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Examining the Relationship of Payment System Characteristics and

Behavioral Intention in E-Payment Adoption: A Case of Indonesia
Article in International Journal of Business Information Systems · May 2015

DOI: 10.1504/IJBIS.2015.069065
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58 Int. J. Business Information Systems, Vol. 19, No. 1, 2015
Examining the relationship of payment system

characteristics and behavioural intention in
e-payment adoption: a case of Indonesia
Achmad Nizar Hidayanto*,

Luqman Syauqi Hidayat,
Puspa Indahati Sandhyaduhita and
Putu Wuri Handayani
Faculty of Computer Science,
Universitas Indonesia,
Kampus UI Depok, 16424, Indonesia
Email: nizar@cs.ui.ac.id
Email: luqman.syauqi@ui.ac.id
Email: p.indahati@cs.ui.ac.id
Email: putu.wuri@cs.ui.ac.id
*Corresponding author
Abstract: This study is conducted to analyse factors that influence the

behavioural intention to use e-payment system on e-commerce in Indonesia.
The proposed model in this research combines behavioural theory of
technology acceptance in terms of behavioural beliefs, social influences, and
personal innovativeness with the characteristics of an ideal payment system.
The model was tested by the structural equation modelling (SEM) using
LISREL 8.8 software. The analysis result of 203 respondents showed that
Indonesian customers tend to only consider the advantages they gain when
adopting e-payment and ignore the risks associated with the technology.
Concerning e-payment system characteristics, it was also proven that ease of
use, privacy, trust, security, and convertibility influence directly and indirectly
the intention to adopt e-payment.
Keywords: e-payment; e-commerce; behavioural beliefs; social influences;

personal innovativeness; trust; security; privacy; ease of use; convertibility;
risk; relative advantages; payment system characteristics; adoption; Indonesia.
Reference to this paper should be made as follows: Hidayanto, A.N.,

Hidayat, L.S., Sandhyaduhita, P.I. and Handayani. P.W. (2015) ‘Examining the
relationship of payment system characteristics and behavioural intention in
e-payment adoption: a case of Indonesia’, Int. J. Business Information Systems,
Vol. 19, No. 1, pp.58–86.
Biographical notes: Achmad Nizar Hidayanto is the Head of Information

Systems/Information Technology Stream, the Faculty of Computer Science,
Universitas Indonesia. He received his PhD in Computer Science
from Universitas Indonesia. His research interests are information
systems/information technology, e-learning, information systems security,
change management, distributed systems and information retrieval.
Copyright © 2015 Inderscience Enterprises Ltd.

Examining the relationship of payment system characteristics 59
Luqman Syauqi Hidayat obtained his Bachelor in Information Systems from

the Faculty of Computer Science, Universitas Indonesia. Currently, he is
working in the largest telecommunication company in Indonesia.
Puspa Indahati Sandhyaduhita is a Lecturer at the Faculty of Computer Science,

Universitas Indonesia. She received her Masters degree from TU Delft, the
Netherlands. Her research interests include information systems, requirements
engineering, business process modelling, enterprise architecture, enterprise
resource planning, and supply chain management.
Putu Wuri Handayani is a Lecturer at the Faculty of Computer Science,

Universitas Indonesia. She obtained her Masters degree from Fulda University
of Applied Sciences, Germany. Her interests include enterprise resource
planning, customer relationship management, supply chain management and
e-commerce. Currently, she is pursuing her PhD in the Faculty of Computer
Science, Universitas Indonesia.
1 Introduction
In the era of information and communication technology development nowadays, the use
of the internet in many countries continues to rise. In Indonesia, internet users had
increased from 20 million in 2007 to 55 million in 2011 or 22.4% of the total population
in Indonesia and the number is still expected to grow as the average growth of the
internet users during the last five years had reached 5.7 million users per year
(InternetWorldStats.com, 2010a). Thus, it made Indonesia one of the countries with most
internet users in the world (8th rank) and 4th highest in Asia after China, India and Japan
(InternetWorldStats.com, 2010b).
E-commerce is usually associated with buying and selling over the internet, or
conducting any transaction involving the transfer of ownership or rights to use goods or
services through a computer-mediated network (Khurana et al., 2011). The presence of a
number of e-commerce sites in Indonesia such as Kaskus, the most visited e-commerce
site in Indonesia (Mamuaya, 2012), Disdus, Tokobagus, DealKeren, Blibli.com,
Bhinneka.com and Tokopedia indicates frequent e-commerce activities in Indonesia. In
2012, there were approximately 38 million customers performing buying or selling
transactions per month; this number is a 100% increase from the previous year which had
only 19 million customers doing transactions per month (Wicaksono, 2012).
Despite a relatively high increase of transactions volume, public interest in Indonesia
in conducting online transactions is still low. According to Miftachul (2012), online
shopping transactions in Indonesia were performed by around 6% only of the total
50 million internet users in Indonesia. Most customers in Indonesia visit online shopping
sites for product-browsing and/or price comparison only as revealed by a survey
conducted by the Daily Social that showed in 2011, 26% of the respondents visited
websites to browse products only while 25% of the respondents used e-commerce to
compare prices before buying offline, and only 38% of the respondents compared prices
and eventually bought products online through e-commerce (Baskoro, 2011).
From prior research, there are many factors that influence customers in conducting
online shopping viz. security and privacy concern (Chen and Barnes, 2007; Choia and
Geistfeld, 2004; Sahney et al., 2013; Tsiakis and Sthephanides, 2005), vendor image
60 A.N. Hidayanto et al.
(Chen and Barnes, 2007; Sahney et al., 2013), costs (Kim and Kim, 2004), incentive
programme (Kim and Kim, 2004), site quality (Baia et al., 2008; Kim and Kim, 2004),
experience (Chen and Barnes, 2007), perceived usefulness (Chen and Barnes, 2007), etc.
It was also found that the most dominant factors are those especially related to security
and privacy concern.
Not all customers who shop online in Indonesia make online payments. The results of
the Indotelko survey (2012) found that of the entire online transactions, most of the
payments (around 70%) are made by bank transfer to an account, and the rest (around
30%) is accomplished using credit cards. These results correspond with the results of the
survey conducted by Baskoro (2011) in which of the 224 respondents of the e-commerce
users, 178 respondents make payments through bank transfer, 36 respondents choose to
pay in cash, eight respondents use credit cards, and only two respondents pay using
PayPal. This suggests that online-payment is still not quite popular in Indonesia.
The low number of online payments in Indonesia possibly correlates with the low
number of credit card users in Indonesia as reported by TabloidPasar.com (2012) in
which there are only about 7.5–8 million credit card users in Indonesia in 2012. In the
USA, where the number of credit card users is considerably high, i.e., around 181 million
in 2011 (Barrington, 2011), credit card has been a popular payment instrument in online
transactions on e-commerce (Jip de Lange and Screpnic, 2012). In addition, there are also
other factors that may influence the low adoption of e-payment, particularly those related
to the type of (e-)payment provided (Meskaran et al., 2010).
Most likely, the selection of e-payment types in e-commerce services is closely
related to the design characteristics of the e-payment system. For an online e-payment to
be successful, its design should meet the users’ need (Sahut, 2008). It can be argued that
customers would expect an ideal e-payment system which is easier for them to use so that
eventually they are willing to adopt the payment system. Some prior research on e-
payment models focused mostly on behavioural theories of technology adoption in
general or by considering individual and social factors. Therefore, we are interested to
conduct a study especially to analyse e-payment system characteristics and the
correlation with technology adoption behaviour.
2 Payment systems in e-commerce and its characteristics
2.1 Payment methods in e-commerce

