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Essay: Understanding Consumer Behavior on E-wallet Usage: A Systematic Literature Review

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Understanding Consumer Behavior on E-wallet Usage:
A Systematic Literature Review
Rio Fernando Alexander
Faculty of Computer Science
University of Indonesia
Depok, Indonesia

Abstract — The increasing growth of online transactions has led to various new technologies in the financial sector: the e-wallet. A digital wallet (or e-wallet) is a software-based system that securely stores users’ payment information and passwords for numerous payment methods and websites. By using a digital wallet, users can complete purchases efficiently and quickly with near-field communications technology. Especially in this pandemic, the frequency of e-wallet usage increases because people are afraid of contacting one another. This writing aims to discuss the various usage of successful e-wallet businesses and provide a holistic view of the mobile payment ecosystem with empirical evidence, whether during a pandemic or before the pandemic.
The Covid-19 pandemic has resulted in internet users snowballing from day to day around the world. Consumer needs in terms of making payments have changed drastically. Paying cash is an option that has passed, but digital payments are considered one of the best options from society (Subaramaniam et al., 2020). One of the ways to prevent Covid-19 is to limit activities outside the home, including switching options for digital payment through digital wallets or an e-wallet (Aulia, 2020). This facility benefits the community so that it supports the physical distancing policy. The choice of the e-wallet payment method if the providers of goods and services use it, unlike traditional markets. In other words, there are business units or companies that provide economic goods and services to fulfill the community’s needs, which is known as electronic commerce or e-commerce (Jayani, 2021).
Specifically, in Indonesia, fintech already has its position, which has now become a trend. Until August 5, 2020, based on data uploaded by the Financial Services Authority (OJK), there are 158 registered and licensed fintech companies in Indonesia, which in the future, this number could still increase (OJK, 2020). The presence of fintech certainly has many positive impacts on the economic sector of society. According to the Central Bank of the Republic of Indonesia, fintech can replace the function of formal financial institutions such as banks regarding payment systems by offering various benefits of convenience in financial services, namely lending, capital raising, and deposit; market provisioning; investment and risk management; as well as payment, clearing, and settlement. From the various functions of fintech, the fintech that is the prima donna during pandemic like now is a payment instrument in the form of a digital wallet (BI, 2018).
Definition of Mobile Payment
According to Mallat (2007), mobile payment is ‘the use of a mobile device to conduct a payment transaction in which money or funds are transferred from payer to receiver via an intermediary or without an intermediary.’. Moreover, Pousttchi (2008) adds the details of a transaction process by including initiation, authorization, or completion of payment. A recent report written by the Federal Reserve Board’s Division of Consumer and Community Affairs presents that the means of making payments can be achieved by sending a text message (e.g., SMS) or using a downloadable app on a mobile device (Burge, 2016).
Dewan and Chen (2005) summarize several drivers in migrating from traditional payment to mobile payment, including the penetration of cellular phones, powerful mobile applications enabled by increased bandwidth of mobile networks, fast market introduction, and technological innovations in cellular phones. Given the ubiquity of mobile phones in the last decades together with the storage and transmission capabilities (Slade, Williams, & Dwivedi, 2013), mobile payment presents significant advantages for merchants, such as extending brands, increasing revenues (Dewan & Chen, 2005), faster transactions, greater convenience, time-saving, and lower costs (Li´ebana-Cabanillas, Sanchez-Fern´andez, & Munoz-Leiva, 2014). Furthermore, following the appearance and diffusion of smartphones, users can have safe interactions and reduce wait times thanks to safer encryption of transmitting data and advanced technology infrastructures (Li´ebana-Cabanillas et al., 2014).
COVID-19 Impact on Business and Consumer Behavior: Global Perspectives plus Malaysia and Indonesia View
