M-Commerce : Standard Bank's cellphone banking adoption by customers.

Abstract

Mobile commerce is a product of the convergence of the two fastest growing

technologies of the modern era: cellular phones and the Internet (Attwood and

Duncan, 2000). It delivers electronic commerce capabilities into a consumer's

hand via wireless technology, that is an ability to perform a transaction using a

mobile device (cell phone, laptop, PDA), such as the cellphone banking

service. The cellphone banking service allows banking customers to perform

banking transactions directly on their cellphone, using either WAP or WIG

technology. Four big banks in South Africa provide the cell phone banking

offering to customers. Nedcor first launch the cell phone banking service and

other banks followed. Standard Bank launched the service in 2001 and thus

far only 28 000 customers have registered for the cell phone banking service.

The level of service adoption is very low, considering that there are 15million

cellphone subscribers in South Africa. Banks projected that the take-up would

be much higher than it currently is. For the purpose of this research study, the

Standard Bank's cell phone banking offering will be evaluated. The problem

area is that while Standard Bank launched the cellphone banking service in

2001, the consumer take up has been far lower than expected. Thus far, only

28 000 customers have registered for the service. No analysis has been

conducted at Standard Bank to understand the reasons behind the slow rate

of adoption by customers.

The objectives of the study are to:

o identify the factors that contribute to the non-adoption of the cell phone

banking service by customers

o identify factors that can increase the rate of service adoption and

therefore assist the banks in promoting the service to critical mass

o Establish the future of m-commerce in the banking industry.

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A literature review has been conducted, where studies conducted

internationally in mobile banking space have been discussed. These are

studies conducted in Europe and the United States. The cell phone banking

adoption framework model has also been derived. In terms of the research

methodology, qualitative and quantitative research methods were both

employed to gather the required data. For the qualitative methodology,

interviews were conducted with the Standard Bank management team and a

questionnaire was administered. For the quantitative methodology a

questionnaire was designed and was used to gather the information from

Standard Bank customers.

The research results reveal that cellphone banking has not been widely

adopted, despite the rapid diffusion of cell phones in South Africa and the

popularity of cell phone functionality such as SMS. Factors likely to influence

adoption include trialability, relative advantage, and the customer need for

banking services from a cellphone and lower perceptions of technology risk.