (2010) indicated that that a person’s preference for a particular payment method is dependent on his/her personal attributes Additionally, the payment. .. have savings that are not held in bank This suggests a lack of understanding of benefits of using banks for banking services in generally and the habit to store cash in hand In particular, it can be a lack of understanding on card benefits and non-cash payment on POS terminal Besides, barriers are P a g e | 20 largely a perceived lack of value or convenience in banking procedures Also in that research . consumer’s use of bank card payment at POS terminal. When a consumer has a bank card (ATM card, international debit card, credit card) , which factors will affect them to use card payment at POS terminal, . et al. 1999 4 ). 1. Card Payment at POS terminal A bank card is a plastic card provided by a bank that may be used as a cheque card or debit card or to get money from client’s account out of. consumers are still not so familiar with card payment at POS terminal. This study aims to choose an appropriate model to evaluate consumer decision in card payment, evaluate factors affected