According to Rahardjo (1999), e-payment can be simply understood as a payment
mechanism using an electronic medium that does not involve money in cash. Over time,
the definition does not change much as shown by Hanzaee and Alinejad (2012), who
stated that e-payment is a financial exchange between two parties, buyer and seller,
facilitated by an electronic payment mechanism. E-payment method allows customers to
transfer fund from one person or a group of persons to one person or a group of persons
through an electronic network without direct face-to-face interaction (Turban and
King, 2002).
Forms of e-payment have been circulating in various types. In order to apprehend the
types of e-payment systems, Sahut (2008) tried to define typology for e-payment systems.
The study revealed that in 2001–2004, Abrazhevich, Kuttner and McAndrews, and
Stroborn and Alii (as cited in Sahut, 2008) concluded that e-payment systems by far
generally fall into either electronic money (e-money) based system in which parties
exchange electronic money that represent value just as banknote determine the value of
paper money or account-based system in which money is represented by numbers and
that these numbers are transferred between parties (Abrazhevich, 2001). As indicated by
its name, an account-based system is normally associated with a bank account whereas its
counterpart is not.
Further detailing (second level) of those two categories might vary, e.g., Abrazhevich
(2001) divided e-money-based system into those that use cards to store token and those
where token resides on users’ account and computer network, then divided account-based
system into debit and credit approach, Kim et al. (2010a) focused on e-cash and pre-paid
card for e-money-based system and credit card, debit card and e-check for account-based
system while Sahut (2008) detailed e-money-based system into three categories: e-wallet,
virtual wallet and virtual money; and the second one into five categories: smart card
based system, e-check, bank transfer, account-based micropayment and mobile payment.
A brief description of those sub categories by Sahut (2008) is given as follows:
• E-wallet: use smart card technology to store customer’s fund data. Another popular
term that is widely used to refer to e-wallet is e-money whereas cyber cash is used to
refer to digital money utilised over the internet (Guttmann, 2003).
• Virtual wallet: customer’s fund data is stored in a software application.
• Virtual money: pure electronic currencies; customer can buy this electronic coins
from the provider and can store the coins in his hard drive.
• Smart card-based system: the use of credit or debit card to pay for services or goods.
• E-check: the digital version of traditional paper check.
• Bank transfer: originally, Sahut (2008) denoted bank transfer as e-mail payment in
which e-mails are used for notification of an interbank transaction for both the payer
and the payee.
• Account-based micropayments: aside from using e-money-based system to make

micro/small payments for the services/goods, micropayments can be handled by
incorporating the tab into other post-paid billing system despite a higher incurred
cost.
• Mobile payment: use smart phone or other emerging devices to pay.
A sub-type of e-payment system namely internet-based payment system can be defined as

“any prevailing or new payment system that enables financial transactions to be
conducted safely from one organization or individual to another via the internet” (Harris
et al., 2011). Subsequently, various types of the above payment systems can also be
further categorised into internet-based payment system and non-internet-based payment
system. Thus, as nowadays almost all e-commerce activities are conducted over the
internet, e-commerce business transactions ideally end with internet-based payment
activities as well.
2.2 E-commerce payment systems in Indonesia

E-commerce payment systems in Indonesia vary widely, from a traditional system using
cash, to an advanced one using e-payment systems. Based on the Daily Social research in
2011 and 2012 in collaboration with Veritrans (Baskoro, 2011; Mamuaya, 2012), there
were several payment systems most commonly used as part of completing the Indonesian
e-commerce transactions:
• Bank transfer: bank transfer is the most widely used method to conduct e-commerce
payments. It was found that approximately 70% of e-commerce users use bank
transfer to make payment.
• KlikBCA: the KlikBCA is an internet banking (IB) application, one of the e-payment
systems established by Bank Central Asia (BCA), one of the largest private banks in
Indonesia. Approximately, 41% of e-commerce users used the KlikBCA.
• Credit Card: credit card is placed in the third rank for e-commerce payment. About
30% of e-commerce users used credit cards for the payments.
• Cash-on-Delivery (CoD): Cash-on-Delivery or commonly known as CoD is a
common method used in many trading forums/media when the location of the seller
and the buyer is not far apart. Approximately 24% of e-commerce users used CoD
for their payment.
• Mandiri internet: Bank Mandiri, one of the state-owned banks in Indonesia, had an
IB system through their online networks. Its use represents about 15% of
e-commerce users in Indonesia.
• PayPal: PayPal was not listed in the top five e-commerce payment systems used in
Indonesia however in the previous year PayPal was used by about 0.89% of the
e-commerce users in Indonesia.
There are several ways in which bank transfer can be performed. First, a customer can do
it non-electronically by asking a bank teller to transfer the money. Second, bank transfer
can be performed via automated teller machine (ATM). Third, it can be done via mobile
banking (MB) application and fourth, via IB application. The second, third and fourth
belong to e-payment systems. When e-commerce buyers use bank transfer as their
payment method, most likely they must additionally notify the sellers that the transfer has
been made.
When using IB application to complete payments, e.g., KlikBCA or Mandiri internet,
customers can either transfer money to the seller’s account just like regular transfer or
pay for the e-commerce payment menu provided by the IB application if the seller’s
system is online and connected to the IB application (Bca.co.id, 2013). Customers who
use PayPal can immediately complete the payment via the internet. Unlike the regular
transfer, the e-commerce payment via IB application and PayPal does not need additional
step from the buyer to notify the seller.
In the case of credit card, e-commerce payment can be completed either online when
customer enter credit card information directly on the internet (internet-based payment
system) or offline (non-internet-based payment system) when customer comes to the
store outlet to swipe the card. Payment offline using credit card can be combined with the
CoD payment such that customer use his credit card to be swiped by the seller instead of
paying in cash. In the case of the CoD, e-commerce website is usually used as a means
for ordering or bargaining, and then the buyer and the seller meet at a specific location to
complete the transaction (Bhinneka, 2013).
There are now at least seven e-money products (cards) namely BNI Prepaid Card,
Flazz BCA, E-Toll Card, BRIZZI, JakCard, Indomaret Card and Megacash each of which
is issued by BNI, BCA, Mandiri Bank, BRI, DKI Bank, Mandiri Bank and Mega Bank
(Beritasatu.com, 2013; Sharingvision.com, 2013). Additionally, there are also other
e-money cards issued by non-bank institutions such as Tcash and Dompetku
(Sharingvision.com, 2013), each of which is issued by Telkomsel and Indosat (both are
telecommunication network and service provider company in Indonesia). Those cards are
mainly proposed for micropayments (Sharingvision.com, 2013). However, the usage
level of those cards is still low; therefore the Indonesian central bank (Bank of Indonesia)
has recently been campaigning for less cash society to reduce people dependency on cash
money (Beritasatu.com, 2013; Sharingvision.com, 2013).
2.3 Characteristics of payment systems

