Determinants of Diffusion of Online Payment Systems in Addis Ababa
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Date
2017-08-12
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Addis Ababa University
Abstract
This research was carried out with the objectives of examining the key Determinants of Diffusion
of Online Payment Systems in Addis Ababa and the relationship among these key determinants in
the case of potential adopter buyers and potential adopter sellers. It used the five characteristics
of innovation – relative advantage, compatibility, simplicity, trialability and observability – of
the Diffusion of Innovations Theory (DIT) by Everett M. Rogers. Questionnaires were distributed
and 342 from potential adopter buyers and 96 from potential adopter sellers were finally used
for analysis using SPSS software. Frequency distributions were checked to summarize
demographic profiles, correlation analysis was used to examine the relationship among key
determinants of diffusion and multiple regression analysis were used to check the effect of
innovation attributes on the diffusion of online payment system in Addis Ababa. The results show
that, for the case of potential adopter buyers, only compatibility, trialability and observability
were found to be significantly determining diffusion of online payment system in a positive
direction and for the case of potential adopter sellers, only relative advantage has shown a
significant influence which was positive. The determinants were also found to have a positive
relationship among each other. As a result, the researcher recommends that banks or other
financial institutions that will be given the task to facilitate online payment system shall operate
in accordance with the findings by focusing on compatibility, trialability and observability when
designing marketing programs for potential adopter buyers and focus on relative advantage
features when designing marketing programs for potential adopter sellers.
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Keywords
Diffusion of Innovation, Innovation Characteristics, Online Payment System