Factors Affecting Mobile Payment Adoption by Merchants in Ethiopia

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Addis Ababa University


Nowadays the world witnessed a rapid growth in mobile commerce and widespread use of mobile devices. The growth of mobile commerce depends on widely accepted mobile payment systems. However, this trend is not well experienced in developing countries like Ethiopia. Even though merchants somehow benefited from the rapid growth in electronics commerce and use of mobile devices in e-commerce, they still hesitate to effectively employ in their day to day transactions. Little research has been conducted to examine and explain the merchants' views on the new payment technology.The purpose of this study is to identify factors affecting merchants’ adoption of mobile payment in Ethiopia considering CBE Birr and M-birr as a case. Accordingly, it is tried to answer the question “What are the factors that affect merchants’ adoption of mobile payment in Ethiopia?” The study employed a descriptive survey and adopted a research model from ÖRS (2018). The model is build based on the most frequently used constructs affecting the latent variable in the mobile payment system. The variables reflected in this study are usefulness, ease of use, security, cost, compatibility, social influence, enjoyment, anxiety, knowledge, and innovativeness. Thus, this study reviews different models and pick this model since it is best for the study area with respect to merchants’ adoption of mobile payment.Data was gathered from merchants in Addis Ababa and Oromia special zone, surrounding Addis Ababa who are using CBE Birr and M-birr mobile payment system. The survey was conducted using a self-administered questionnaire. Out of 376 questionnaires that have been distributed to participants, 363 valid questionnaires were collected and used for data analysis. The proposed mobile payment model was tested using a partial least square with the help of the SmartPLS software. The proposed mobile payment model explained 94.8% overall variance in adoption. The empirical evidence of the study indicated that ease of use, usefulness, relative advantage, trust, risk, attitude and cost are influencing factors for mobile payment adoption whereas compatibility was found to have an insignificant effect on merchants’ mobile payment adoption. Attitude is the most influencing factor of the merchant's mobile payment adoption. The study provides a wide-ranging understanding of the factors that affect merchants’ adoption of mobile payment technology in Ethiopia. This can help the service providers to understand merchants’ intentions and make strategy accordingly to ensure financial inclusion. Considering the shortage of literature that currently exists in general about technology adoption, in particular about mobile payment adoption in Ethiopia, the study can be considered as an addition to mobile payment-related literature and can serve as a springboard for future researchers on the topic. Since this study was conducted in Addis Ababa, Ethiopia further studies may also consider selecting respondents from other areas outside of Addis Ababa, as well as incorporating additional social and cultural beliefs in understanding the affecting factors to adopt mobile payment.



Mobile Payment, Merchants, Cbebirr, M-Birr, Technology Acceptance Model