Some books had mentioned some requirements and characteristics of the payment
systems such as security, reliability, convertibility, efficiency, traceability, etc. (Langdon
et al., 2000; Lynch and Lundquist, 1996; Wayner, 1997). Furthermore, attempts to
classify and explain the requirements and characteristics of payment systems based on
various aspects can be found, among others, in the work of (Abrazhevich, 2001, 2004;
Neuman and Medvinsky, 1995; Sumanjeet, 2009). Taking into account user-related
aspect, political and technological factor, Abrazhevich (2004) identified applicability,
ease of use, security, reliability, trust, scalability, convertibility, multi-currency,
interoperability, efficiency, anonymity, traceability, and authorisation type as payment
systems characteristics.
• Anonymity, privacy
Anonymity reflects the desire of users to hide their personal identity such that the
buyer only knows pseudonym of the user while privacy reflects the desire of users to
protect their information from unauthorised parties (Tsiakis and Sthephanides, 2005).
Through these characteristics, confidential payment information including payer,
payee, account numbers, amounts, date, and time must not become known to any
party so that payer’s spending pattern cannot be extracted (Asokan et al., 1997;
Medvinsky and Neuman, 1993; Neuman and Medvinsky, 1995; Tsiakis and
Sthephanides, 2005). This means that the payment system cannot trace the payments
(Tsiakis and Sthephanides, 2005). Such system had been proposed by Low et al.
(1994) who suggested an anonymous credit card to handle scenarios in which the
involved parties collude to disclose users’ payment information. A protocol to
guarantee anonymity while maintaining complete security, has been proposed by
Wen (2010) and Wen et al. (2013).
As an illustration of anonymity: a customer pays with a debit card, the purchase is
registered to the vendor’s and bank’s database; this allows other people/parties to
figure out the amount he/she paid and what he/she actually bought. Therefore, debit
card payment is not considered anonymous. On the contrary, when a customer pays
in cash, e.g., in the physical market, data such cash payment cannot be tracked
because buyer information is not stored. Thus, cash payment is considered as

anonymous (Abrazhevich, 2001).
• Traceability
Traceability demonstrates the ease of tracking the flow of money, the sources or
recipient of the money or the link between the money spent and the customer
through payment activities (Abrazhevich, 2001, 2004; Harris et al., 2011). In
e-payment systems, money can be traced using records acquired during payment
activities. For example, information about credit card payment will be kept by bank,
thus making it possible to find out what the money was used, and where it came from
(Abrazhevich, 2004). Traceability is closely associated to the above-mentioned
anonymity, privacy of the payment system (Abrazhevich, 2004; Sahut, 2008) such
that they are inversely related. Just like traditional financial transactions, it can be
argued that traceability of e-payment systems should be maintained to a certain level
to prevent, detect and prosecute financial crime, e.g., money laundering, tax evasion,
etc.
• Security
One of the most important issues and commonly discussed in the research of
e-payment is security (Asokan et al., 1997; Brands, 1995; Chaum, 1992;
Dzemydiene et al., 2010; Hanzaee and Alinejad, 2012; Kim et al., 2010b; Neuman
and Medvinsky, 1995; Medvinsky and Neuman, 1993; Sahut, 2008; Sumanjeet,
2009; Tsiakis and Sthephanides, 2005). Internet is an open network with no
centralised control so that the infrastructure supporting e-commerce and payment
systems in particular should be resistant to attacks over the internet (Neuman and
Medvinsky, 1995). Kim et al. (2010b) followed by Hanzaee and Alinejad (2012)
hypothesised that technical protection, transaction procedure and security statement
are associated with perceived users security. Among others, some technical protocols
e.g., quantum-based protocol, quantum proxy blind signature, have been proposed to
provide unconditional security of e-payment systems while maintaining anonymity
(Wen, 2010; Wen et al., 2013). Other approach using mutual authentication
procedure between cardholder and merchant is proposed by Gupta and Johari (2011)
in the attempt to increase credit card security. As technology advances, further
mechanisms to provide e-payment security should be constantly developed so that
copying or double spending of currency can be prevented (Brands, 1995; Medvinsky
and Neuman, 1993).
• Authorisation type
Authorisation type is referred to as a form of control over the validity of the
transaction (Asokan et al., 1997). One might argue though that this characteristic is
part of the above-mentioned security characteristic. Authorisation type can be offline
or online (Asokan et al., 1997). Offline authorisation means that users can perform
transactions when the system is not connected to the network, without a third party
(authorisation server) to mediate the transactions (Asokan et al., 1997). Paper check
and payment by conventional cash are examples of offline authorisation while
internet payment systems are normally online. As an example of authorisation type, a
model that consists of 3 parties: customer, merchant and payment authority applies
payment order integrity concept and includes customer merchant agreement to verify
payment order (Raghuwanshi et al., 2009).
• Trust
One of the most important issues and commonly discussed in e-payment research is
trust (Chandra et al., 2010; Chellappa, 2002; Chen and Barnes, 2007; Gefen, 2000;
Hanzaee and Alinejad, 2012; Ho and See-To, 2010; Kim et al., 2010b; Lutz et al.,
2012; Maroofi et al., 2013; McKnight et al., 2000, 2002; Tan and Sutherland, 2010).
In this context, trust, or customer trust, refers to the level of customer confidence in
which money will not be stolen and personal information will not be misused, and all
parties involved will not act against users’ interests even if the system used by the
users is imperfect (Abrazhevich, 2001). Reputation or previous experience with the
seller has some influence on trust such that good reputation or positive experience
will increase trust on the payment system and vice versa (Egger, 2003). Customer
trust can be developed by the two dimensions, namely trust in the payment system
provider and trust in the technology facilitated by the provider characteristics and the
technology characteristics (Chandra et al., 2010). Concerning other characteristics,
trust had been hypothesised related to the above-mentioned security characteristic
(Chellappa, 2002; Hanzaee and Alinejad, 2012; Kim et al., 2010b).
• Reliability
Users would certainly need a reliable payment system. The payment service
availability will depend on the availability and the success of payment infrastructure
operation (Medvinsky and Neuman, 1993; Neuman and Medvinsky, 1995).
Therefore, payment transactions must be atomic; they occur entirely or not at all, but
they never hang in an unknown or inconsistent state because no user would accept a
loss of money due to a system crash (Asokan et al., 1997). Moreover, payment
system would be expected to cope with various threats, such as attacks from hackers
(Neuman and Medvinsky, 1995). If a failure occurs in the payment system, the
payment service should be able to be restored immediately.
• Convertibility
Various people incline to choose different payment systems subject to their personal
needs. However, as an individual, a user could end up using many different payment
systems such that each of the system fits his/her diverse needs. In such situation, the
money represented by a payment mechanism is expected to be easily converted to
the money represented by other mechanisms (Neuman and Medvinsky, 1995), e.g., a
user can withdraw funds from his PayPal account by requesting an electronic funds
transfer to his bank account. Convertibility aims to support business transactions
with no boundary.
In addition, the multi-currency characteristic identified by Abrazhevich (2004)
is considered as part of the convertibility characteristic. The characteristic is
exemplified, e.g., by the ability of users to send and receive PayPal payments in
Canadian Dollars, Euros, Pounds Sterling, or Yen, as well as US Dollars, etc
(Abrazhevich, 2009).
• Ease of use (usability)

