M. P.

BIRLA INSTITUTE OF MANAGEMENT, BANGALORE (Associate Bharatiya Vidya Bhavan) A SYNOPTIC NOTE ON A study on the compliance of users towards Mobile Payment Technology BY GURUPRASAD PATEL MBA Fourth Semester (Batch 2010-2012)

Under the guidance and supervision of Prof.Hemanth Kumar Senior Professor M P BIRLA INSTITUTE OF MANAGEMENT (Associate Bharatiya Vidya Bhavan) FEBRUARY 2012

RESEARCH METHODOLOGY AND DESIGN Background of the study: Mobile financial services also referred to as mobile money, mobile

payment, mobile banking, mobile money transfer and mobile wallet generally refer to payment services operated under financial regulation and performed from or via a mobile device. Mobile payment is an alternative payment method. Instead of paying with cash, cheque or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods such as: Music, videos, ringtones, online game subscription or items, wallpapers and other digital goods. Transportation fare (bus, subway or train), parking meters and other services Books, magazines, tickets and other hard goods.

Purpose of Literature Review y To identify the problem statement y To understand the secondary data that has been gathered in the field of the study y To attempt to make new findings on the problem statement without reinventing y What has already been done in this field of study? y To understand the scenario changes in mobile payment

Methodology of literature review: Review of the literature has been done with the help of the following sources: y The Internet y Publications and articles y Journals

1. Mobile Payment Systems and Services: An Introduction Mahil Carr, IDRBT Hyderarbad Link: http://www.google.co.in/url?sa=t&rct=j&q=mobile%20payment%20systems%20a nd%20services%3A%20an%20introduction%20mahil%20carr%2C%20idrbt%20h yderabad&source=web&cd=1&ved=0CDUQFjAA&url=http%3A%2F%2Fwww. mpf.org.in%2Fpdf%2FMobile%2520Payment%2520Systems%2520and%2520Ser vices.pdf&ei=AlAqT4ekII_NrQfsw4zfDA&usg=AFQjCNGVqRwOSwkeMBfb0S hCCQjHaOdiCw

Mobile commerce is a natural successor to electronic commerce. The capability to pay electronically coupled with a website is the engine behind electronic commerce. Electronic commerce has been facilitated by automatic teller machines (ATMs) and shared banking networks, debit and credit card systems, electronic money and stored value applications, and electronic bill presentment and payment systems. Mobile payments are a natural evolution e-payment schemes that will facilitate mobile commerce. A mobile payment or m-payment may be defined, for our purposes, as any payment where a mobile device is used to initiate, authorize and confirm an exchange of financial value in return for goods and services (Au and Kauffman, 2007). Mobile devices may include mobile phones, PDAs, wireless

tablets and any other device that connect to mobile telecommunication network and make it possible for payments to be made (Karnouskos and Fokus, 2004). The realization of mobile payments will make possible new and unforeseen ways of convenience and commerce. Unsuspected technological innovations are possible. Music, video on demand, location based services identifiable through mobile handheld devices procurement of travel, hospitality, entertainment and other uses are possible when mobile payments become feasible and ubiquitous. Mobile payments can become a complement to cash, cheques, credit cards and debit cards. It can also be used for payment of bills (especially utilities and insurance premiums) with access to account-based payment instruments such as electronic funds transfer, Internet banking payments, direct debit and electronic bill presentment.

2. What Influences Consumers Intention to Use Mobile Payments? Key Pousttchi, Dietmar G. Wiedemann (Mobile Commerce Working Group, Chair of Business Informatics and Systems Engineering, University of Augsburg,) Link: http://www.google.co.in/url?sa=t&rct=j&q=what%20influences%20consumers%E 2%80%99%20intention%20to%20use%20mobile%20payments%3F%20%20%20 %20%20%20key%20pousttchi%2C%20dietmar%20g.%20wiedemann%20&sourc e=web&cd=1&ved=0CC0QFjAA&url=http%3A%2F%2Fclassic.marshall.usc.edu %2Fassets%2F025%2F7534.pdf&ei=JFEqT5_xAczprQf376HfDA&usg=AFQjCN HoqcweCitWWelT_7jjF_hFJQtPxw

Mobile payments represent an extremely interesting paradox in the world of mobile telecommunications, still not showing success in most markets. Customer

acceptance turned out to be a decisive factor. In order to gain a deeper understanding of consumer behavior this paper introduces a consumer acceptance model that addresses perceived usefulness, perceived ease of use, subjective security, and task-technology fit. Our empirical research was conducted online operating as a mix between an experiment and an online survey instrument to measure the constructs. The research (N = 1104) confirms findings from technology acceptance and task-technology fit literature, whereas subjective security was not confirmed as driver of mobile payment acceptance.

