Electronic payment system use: a mediator and a predictor of financial satisfaction
-
DOIhttp://dx.doi.org/10.21511/imfi.17(3).2020.19
-
Article InfoVolume 17 2020, Issue #3, pp. 246-262
- Cited by
- 1854 Views
-
518 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This study investigates the direct and indirect effects of financial capability, financial advice, financial anxiety, and the use of an electronic payment system (EPS) on financial satisfaction. In the current era of digitalization and financial innovations, it seems quite unlikely that an individual remains unaffected by its use. The research was conducted in northern India on individual level using a partial least square structural equation modeling statistical technique to analyze responses collected from a close-ended questionnaire using a 5-point Likert scale. The results show that financial capability, financial advice, financial anxiety, and EPS usage have a direct positive effect on an individual’s financial satisfaction. EPS usage plays a significant mediating role, as all the financial constructs depict a positive effect on financial satisfaction via EPS use. These findings contribute to the literature by offering an understanding of the determinants of financial satisfaction in the context of a low-income developing country, as well as the vital role of using EPS in an individual’s financial satisfaction in today’s digitally driven era. The results of this study could be a useful factor for policymakers and digital service providers for implementation and control.
Acknowledgement
“This paper was supported by Internal Grant Agency of FaME TBU No. IGA/FaME/2019/002”
- Keywords
-
JEL Classification (Paper profile tab)D53, E42, G21
-
References75
-
Tables8
-
Figures2
-
- Figure 1. Proposed framework
- Figure 2. SEM analysis
-
- Table 1. Sample profile
- Table 2. Measurement model
- Table 3. Construct reliability and validity
- Table 4. Discriminant analysis with the Heterotrait-Monotrait (HTMT) ratio and correlation matrices
- Table 5. Path coefficient
- Table 6. Variations of the dependent variable explained by independent variables
- Table A1. Sample questionnaire
- Table A2. Questions
-
- Archuleta, K. L., Dale, A., & Spann, S. M. (2013). College students and financial distress: exploring debt, financial satisfaction, and financial anxiety. Journal of Financial Counseling and Planning, 24(2), 50-62.
- Atkinson, A., McKay, S., Collard, S., & Kempson, E. (2007). Levels of financial capability in the UK. Public Money and Management, 27(1), 29-36.
- Bagozzi, R. P., & Yi, Y. (2012). Specification, evaluation, and interpretation of structural equation models. Journal of the Academy of Marketing Science, 40(1), 8-34.
- Bayar, Y., Sezgin, H. F., Öztürk, Ö. F., & Şaşmaz, M. Ü. (2020). Financial Literacy and Financial Risk Tolerance of Individual Investors: Multinomial Logistic Regression Approach. SAGE Open, 10(3).
- Braunstein, S., & Welch, C. (2002). Financial literacy: An overview of practice, research, and policy. Federal Reserve Bulletin, 88(11), 445-457.
- Calcagno, R., & Monticone, C. (2015). Financial literacy and the demand for financial advice. Journal of Banking and Finance, 50, 363-380.
- Çera, G., Khan, K. A., Belas, J., & Ribeiro, H. N. R. (2020). The role of financial capability and culture in financial satisfaction. Economic Papers, in press.
- Çera, G., Phan, Q. P. T., Androniceanu, A., & Çera, E. (2020). Financial Capability and Technology Implications for Online Shopping. E&M Economics and Management, 23(2), 156-172.
- Chuan, C. S., Kai, S. B., Kok, N. K., Seong, L. C., & Chen, O. B. (2012). Financial Satisfaction and Intergenerational Resource Transfers among Urban Older Malaysians. American Journal of Scientific Research, 43(43), 32-45.
- Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). United States of America: L. Erlbaum Associates.
- Cotteleer, M., Cotteleer, C., & Prochnow, A. (2007). Cutting checks: challenges and choices in B2B E-PAYMENTS. Communications of the ACM, 50(6), 56-61.