Davis (1989) defined ease of use as “the degree to which a person believes that
using a particular system would be free of effort”. Thus, users should not be
relentlessly disturbed to provide payment information and that payment ought to
occur automatically (Neuman and Medvinsky, 1995). This implies that payment
system should not be complicated or complex such that payment process must be
made in a way that is easy and user-friendly (Guttmann, 2003); otherwise customers
will likely refrain from using it (Abrazhevich, 2001).
• Interoperability
A payment system is said to be interoperable if it is not dependent on a single
company, thus it is open and allows other interested parties to join (Abrazhevich,
2001). This can be achieved through the use of open standards in data transmission
protocols and infrastructure (Abrazhevich, 2001). An interoperable system can more
quickly get a customer base that is needed for the development in the future and thus
will have a higher adoption rate.
• Scalability
Payment infrastructure must be able to handle new users as they grow. Payment
systems should continue to work normally without any decrease in performance and
be able to maintain quality of service, even when users grow (Medvinsky and
Neuman, 1993; Neuman and Medvinsky, 1995). Example of systems that have a low
level of scalability is a system that requires the installation of additional software and
hardware along with the increasing number of users (Abrazhevich, 2001). In this
situation, adding new users will certainly increase cost.
• Efficiency
This characteristic is particularly important for micropayments and small
payments. A payment system must be capable of processing small payments and
micropayments without compromising performance and without imposing high costs
such that the transaction cost to process transactions in small amounts is reasonable
(Hauser et al., 1996; Rivest and Shamir, 1996). PayPal exemplifies this characteristic
in comparison with credit cards and debit cards for paying small amounts of money
online (Abrazhevich, 2009).
• Applicability
The added value of a payment mechanism depends on the suitability of the
mechanism to buy things. Applicability (or acceptability, as it is referred to by
Medvinsky and Neuman, 1993; Neuman and Medvinsky, 1995) of a payment system
is defined as “the extent to which it is accepted for payment at point of sale” or on
e-commerce in our case.
For example, cash payment is widely accepted in almost all places in the offline
world, so it has a very high level of applicability. Another example, debit cards and
credit cards also have a very high level of applicability especially in developed
countries (Abrazhevich, 2001).
3 Behaviour and technology acceptance theories
There are many theories about behaviour and customer/user acceptance associated with
the use or adoption of a particular technology. These theories continue to evolve over
time. Most studies of technology adoption are rooted in behavioural intention. They state
that user’s intention to adopt a new technology is a conscious effort that can be explained
and predicted by their behavioural intentions. The theory of reasoned action (TRA)
(Fishbein and Ajzen, 1975), the theory of planned behaviour (TPB) (Taylor and Todd,
1995), and the technology acceptance model (TAM) (Davis, 1989) are intentions-based
theories and some of the most popular models have emerged from this school of thought
(Chau and Hu, 2002).
Formulated by Fishbein and Ajzen (1975), the TRA is a model used to describe how
attitudes and beliefs correlate with individual intention to do something. The TRA posits
that individual’s behaviour intention is determined jointly by two factors: attitude
towards behaviour and subjective norm. Attitude towards behaviour is defined as “an
individual’s positive or negative feeling about performing behaviour” whereas subjective
norms can be viewed as “an individual’s perception of the social pressure on the
individual to perform the behaviour” (Ajzen and Fishbein, 1980; Fishbein and Ajzen,
1975). As an intention-based model that is derived from social psychology discipline, the
TRA has a proven track record in predicting and explaining “virtually all human
behaviour” (Ajzen and Fishbein, 1980).
The TPB is an extension of the TRA to consider the condition in which individuals do
not have full control over the will of their behaviour (Ajzen, 1991; Taylor and Todd,
1995). The inclusion of the third determinant of the behavioural intention, i.e., perceived
behavioural control, is what distinguishes the TPB from the TRA. The TPB recognises
that probably not all behaviour is under individual’s volitional control (Ajzen, 1991;
Ajzen and Madden, 1986).
The TAM is a theory to model how users accept and use a technology (Davis, 1989).
In the TAM, there are two main factors that influence users’ decision to use the
technology, namely: perceived usefulness and perceived ease-of-use. Perceived
usefulness is defined as “the degree to which users believe that using a particular system
would enhance their job performance”, while perceived ease-of-use is defined “as the
degree to which users believe that using a particular system is easy to use” (Davis, 1989).
Other important study related to technology acceptance is the innovation
diffusion theory (IDT). The IDT, which is proposed by Rogers (1983), includes five
innovation characteristics: relative advantage, compatibility, complexity, trialability, and
observability. The IDT has been validated by various researches that include
organisations and individuals (Choudhury and Karahanna, 2008; Kim et al., 2010a;
Mallat, 2007; Wu et al., 2007). Nevertheless, results of the meta-analysis conducted by
Tornatzky and Klein (1982) showed that, of the proposed attributes, only relative
advantage, compatibility, and complexity are consistently related to utilisation or
adoption decisions.
These theories are the basis for the emergence of a variety of other theories such as
the IS success model of DeLone and McLean (1992) and applied in a variety of
technology adoption, such as clinic information systems (Sarlan et al., 2013), WiMax
(Daim et al., 2013b), online food services (Daim et al., 2013a), online banking
information system (Chandio et al., 2013) and tax software (McLeod and Pippin, 2012).
4 Research conceptual model
In developing the conceptual model proposed in this study, there are several theories
underlying the relationships among variables, namely the IDT model, characteristics of
the payment systems, social influences, and individual traits. Traditional adoption models
generally ignore personal trait as an important factor to explain the adoption behaviour of
customers (Agarwal and Prasad, 1998). Some studies have shown that the impact of
several factors (e.g., behavioural beliefs, social influences, and personal trait) on the
intention to use information systems varies at different stages of early implementation or
in continuous use of information systems (Karahanna et al., 1999; Legris et al., 2003).
4.1 Behavioural beliefs and relation to behavioural intention