3. Evolute Systems- the Mobile Payment Concept Link: http://www.google.co.in/url?sa=t&rct=j&q=.%20evolute%20systems%20the%20 mobile%20payment%20concept%20&source=web&cd=1&ved=0CEMQFjAA&ur l=http%3A%2F%2Fwww.evolute-sys.com%2Fcase_studies%2Fmobile-paymentcs.pdf&ei=YVEqT4pby82tB3Q0ckM&usg=AFQjCNE5mB02RDY0HjHKEQjcIKWJI2PSFw

A mobile payment is any payment where a mobile device is used to initiate, authorize and confirm an exchange of financial value. Mobile devices may include mobile phones, PDAs, wireless tablets and any other device that connect to mobile telecommunication network and make it possible for payments to be made. The realization of mobile payments has made possible new and unforeseen ways of convenience and commerce. Music, video on demand, location based services identifiable through mobile handheld devices procurement of travel, hospitality, entertainment and other uses are possible when mobile payments become feasible

and ubiquitous. Mobile payments can become a complement to cash, cheques, credit cards and debit cards. It can also be used for payment of bills (especially utilities and insurance premiums) with access to account-based payment instruments such as electronic funds transfer, Internet banking payments, direct debit and electronic bill presentment. Mobile phones as a delivery channel for extending banking services have off-late been attaining greater significance. The rapid growth in users, wider coverage of mobile phone networks and increasing bandwidths have made this channel an important platform for extending banking services to customers.

4. Wikipedia Mobile payment Link http://en.wikipedia.org/wiki/Mobile_payment

Mobile

financial

services

also

referred

to

as mobile

money, mobile

payment, mobile banking, mobile money transfer and mobile wallet generally refer to payment services operated under financial regulation and performed from or via a mobile device. Although financial institutions and credit card companies have implemented

solutions that provide mobile access to their services, in 2011, a number of mobile communication companies, such as mobile network operators,

major telecommunicationsinfrastructure and handset multinationals such as Ericsson and Internet companies such as Google announced their entrance to mobile payments.

Mobile payment is an alternative payment method. Instead of paying with cash, cheque or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods such as: Music, videos, ringtones, online game subscription or items, wallpapers and other digital goods. Transportation fare (bus, subway or train), parking meters and other services Books, magazines, tickets and other hard goods. There are four primary models for mobile payments: 1. Premium SMS based transactional payments 2. Direct Mobile Billing 3. Mobile web payments (WAP) 4. Contactless NFC (Near Field Communication)

5. Mobile Payment in India - Operative Guidelines for Banks Link: http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=1365

With the rapid growth in the number of mobile phone subscribers in India (about 261 million as at the end of March 2008 and growing at about 8 million a month), banks have been exploring the feasibility of using mobile phones as an alternative channel of delivery of banking services. A few banks have started offering information based services like balance enquiry, stop payment instruction of cheques, record of last five transactions, location of nearest ATM/branch etc. Acceptance of transfer of funds instruction for credit to beneficiaries of same/or another bank in favor of pre-registered beneficiaries have also commenced in a few banks. Considering that the technology is relatively new and due care needs to be

taken on security of financial transactions, there has been an urgent need for a set of operating guidelines that can be adopted by banks.

For the purpose of these Guidelines, mobile payments is defined as information exchange between a bank and its customers for financial transactions through the use of mobile phones. Mobile payment involves debit/credit to a customers accounts on the basis of funds transfer instruction received over the mobile phones.

6. Mobile Payments Future Link: http://www.mobilepaymentsworld.com/readarticle.aspx?s=10umANsRpF5eeez&id =392

M-payments remain a key enabler of the 3G services which network operators plan to provide. The current thinking, though, is to piggy-back on the bank-built payment system rather than to construct a new one.

Cooperation, not competition, is the order of the day, with mobile operators recognizing that taking the risk of managing macro-payments is not their role. The Mobile Payments Forum, launched by the global card schemes and now including key telco members, is playing a key role in enhancing cooperation between the two industries.