- Cwynar, A., Cwynar, W., Kowerski, M., Filipek, K., & Szuba, P. (2020). Debt literacy and debt advice-seeking behaviour among Facebook users: the role of social networks. Baltic Journal of Economics, 20(1), 1-33.
- Davis, K., & Runyan, R. C. (2016). Personality traits and financial satisfaction: Investigation of a hierarchical approach. Journal of Financial Counseling and Planning, 27(1), 47-60.
- Ferrer-i-Carbonell, A., & Gërxhani, K. (2011). Financial Satisfaction and (in)formal Sector in a Transition Country. Social Indicators Research, 102(2), 315-331.
- Foscht, T., Maloles, C., Swoboda, B., & Chia, S. L. (2010). Debit and credit card usage and satisfaction: Who uses which and why – evidence from Austria. International Journal of Bank Marketing, 28(2), 150-165.
- Friedline, T., & West, S. (2016). Financial Education is not Enough: Millennials May Need Financial Capability to Demonstrate Healthier Financial Behaviors. Journal of Family and Economic Issues, 37(4), 649-671.
- Ghani, M. A., Rahi, S., Yasin, N. M., &Alnaser, F. (2017). Adoption of Internet Banking: Extending the Role of Technology Acceptance Model (TAM) with E-Customer Service and Customer Satisfaction. World Applied Sciences Journal, 35(9), 1918-1929.
- Grable, J. E., Cupples, S., Fernatt, F., & Anderson, N. R. (2013). Evaluating the Link Between Perceived Income Adequacy and Financial Satisfaction: A Resource Deficit Hypothesis Approach. Social Indicators Research, 114(3), 1109-1124.
- Hair, J. F, Sarstedt, M., Hopkins, L., & G. Kuppelwieser, V. (2014). Partial least squares structural equation modeling (PLS-SEM). European Business Review, 26(2), 106-121.
- Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2014). A Primer on Partial Least Squares Structural Equation Modeling. Sage (First).
- Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (2nd ed.). Los Angelos: Sage.
- Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139-152.
- Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2-24.
- Hansen, T., Slagsvold, B., & Moum, T. (2008). Financial satisfaction in old age: A satisfaction paradox or a result of accumulated wealth? Social Indicators Research, 89(2), 323-347.
- Hayhoe, C. R., Cho, S. H., Devaney, S. A., Worthy, S. L., Kim, J., & Gorham, E. (2012). How do distrust and anxiety affect saving behavior? Family and Consumer Sciences Research Journal, 41(1), 69-85.
- Henseler, J., Ringle, C. M., & Sarstedt, M. (2014). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43, 115-135.
- Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in international marketing. Advances in International Marketing, 20, 277-319.
- Hira, T. K., & Mugenda, O. M. (1998). Predictors of financial satisfaction: Differences between retirees and non-retirees. Journal of Financial Counseling and Planning, 9(2), 75-84.
- Hossain, M. A. (2019). Security perception in the adoption of mobile payment and the moderating effect of gender. PSU Research Review, 3(3), 179-190.
- Hossain, S. F. A., Xi, Z., Nurunnabi, M., & Hussain, K. (2020). Ubiquitous Role of Social Networking in Driving M-Commerce: Evaluating the Use of Mobile Phones for Online Shopping and Payment in the Context of Trust. SAGE Open, (66833), 10(3).
- Hsieh, C. M. (2004). Income and financial satisfaction among older adults in the United States. Social Indicators Research, 66(3), 249-266.
- Johnson, E., & Sherraden, M. S. (2007). From Financial Literacy to Financial Capability Among Youth. The Journal of Sociology & Social Welfare, 34(3), 119-147.
- Joo, S.-H., Durband, D. B., & Grable, J. (2008). The academic impact of financial stress on college students. Journal of College Student Retention: Research, Theory and Practice, 10(3), 287-305.