Behavioural intention refers to the desire of individuals to perform or not perform some
specified future behaviour (Venkatesh and Davis, 2000). In this study, behavioural
intention refers to the intention of consumers to use e-payment. On IDT (Rogers, 1983),
the adoption of a technological innovation is influenced by a variety of behavioural
beliefs. Results of the study by Yang et al. (2011) showed that behavioural intention of
mobile payment is affected by behavioural beliefs, which is divided into two parts, viz.
positive and negative utilities. In this study, the negative utility is represented by
perceived risk, while the positive utility is represented by relative advantage.
E-payment as a payment instrument will offer relative advantages for its users.
Relative advantages are defined as “the extent to which an innovation is perceived as
being better than the idea of it supersedes” (Rogers, 1983). Related to this, e-payment is
considered better than offline payment because it offers many advantages such as
efficiency for the absence from having to use cash, convertibility as it can easily convert
‘money’ to other currencies, and so on. A range of benefits provided by e-payment will
encourage the use of e-payment systems; therefore our hypothesis can be formulated as
follows:
Hypothesis 1 Relative advantages perceived from e-payment services positively affect
behavioural intention to adopt e-payment.
E-payment will also pose risks for its users. Perceived risk is considered as a
non-monetary impact related to the adoption decision (Chandra et al., 2010; Lee, 2009;
Wu and Wang, 2005; Yang et al., 2011), for example, insecurity, fear of data misuse, etc.
Thus, perceived risk is considered hindering the adoption of the e-payment technology,
so a hypothesis can be formulated as follows:
Hypothesis 2 The perceived risks of e-payment services negatively affect the intention
to adopt it.
4.2 Social influences and personal innovativeness in information technology

and their relationship to behavioural beliefs and behavioural intention
Social influences in this study refer to the pressure from social on the technology
adoption or innovation (Lu et al., 2005; Yang et al., 2011). In the literature of innovation
diffusion, social influence has long been regarded as an important element in explaining
adoption behaviour (Cooper and Zmud, 1990; Karahanna et al., 1999). Social influences
in this study are related to subjective norms and images by considering users’
voluntariness in using e-payment (Lu et al., 2005). Image is defined as “the degree to
which use of an innovation is perceived to enhance one’s image or status in one’s social
system” (Moore and Benbasat, 1991). In the initial phase of implementation, consumers’
decision is usually made due to others’ influence. The influence can either be positive
because they feel the benefits of using e-payment or negative because of the unpleasant
experience. The subjective norms and images would also have a direct impact in
improving the adoption of e-payment. Thus, three hypotheses can be formulated as
follows:
Hypothesis 3 Social influences in the form of subjective norms and images positively
affect the intention to adopt e-payment system.
Hypothesis 4 Social influences in the form of subjective norms and images positively
affect the perceived relative advantages of e-payment system in the early
stages of implementation.
Hypothesis 5 Social influences in the form of subjective norms and images negatively
affect the risk of e-payment system in the early stages of implementation.
In addition to the social influence, another factor which is often seen as a driving factor to
adopt technology is the personal innovativeness in information technology (PIIT). The
PIIT is defined by Agarwal and Prasad (1998) as a person’s willingness to try all new
information technologies. Most people feel challenged to try an e-payment system
because they assume that the system will give more benefits than the other one, the
offline system. However, as a new technology, e-payment is also considered posing risks
to customers. Thus, we formulated the following hypotheses:
Hypothesis 6 PIIT positively affects the intention to adopt e-payment system.
Hypothesis 7 PIIT positively affects perceived relative advantages from adopting

e-payment system.
Hypothesis 8 PIIT negatively affects perceived risks in adopting e-payment system.
4.3 E-payment system characteristics and their relationship to behavioural

beliefs and behavioural intention
Payment characteristics listed in some literature (Abrazhevich, 2001, 2004; Neuman and
Medvinsky, 1995) are anonymity, applicability, authorisation type, convertibility, ease of
use, efficiency, interoperability, reliability, scalability, security, traceability, and trust. In
the study of Abrazhevich (2001), some characteristics of the payment systems such as
authorisation type, interoperability, and scalability are considered too technical as these
are technology related characteristics and although these characteristics may be important
for user acceptance, yet they are transparent to the customers because they do not directly
affect the interactions that occur during the payment activities. The results of the
Abrazhevich (2004) study finally showed that the main characteristics that must be
considered in designing a payment system are ease of use, convertibility, privacy,
security, and trust. These five characteristics of payment system comprise the focus of
this study.
Trust is a form of customer confidence in the vendor’s commitment to providing an

