Determinants of Diffusion of Online Payment Systems in Addis Ababa

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Date

2017-08-12

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Publisher

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

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