SARS-Cov2 has a deadly effect not only on humans but also on business (Turner and Akinremi, 2020; Ivanov, 2020), economics, and finance (Goodell, 2020) activities within primary, secondary and tertiary sectors (Nicola, Alsafi, Sohrabi, et al., 2020). The world is anticipating a significant global loss due to epidemic and pandemic situations (Fan, Jamison, and Summers, 2018). The novel coronavirus also changes consumer behavior in Asia, including Indonesian and Malaysian consumers (Nielsen, 2020). In Malaysia, it was reported that some delivery companies had recorded more than a 30 percent increase in orders since a Movement Control Order (MCO) was enacted on March 18 (The ASEAN Post, 2020). Many retailers, transportation providers, and food merchants encourage consumers to pay by using digital wallets or e-wallets. The central bank called for more digital payment transactions (Bank Indonesia, 2020; IDN Financials, 2020). Many people started to build a perceived risk that might be faced when using cash. We also have seen in newspapers and television that consumers all over the globe committed panic buying activities. Some of them take advantage of the situation to hoard the supply, and the other consumers purchase all the supplies just because they do not want hoarders to take advantage. It is connected with Global Web Index&s (2020) finding that there is a dramatic increase in consumer spending in many parts of the world. Based on that finding, 80% of consumers in the US and the UK have consumed more content at home since the outbreak.
Information needed is collected by combining and reviewing the literature. A review is conducted from seven literatures (article, proceeding, books, etc) (APPENDIX A). Literature is chosen based on its topics, publication year, and journal publications. Literature must be related to the topic of e-wallet usage during the pandemic. Beside the main idea of e-wallet usage from different perspectives during the COVID-19, the idea of other e-wallet purposes, motivations, predictions, and methods are needed to be discussed as a recommendation. The publication year of the literature must be no older than 2018. Publication journals must be indexed in Scimago Journal (www.scimagojr.com). The literature will be summarized and combined to see all possibilities of the implementation. The literature list is collected from Sage Publication, ScienceDirect, JSTOR, and Scopus, which can be accessed through remote-lib.ui.ac.id.
This literature review aims to evaluate and discuss the literature related to the use of e-wallet within different backgrounds and purposes. The objectives for this review are listed below:
To summarize the current research on using e-wallet from different users during the COVID-19 pandemic or even after the pandemic.
To discuss the strengths, weaknesses, and issues in the previous research.
The Study of e-Wallet Usage
The study of e-wallet usage has been conducted for different purposes. Some of them access the e-wallet usage for overall e-wallet, while some only access the top of the most famous e-wallet. There are also different layers of parameters on the e-wallet usage; e-wallet have been analyzed based on the geographic condition, work or economic condition, gender, etc.
All the studies aim to analyze different purposes in e-wallet usage. While most of the literature shows the factors within e-wallet usage, a study still has proven to predict and affect the future condition of an e-wallet (Bennion, 2017). (APPENDIX B)
Research Design Characteristics
Since e-wallet can be used by users from different backgrounds, the researchers are more diverse, depending on the subjects or the respondents. The aims of these researches are to analyze the factors in e-wallet usage with different methods of sampling and different size in sampling. Most of the research is conducted over a long period of time and gradually follow-up the results to the subjects. (APPENDIX D)
Based on the research, we can conclude that Indonesia and Malaysia have similar conditions in terms of consumer usage of e-wallet. Specifically, in Surabaya (part of Indonesia), the results show that perceived usefulness and ease of use have positive and significant impacts on behavioral intention to use, and behavioral intention to use has a positive and significant impact on actual use. In the scope of college students, four main factors drive them in using an e-wallet, with security as the most important factor in using the e-wallet. In Indonesia, Go-Pay has the largest e-wallet usage, but OVO has the most loyal users from all e-wallet existing.
Some research may still be in the form of a conclusion of the data, which can’t be implemented in technology or recommendation. It is recommended to do more creative work to analyze the research so the result of the e-wallet can be more beneficial for different stakeholders, whether it is a company, government, organization, students, etc. It is also suggested for everyone who is willing to contribute to the research of e-wallet usage to explore more about financial technology or economics aspects to get a more reliable and meaningful solution.

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