honest transaction processing, secure, uphold privacy by not spreading the data provided
by consumers to unauthorised parties, and consumer comfort (Tan and Sutherland, 2010).
In the study of Gefen (2000) and McKnight et al. (2000), it was shown that trust is
considered as a critical factor that affects the success of the deployment of e-commerce.
In the context of e-commerce transactions, intention of consumers to use an e-payment
system eventually depends on the level of trust to the system such that if the trust level is
insufficient then the consumer will likely switch to use another system with a higher level
of trust. Thus, the following hypothesis can be drawn as follows:
Hypothesis 9 Trust positively affects the intention to adopt e-payment system.
Privacy is generally defined as “the ability of individuals to control how their personal
information is obtained and used” (Westin, 1967). At the time of making transactions
with e-payment, the consumers will be prompted to enter their personal data, such as
phone number, e-mail, date of birth or credit card data. Not all e-payment service
providers can be trusted; therefore consumers are often concerned that their personal data
will be misused. For example, consumers’ phone number can be disseminated that most
likely will disrupt their lives. This will undoubtedly affect the perception of risk that will
be accepted by consumers who use e-payment and affect their intention to use e-payment.
Taking this into account, we outlined our hypotheses as follows:
Hypothesis 10 Privacy negatively affects the perceived risks in adopting e-payment

system.
Hypothesis 11 Privacy positively affects the trust in adopting e-payment system.
Security is related to the technology used in e-commerce transactions (Gurung, 2006).

Let us say the database or application of an online store has the potential to be attacked
by irresponsible parties. Consequently, there are fears that the data and information of the
consumers are at risk for being stolen and misused. The presence of an e-payment
security technology will certainly increase the level of trust of consumers to e-payment
service providers (Chellappa, 2002). In addition, the security technology used in
e-payment will reduce the perception of risk accepted by consumers (Kim et al., 2007).
Therefore, our hypotheses are formulated as follows:
Hypothesis 12 Security negatively influences on perceived risk in adopting e-payment

system.
Hypothesis 13 Security positively influences trust in adopting e-payment system.
Ease of use is one of the behavioural intention factors that is often mentioned in the
literature because it provides the foundation for the TAM (Davis, 1989). In the context of
e-payment, the ease of use of e-payment will certainly have an impact on consumer
intentions to use e-payment. Moreover, according to the theory of TAM, ease of use also
affects the perceived usefulness of a technology. In the context of this study, perceived
usefulness can be defined as the perceived relative advantages of an e-payment system.
The easier the e-payment technologies, the higher the relative advantages gained by
consumers. Thus, two hypotheses are formulated as follows:
Hypothesis 14 Ease of use positively influences the intention to adopt e-payment

system.
Hypothesis 15 Ease of use positively influences perceived relative advantages in

adopting e-payment system.
Convertibility is the benefit to convert/transfer money to other forms or to other payment

systems. Fund/money represented by the payment mechanism should be easily converted
into fund/money represented by other payment systems. Consumers should be able to
transfer money from e-payment system to other accepted forms of money, e.g., received
in cash, or transfer back to the customer’s account. As e-payment fund gets easier to be
converted to other forms, consumers will certainly feel the benefits’ value of the
e-payment. Thus, the following hypothesis can be drawn:
Hypothesis 16 Convertibility positively affects the relative advantages in adopting

e-payment system.
Eventually, the complete conceptual model of this research can be seen in Figure 1.
Figure 1 Conceptual model
Social influences Behavioral beliefs

H5
Subjective norm
& image Perceived risk
Personal trait H4
H8
PITT H10 H3
H2
H6
Payment characteritics
H12
Privacy Behavioural
H9 intention
H11
Trust
H13 H7 H14
H1
Security
Ease of use H15 Relative

advantages
Convertibility H16
5 Methodology
5.1 Data collecting procedure

This research was conducted using quantitative approach. The survey instrument was
developed based on the indicators of each variable in the research conceptual model. The
indicators were derived from theory and/or previous researches. The initial draft of our
research instrument was refined through a readability test to five respondents with
various discipline backgrounds. Through the readability test, we aimed to gather
feedbacks and suggestions from respondents regarding the questionnaires design.
After the survey instrument passed the test and all questions can be well-understood,
we performed a pre-test by distributing questionnaires to 30 students from various
departments at Universitas Indonesia. We used Cronbach Alpha and Corrected Item-
Total Correlation to check the internal validity and reliability of our instrument. In
addition, the pre-test was also conducted to see whether or not the respondents
understand each of the questions (Malhotra, 2008).
Our analysis results showed that all indicators of our instrument have passed the
validity and reliability test for the corrected item-total correlation of each indicator is
above 0.361. The value of 0.361 was obtained from the r-table with degree of freedom
(df) number N-2 or 28, taking into account the pretest sample size of 30. In addition, all
variables also satisfied the reliability test with the Cronbachs Alpha values above 0.8.
The final questionnaire was then distributed online to users of the B2C e-commerce
in Indonesia. The target respondents include all users who have access to/use the B2C
e-commerce site for the purpose of buying goods, compare prices, or just looking for
information. Sampling was done by distributing questionnaires to trading forums such as
Kaskus, mailing lists and through social media such as Facebook, Twitter, Google Plus,
Plurk, and Tumblr. Data collection was conducted within two months. We ended the
respondent searching after the amount of data obtained is over the minimum requirement
to be processed using structural equation modelling (SEM) with a maximum likelihood
estimation (MLE) procedure, i.e., 100–150 samples (Hair et al., 2006). In addition to that
requirement, we also consider that an ideal sample size is as much as five times of the
number of indicators/questions (Wijanto, 2008). The number of indicators/questions in
our questionnaire is 33 so the required samples should be at least 165.
5.2 Instruments
The questionnaire in this research was developed using 6-points Likert scale that has a
range of (1) to express ‘strongly disagree’ and (6) to express ‘strongly agree’. The
previous research showed that the 6-point Likert scale tends to provide higher
discrimination and reliability than the 5-point Likert scale (Chomeya, 1970).
In total, there are ten research variables which were translated into 33 questionnaire
items. The indicators of each variable were adapted from previous studies, such as social
influences (Lu et al., 2005; Yang et al., 2011), PIIT (Agarwal and Prasad, 1998; Yang
et al., 2011), perceived risk (Chandra et al., 2010; Lee, 2009; Yang et al., 2011), relative
advantages (Kim et al., 2009; Shin, 2009; Yang et al., 2011), privacy (Chellappa, 2002),
Trust (Chellappa, 2002; Chandra et al., 2010), security (Chellappa, 2002), convertibility
(Abrazhevich, 2004), ease of use (Chandra et al., 2010; Davis, 1989), behavioural
intention (Davis, 1989; Venkatesh and Davis, 2000; Yang et al., 2011).
Details on the instrument used in this study can be found in Appendix.
6 Results
6.1 Respondent demographics

