Adoption of Electronic Payment Systems in an Emerging Urban Economy: A Technology Acceptance Model Perspective

The current study investigates the factors which determine the usage of e-payments in Gangtok district, Sikkim, which is an emerging urban economy in India. By incorporating the concept of trust into TAM (Technology Acceptance Model), this research aims to find out whether perceived usability, perceived utility and trust can affect users' behavioural intentions to utilize e-payment services. Data were gathered through a survey questionnaire distributed among 384 participants selected randomly through stratification in order to represent different demographics and occupations. To examine the relationships proposed in the hypotheses, structural equation modelling (SEM) was used. All five hypotheses (H1-H5) have been found to be statistically significant. Therefore, these results confirm that trust will positively affect the perceptions of usability and utility; and therefore, is a very important precursor in the process of adopting digital payments. Perceived usability has a positive and significant impact on perceptions of usability and on behavioural intent. Additionally, there is a strong positive correlation between perceptions of utility and users' intentions to adopt e-payment services, while also being a partial mediator between perceptions of usability and users' intentions to adopt e-payment services. The research highlights that in semi-urban and emerging urban environments, usability, perceived benefits, and trust, are major determinants of the utilization of electronic payment services. In terms of policy recommendations, this study suggests that governments should provide support for the development of digital infrastructure, increase financial education, encourage public awareness about how to protect against security threats and fraud prevention, as well as create user friendly interfaces for digital payment services to enhance the rate of adoption.