7. From mobile to mobile commerce: an overview in the Indian perspective Asghar Afshar Jahanshahi, Khalil Md Nor, Ali Akbar Hozhabri, Seyeda Mohammad Sadeq Khaksar. Link: http://www.google.co.in/url?sa=t&rct=j&q=mobile%20payment%20systems%20a nd%20services%3A%20an%20introductionmahil%20carr%2C%20idrbt%20hyder arbad&source=web&cd=6&ved=0CFIQFjAF&url=http%3A%2F%2Fwww.interna tionalconference.com.my%2Fproceeding%2F2ndicber2011_proceeding%2F1792nd%2520ICBER%25202011%2520PG%2520758770%2520Mobile%2520to%2520Mobile%2520Commerce.pdf&ei=72krT66zA8H RrQf5uv28DA&usg=AFQjCNFQasZi9RMCEFgU64pLjccyMIyyfg

In the last few years, Mobile commerce has attracted considerable attention in India. It will enable millions of people around the world to access web information services easily. It is believed to be driving substantial changes in the way business is conducted in many industries, especially in information technology, telecommunications, and financial services. In this paper the importance of mobile commerce is argued because the m-commerce represents the extension of the Internet beyond the static terminal of the personal computers, or even the TV, into a more nimble, anytime, anywhere and anyplace context. We attempt to prepare a deep overview on mobile and mobile commerce in the Indian context. In this work we try to identify several most important Categories of M-commerce Applications amongst various sections society in last few years. This paper also explain the basic issue of mobile commerce to help business managers, especially those without IT background, to understand the impacts of mobile commerce on current businesses as well as to identify new business prospects in future. Finally, well

look into the situations of the Mobile Telephony Market both in the world and India.

8. M-payments - e-cash on the move Norman Frankel Link: http://www.mobilepaymentsworld.com/readarticle.aspx?s=48i4e5f9yD9bJfa&i d=199

Norman Frankel has been working in the field of mobile commerce for seven years, first from a card payments perspective at NatWest, then as a consultant to mobile operators at LogicaCMG and now as a mobile payments business service provider. "Mobile commerce has often been viewed as next year's application that never quite materializes. However, despite all the negative views, the evolution of the customer to use mobile payments is steadily growing - though rarely driven from the traditional payments industry," he says.

9 Exploring Merchant Adoption of Mobile Payment Systems: An Empirical Study Niina Mallat (Helsinki School of Economics) Virpi Kristiina Tuunainen Helsinki School of Economics) Link: http://www.jstor.org/pss/10.2979/ESJ.2008.6.2.24?searchUrl=%2Faction%2FdoBa sicSearch%3FQuery%3Dpayments%2Bthrough%2Bmobile%26acc%3Doff%26wc %3Don&Search=yes

The growth of mobile commerce depends on widely accepted mobilr payment systems. Although new mobile payment systems have been increasingly introduced in Asia, Europe and the United States, their adoption has remained modest. Little research has been conducted to examine and explain adopters view on the new payment technology. In this article, we explore merchant adoption of mobile payment systems empirically and discuss factors that drive and inhibit their adoption. Our results suggest that the main adoption drivers are related to the means of increasing sales or reducing the cost of payment processing, whereas the barriers to adoption include complexity of the systems, unfavourable revenue sharing models, lack of critical mass, and lack of standardisation. Based on our findings, we propose a conceptual framework of adoption enablers, drivers and barriers with propositions to guide future research in this emerging area. Implications for practice and means to overcome the barriers are suggested.

10. Mobile Payment Procedures Nina Kreyer (University of Augsburg) Key Pousttchi (University of Augsburg) Klaus Turowski (University of Augsburg) Link: http://www.jstor.org/pss/10.2979/ESJ.2003.2.3.7?searchUrl=%2Faction%2FdoBas icSearch%3FQuery%3Dpayments%2Bthrough%2Bmobile%26acc%3Doff%26wc %3Don&Search=yes The existence of standardisation and widely-accepted mobile payment procedures is crucial for successful business-to-customer mobile commerce. Customers acceptance of mobile payment procedures mainly depends on the issues of cost, security, and convenience. In particular, it is important that a procedure can be

used over a variety of payment scenario such as mobile commerce, electronic commerce, stationary merchant, & consumer to consumer. Current payment procedures can be categorised by using strategic, participation and operational criteria, based on the morphological method. The proposed scheme allows three types of applications: merchant and customers can analyze and represent their preferences for mobile payment procedures is a structured way, (prospective) mobile payment service providers may analyse their market expectations and develop mobile payment procedures according to these, and different market participants may use it as a basis for standardization.