From the data collection, we obtained 204 respondents of which 203 were considered
valid. One questionnaire was invalid as the respondent never used e-commerce. Table 1
shows the demographics of the respondents who completed the questionnaires in this
study.
Table 1 Respondent demographics
Sex Respondents Profession Respondents

Male 109 Student 88
Female 94 Government/private company employee 87
Age Respondents Enterpreneur 18
< 24 166 Others 10
25-35 30 Location Respondents
>35 7 Greater-Jakarta 164
Education Respondents Non Greater-Jakarta 39
High school 70 Salary Respondents
Diploma 8 < 2 millions 99
Bachelor 118 2–5 millions 61
Postgraduate 7 > 5 millions 43
In terms of the site which is most frequently visited, Kaskus online trading forum is the
most visited website. This is consistent with the statistics and other available empirical
data which showed Kaskus as the largest online trading forum in Indonesia. Other
websites that have many visitors are online flight booking sites, Tokobagus and
Bhinneka.
In terms of the activities undertaken in e-commerce, most of the respondents
(185 respondents) use e-commerce to compare prices, 173 respondents use e-commerce
to purchase goods and 172 respondents use e-commerce to look for specification of
goods. The interesting fact is there are number of people who do not make purchases on
e-commerce site despite the fact that they already compare prices or other related
activities. Thus, it is also consistent with the existing statistics that showed the lack of
online purchases made by Indonesian e-commerce users.
6.2 Measurement and structural model testing

Anderson and Gerbing (1988) recommended two steps to perform an evaluation of the
data from the questionnaire. The first phase is the evaluation of the measurement model
to measure the reliability and validity of the research instrument. The next stage is the
evaluation of the structural models to test the research hypotheses and fitness of the
models.
Table 2 Loading factor, standardised item loading, CR and VE of instrument
Standardised
Variable Indicator T-values CR VE
loading factor
Social influences SN1 14.41 0.85 0.89 0.74
SN2 14.10 0.84
SN3 15.14 0.88
Personal innovativeness in PIIT1 10.95 0.87 0.89 0.80
information technology PIIT2 11.34 0.91
Perceived risk PRS1 11.49 0.75 0.82 0.53
PRS2 12.68 0.80
PRS3 11.03 0.72
PRS4 9.33 0.64
Relative advantages REA1 9.75 0.65 0.82 0.54
REA2 12.72 0.79
REA3 11.99 0.76
REA4 11.22 0.72
Privacy PRI1 10.63 0.71 0.70 0.44
PRI2 9.46 0.65
PRI3 9.23 0.63
Trust TRU1 13.27 0.80 0.82 0.54
TRU2 12.85 0.78
TRU3 8.77 0.59
TRU4 12.05 0.75
Security SEC1 14.30 0.83 0.88 0.66
SEC2 13.99 0.82
SEC3 14.91 0.86
SEC4 11.54 0.72
Convertibility CON1 8.76 0.69 0.67 0.50
CON2 9.09 0.73
Ease of use EAS1 13.36 0.81 0.86 0.67
EAS2 14.52 0.86
EAS3 12.80 0.79
Behavioural intention INT1 11.82 0.74 0.88 0.65
INT2 12.75 0.78
INT3 15.03 0.87
INT4 14.22 0.84
We used LISREL software to conduct confirmatory factor analysis (CFA) for the validity
and reliability testing. Validity testing was done by looking at the suitability criteria of
the T-values and the standardised loading factor. The reliability was tested by looking at
the values of the construct reliability (CR) and variance extracted (VE). As it can be seen
in Table 2, all the indicators have passed the validity testing because the T-values of all
indicators are greater than 1.96 and the standardised loading factors for all indicators are
above 0.50. Meanwhile, for reliability testing, there is one variable that has CR value less
than 0.7, i.e., convertibility (COV) with CR = 0.67. Another variable that has VE value
less than 0.50 is privacy (PRI) with VE = 0.44. However, both variables could still be
considered reliable as other reliability criteria were met (PRI has CR value 0.70 and COV
has VE value 0.50). As the reliability of the two variables is still quite good, the two
variables were retained in the model.
The next stage is to test the structural model. Structural model testing was done by
looking at the values of main goodness of fit (GOF) criteria such as NFI, NNFI, GFI,
CFI, RMSEA and normed chi-square. Complete result of the GOF values for CFA and
structural models can be seen in Table 3. All the GOF values are above the recommended
value, except for a GFI value namely marginal fit. This indicates that overall the model is
considered to have good fitness (Gefen et al., 2000).
Table 3 Goodness of fit of CFA and structural model
Indicator Recommended value CFA Structural model Fitness

NFI > 0.90 0.92 0.92 Good fit
NNFI > 0.90 0.96 0.96 Good fit
GFI > 0.90 0.81 0.80 Marginal fit
CFI > 0.90 0.97 0.97 Good fit
RMSEA < 0.08 0.053 0.056 Good fit
Normed chi-square (X2/df) <2 1.58 1.63 Good fit
6.3 Hypotheses testing results

Table 4 shows the summary of the hypotheses tests (T-values) based on the results of the
structural model testing by using LISREL. Of the 16 hypotheses tested, only ten
hypotheses were accepted, while 6 others were rejected. Perceived risk by consumers
does not influence their intention to use e-payment. Hypotheses related to the social
influences and personal innovativeness was also rejected, except one hypothesis related
to social influences that affect the relative advantages which was proven significant.
Thus, all hypotheses that contain variables representing the characteristics of the payment
system in this study were accepted.
Another finding is that personal innovativeness in IT and social influences apparently
had no effect on the behavioural beliefs, except for the relationship between social
influences and relative advantage which is proven to be significant. This is in line with
the findings of Yang et al. (2011) which showed that to the current users, social
influences only have significant effect on the behavioural intention to continue using the
payment system as the respondents were users of e-commerce, so that they may already
have experience with e-payment. The social influences are fading along with the
experience of the use of the system (Yang et al., 2011). The personal innovativeness in
information technology does not significantly influence the relative advantages,
perceived risk, and behavioural intention to adopt e-payment. This result is slightly
different from the findings of Yang et al. (2011) which showed that personal innovation
had significant effect on relative advantages. However, its impact to other variables
showed similar results to this study.
Related to the e-payment system characteristics, this study showed that all the five
main characteristics of the e-payment system investigated in this study influence directly
or indirectly to the behavioural intention of consumers. Consumers’ perceived trust
toward e-payment service provider was proven to have significant effect on the
behavioural intention to adopt e-payment. Our finding is also consistent with other
studies that examined trust-based consumer decision-making models in e-commerce,
where trust significantly influenced the intention to purchase in e-commerce. The similar
result was also found by Abrazhevich (2004), which lead to the conclusion that trust is
one of the most important issues to consider in an e-payment system.
Table 4 Hypotheses testing results
Hypothesis T-value Significant/insignificant Conclusion