- Joo, S-H., & Grable, J. (2004). An Exploratory Framework of the Determinants of Financial Satisfaction. Journal of Family and Economic Issues, 25(1), 25-50.
- Kageyama, J., & Matsuura, T. (2018). The Financial Burden of Having Children and Fertility Differentials Across Development and Life Stages: Evidence from Satisfaction Data. Journal of Happiness Studies, 19(1), 26.
- Khan, K. A., Akhtar, M. A., Dey, S. K., & Ibrahim, R. (2020). Financial Anxiety, Financial advice, and E-payment use: Relationship and perceived differences between males & females of Generation Z. Journal of Critical Reviews, 7(18), 1812-1820.
- Kim, C., Tao, W., Shin, N., & Kim, K.-S. (2010). An empirical study of customers’ perceptions of security and trust in e-payment systems. Electronic Commerce Research and Applications, 9(1), 84-95.
- Königsheim, C., Lukas, M., & Nöth, M. (2017). Financial Knowledge, Risk Preferences, and the Demand for Digital Financial Services. Schmalenbach Business Review, 18, 343-375.
- Kousaridas, A., Parissis, G., & Apostolopoulos, T. (2008). An open financial services architecture based on the use of intelligent mobile devices. Electronic Commerce Research and Applications, 7(2), 232-246.
- Lin, J., Bumcrot, C., Ulicny, T., Lusardi, A., Mottola, G., Kieffer, C., & Walsh, G. (2016). Financial Capability in the United States 2016. FINRA Investor Education Foundation.
- Loewe, N., Bagherzadeh, M., Araya-Castillo, L., Thieme, C., & Batista-Foguet, J. M. (2014). Life domain satisfactions as predictors of overall life satisfaction among workers: Evidence from Chile. Social Indicators Research, 118(1), 71-86.
- Lusardi, A., & Mitchell, O. S. (2014). The Economic Importance of Financial Literacy: Theory and Evidence. Journal of Economic Literature, 52(1), 5-44.
- Lusardi, A., & Tufano, P. (2015). Debt literacy, financial experiences, and overindebtedness. Journal of Pension Economics and Finance, 14(4), 332-368.
- Mazambani, L., Rushwaya, T. J., & Mutambara, E. (2018). Financial inclusion: Disrupted liquidity and redundancy of mobile money agents in Zimbabwe. Investment Management and Financial Innovations, 15(3), 131-142.
- Michalos, A. C., & Orlando, J. A. (2017). A note on student quality of life. In Connecting the Quality of Life Theory to Health, Well-Being and Education (pp. 247-254). Springer, Cham.
- Moreland, K. A. (2018). Seeking Financial Advice and Other Desirable Financial Behaviors. Journal of Financial Counseling and Planning, 29(2), 198-206.
- Mushkudiani, N. (2019). Development of Electronic Payments in Georgia. Economics and Culture, 15(2), 64-74.
- Mustapha, S. A. (2018). E-Payment technology effect on bank performance in emerging economies-evidence from Nigeria. Journal of Open Innovation: Technology, Market, and Complexity, 4(4), 1-14.
- NFCS. (2012). 2012 National Financial Capability Study State-by-State Survey Instrument. FINRA Investor Education Foundation.
- OECD. (2018). Financial Markets, Insurance and Private Pensions: Digitalization and Finance.
- Osakwe, C. N., Boateng, H., Popa, S., Chovancová, M., & Soto-Acosta, P. (2016). Understanding cosmopolitan consumers’ repeat purchasing in the emarketplace: contribution from a brand orientation theoretical perspective. E+M Ekonomie a Management, 19(4), 149-166.
- Oyelami, L. O., Adebiyi, S. O., & Adekunle, B. S. (2020). Electronic payment adoption and consumers’ spending growth: empirical evidence from Nigeria. Future Business Journal, 6(1).
- Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879-903.
- Ringle, C. M., Wende, S., & Becker, J.-M. (2015). SmartPLS. Boenningstedt: SmartPLS GmbH.