Project title: A study on the compliance of users towards Mobile Payment Technology

Problem statement:

Although the use of plastic card is more popular with shoppers, how they perceive the use of mobile payment forms the basis for the problem statement of the study.

Objective of the study: The primary objective of the research is to find out the customers point of view on the use of Mobile Payments. The secondary objectives are: 1. To know the preferred mode of payment of consumers 2. Perception of the customers on the use of mobile payments

3. To find out whether the use of mobile payment has an impact on the buying behavior of the customer 4. To compare mobile payment to other modes of payment 5. To understand the use of mobile payment as a strategy to ensure and uphold competitiveness of the company The study of the above aspects will give a clear understanding of the customers preferred mode of payment and to precisely concentrate on their view on the use of Mobile Payment.

Need of the study: As the number of frauds are increasing with the use of plastic cards, the need for new modes of payments is necessary, thus the mode of mobile payment comes into picture as it is more secured and convenient when compared to cash or plastic cards.

Scope of the study: The scope is limited to the extent of the place, time and the information collected during the project. It is done as a part of academic study. The scope of the study limited to information provided by the people of Bangalore city considered for the research .The information collected is limited to the academic knowledge gained by the student during the study of the course.

Research methodology: a) Primary data: Primary data refers to the data collected first hand. Primary data are classified into two qualitative and quantitative. b) Qualitative: The qualitative data are the first hand experiences and data collected from the samples. The qualitative primary data will be collected based on observation, supervision and interviews of the sample.

Quantitative: The quantitative data is collected using questionnaires. Since the research is focused towards customers view on the use of mobile Payment the use of the primary data becomes necessary. c) Secondary data: Secondary data refers to the data which are already collected and published in the past. Information has been collected from various secondary sources such as e-journal, articles, previous research reports, ebooks. The secondary data becomes necessary for the purpose of forming a basis of our study and to understanding the various aspects of our research.

Nature of the study: This is an explorative study and concerns with finding the audience point of view on the use of Mobile Payment. Exploratory research is a type of research conducted because a problem has not been clearly defined, thus this research will help in determining the best research design, data collection method and selection of subjects. Exploratory research often relies on secondary research such as reviewing available literature and/or data, or qualitative approaches such as informal discussions with consumers, management or competitors, and more formal

approaches through in-depth interviews, focus groups, projective methods, case studies or pilot studies.

Sampling: Cluster-Convenience sampling is used. Sampling is concerned with the selection of a subset of individuals from within a population to estimate characteristics of the whole population. For the purpose of this study cluster convenient sampling is chosen. Convenience sampling is a non-probability sampling technique where subjects are selected because of their convenient accessibility and proximity to the researcher, clusters can be chosen from a cluster-level frame, with an elementlevel frame created only for the selected clusters The data is categorized based on age group and educational qualification.

Hypothesis: With the above as a background we are now in a position to present our hypothesis. The hypothesis will be tested on the data consisting of recall, recognition and recovery obtained from separate samples of respondents at a particular point of time.

H1: The use of mobile payment is encouraged by the users H2: The use of mobile payment is not encouraged by the users

H3: Perceived usefulness will positively affect intended use of a mobile payment procedure. H4: Perceived ease of use will positively affect intended use of a mobile payment procedure. H5: Perceived ease of use will positively affect Perceived usefulness of a mobile payment procedure.

Tools used: A structured questionnaire will be used for data collection and for the analysis. The statistical tools used are- chi square, t- test, anova and the pictorial representations used are- bar chart, graph, pie diagram.

Limitation of the study: This research investigation is beset with the following limitations: y The research is confined to only one geographical area y The research has a sample of 50 respondents only y Prejudice/bias among customers y Time and cost constraints

Chapter scheme: Declaration

Certificates Acknowledgments List of tables, graphs, charts, and diagram Contents: Executive summary Chapter 1: Introduction Chapter 2: Literature survey leading to research gaps Chapter 3: Problem statement Chapter 4: Research objectives Chapter 5: Hypotheses Chapter 6: Research methodology/setting including research limitations Chapter 7: Data analysis and inference Chapter 8: Key research findings Enclosure:  Select bibliography including websites used  Questionnaire  Annexure  Directions (green pastures) for further research

Name: Guruprasad Patel Reg No: 10XQCMA034

Prof.Hemanth Kumar (Student Guide)