- Rita, P., Oliveira, T., & Farisa, A. (2019). The impact of e-service quality and customer satisfaction on customer behavior in online shopping. Heliyon, 5(10), e02690.
- Roberts, R., Golding, J., Towell, T., & Weinreb, I. (1999). The effects of economic circumstances on british students’ mental and physical health. Journal of the American College Health Association, 48(3), 103-109.
- Rothwell, D. W., Khan, M. N., & Cherney, K. (2016). Building Financial Knowledge Is Not Enough: Financial Self-Efficacy as a Mediator in the Financial Capability of Low-Income Families. Journal of Community Practice, 24(4), 368-388.
- Sen, A. (1993). Capability and Well-Being. In M. Nussbaum and A. Sen (Eds.), The Quality of Life (pp. 30-53). USA: Oxford University Press.
- Sherraden, M. S. (2013). Building blocks of financial capability. In J. Birkenmaier, M. Sherraden, & J. Curley (Eds.), Financial Capability and Asset Building: Research, Education, Policy, and Practice (pp. 3-43). New York: Oxford University Press.
- Stolper, O., & Walter, A. (2017). Financial literacy, financial advice, and financial behavior. Journal of Business Economics, 87(5), 581-643.
- Taylor, M. (2011). Measuring Financial Capability and its Determinants Using Survey Data. Social Indicators Research, 102(2), 297-314.
- van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449-472.
- Vasic, N., Kilibarda, M., & Kaurin, T. (2019). The Influence of Online Shopping Determinants on Customer Satisfaction in the Serbian Market. Journal of Theoretical and Applied Electronic Commerce Research, 14(2), 70-89.
- Wang, & He, G. (2020). Digital Financial Inclusion and Farmers’ Vulnerability to Poverty: Evidence from Rural China. Sustainability, 12(4), 1668.
- Wang, D., Zha, Y., Bi, G., & Chen, Y. (2018). A Meta-analysis of Satisfaction-Loyalty Relationship in E-Commerce: Sample and Measurement Characteristics as Moderators. Wireless Personal Communications, 103(1), 941-962.
- Woodyard, A. S., & Robb, C. A. (2016). Consideration of Financial Satisfaction: What Consumers Know, Feel and Do from a Financial Perspective. Journal of Financial Therapy, 7(2).
- World Economic Forum. (2019). Global Gender Gap Report 2020: Insight Report.
- Xiao, J. J., & O’Neill, B. (2018). Propensity to plan, financial capability, and financial satisfaction. International Journal of Consumer Studies, 42(5), 501-512.
- Xiao, J. J., & Porto, N. (2016). Which Financial Advice Topics Are Positively Associated with Financial Satisfaction? Journal of Financial Planning, (July), 52-60.
- Xiao, J. J., & Porto, N. (2017). Financial education and financial satisfaction: Financial literacy, behavior, and capability as mediators. International Journal of Bank Marketing, 35(5), 805-817.
- Xiao, J. J., Chen, C., & Chen, F. (2014). Consumer Financial Capability and Financial Satisfaction. Social Indicators Research, 118(1), 415-432.
- Xiao, J. J., Tang, C., & Shim, S. (2009). Acting for happiness: Financial behavior and life satisfaction of college students. Social Indicators Research, 92(1), 53-68.
- Yen, J.-Y., Yen, C.-F., Chen, C.-S., Wang, P.-W., Chang, Y.-H., & Ko, C.-H. (2012). Social anxiety in online and real-life interaction and their associated factors. Cyberpsychology, Behavior, and Social Networking, 15(1), 7-12.
- Zainul, A. A. (2018). Influence of financial attitude, financial behavior, financial capability on financial satisfaction. Proceedings 15th International Symposium on Management (INSYMA 2018) (pp. 100-103).
- Zhao, X., Lynch, J. G., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis. Journal of Consumer Research, 37(2), 197-206.