H1: REA Æ INT 5.17 Significant Hypothesis accepted
H2: PRS Æ INT –0.76 Insignificant Hypothesis rejected
H3: SN Æ INT –0.66 Insignificant Hypothesis rejected
H4: SN Æ REA 2.18 Significant Hypothesis accepted
H5: SN Æ PRS 0.54 Insignificant Hypothesis rejected
H6: PIIT Æ INT 1.49 Insignificant Hypothesis rejected
H7: PIIT Æ REA 1.03 Insignificant Hypothesis rejected
H8: PIIT Æ PRS 0.14 Insignificant Hypothesis rejected
H9: TRU Æ INT 2.67 Significant Hypothesis accepted
H10: PRI Æ PRS 3.30 Significant Hypothesis accepted
H11: PRI Æ TRU 3.40 Significant Hypothesis accepted
H12: SEC Æ PRS –4.77 Significant Hypothesis accepted
H13: SEC Æ TRU 5.57 Significant Hypothesis accepted
H14: EAS Æ INT 3.73 Significant Hypothesis accepted
H15: EAS Æ REA 3.49 Significant Hypothesis accepted
H16: COV Æ REA 3.32 Significant Hypothesis accepted
Privacy was also proven to significantly influence the perceived risk and trust. However,
our finding is different from the result of Kim et al. (2008) which showed that the
relationship between privacy and the perceived risk is inversely proportional or
negatively correlated. Furthermore, our results also showed that privacy significantly
affects trust. This result differs from the results of Chellappa (2002) which showed that
privacy did not directly affect trust, but indirectly affects trust through other variables.
Although the results of this study are different from other studies and theories, we
conclude that privacy determines indirectly the consumers’ intention to adopt e-payment
adoption through trust variable.
From our analysis, security significantly influences the perceived risk and trust. Other
studies that examined trust-based consumer decision-making models also showed similar
results (Kim et al., 2008). Meanwhile, Abrazhevich (2004) also explained that the safety
factor was considered as a very important issue for most respondents. In fact 75.3 % of
the respondents said they would stop using a payment system should they hear issues
concerning security breaches in the system (Abrazhevich, 2004).
In this study, ease of use was found to have a significant effect on behavioural
intentions to adopt e-payment. In addition, the ease of use also had a significant effect on
the relative advantages. This is consistent with the results of Davis (1989) and Kim et al.
(2010a), but in contrast to the finding of Chandra et al. (2010) which indicates that ease
of use did not affect the behavioural intention. Nevertheless, Abrazhevich study (2004)
revealed that ease of use was also considered as a payment system characteristic with
high priority.
Another finding in this study is that convertibility significantly influences the relative
advantage in adopting e-payment. This result is also in line with the results of
Abrazhevich (2004) which revealed that users showed relatively high dissatisfaction with
the lack of convertibility of the currencies of smart card systems. Dissatisfaction of
convertibility on smart card indicated that the user wants a high convertibility. This is
quite in line with the results of this study.
In general, this study exhibits that the characteristics of the e-payment system has
proved a significant influence on the adoption of e-payment to consumers in Indonesia.
Trust, privacy, security, ease of use and convertibility are among factors that determine
the adoption of e-payment in Indonesia. Indonesian consumers also tend to pay more
attention to the benefits they gained and to accept the risks when adopting a technology.
This requires the e-payment service providers to put more attention to their e-payment
system so as to provide more advantages compared to the conventional payment systems.
7 Implications
7.1 Theoretical implications

Ease of use, trust, security, privacy, and convertibility are payment system characteristics
that must be considered in providing e-payment services. These factors were proven to
have significant effects to consumer adoption of e-payment services. This implies the
need to create a payment system that meets these characteristics. Credit card for example,
meets the criteria convertibility as it can be used in a variety of currencies. Credit card is
also easy to use because it only requires information printed on the card when using it.
However, credit card also holds the potential abuse of privacy and security, so we need
additional mechanisms, e.g., using a one-time password for securing it. Related to
privacy, an e-payment system must be able to maintain privacy of its customers.
Customers registration data for example, should involve less ‘hands’ so as to minimise
misuse of data performed by, e.g., marketing officers. This can be done, for instance, by
combining offline and online registration when applying credit cards in a scenario in
which customers enter their detailed information online in order to limit data exposure.
7.2 Managerial implications

Concerning payment characteristics in the model, to provide an ease of use system,
e-payment service provider must provide a convenient way for registration with minimal
steps, yet still guaranteeing security. Meanwhile, to build customers’ trust, e-payment
services must guarantee data security and customer privacy by providing clear rules and a
quick response to any complaint or violation. In addition to the regulations, security can
also be guaranteed by providing a strong internal system that makes it difficult for
hackers to penetrate. Taking into account the medium level of application developer
awareness to application security (Hidayanto et al., 2013), it needs continuous efforts of
organisations to conduct security awareness programme to their employees. To improve
convertibility, e-payment service providers should collaborate with many banks or other
financial institutions so that customers think it is easy to exchange, withdraw or transfer
fund to other payment systems at any time.
As customers incline to only see benefits for adopting an e-payment system, it is
suggested that e-payment service providers run awareness programmes concerning
various advantages of using e-payment system. The programmes can also be a learning
medium for consumers that are expected to participate in informing other consumers of
the advantages of using e-payment.
Security and privacy are the two factors that should be considered by the Indonesian
government. The government should establish law to protect customer data. Indonesia
already had law governing information and electronic transactions. However, the law
focuses more on aspects related to securing information and electronic transaction, and
provides less coverage on privacy. Thus, the government still needs an effort to establish
policy and/or law that covers the privacy issues. The government should also encourage
banks or other financial institutions to launch their own e-payment systems or to
cooperate with other parties to provide the systems.
8 Conclusions
This research proposes and tests a behavioural intention model from social influences,
personal traits, payment characteristics through behavioural beliefs. The model can serve
as an initial step in the direction of effective e-payment system adoption in Indonesia.
The model will mostly likely produce better data as it takes user-related perspective to
determine the e-payment system characteristics and putting aside technological aspect so
as it allows the customer to focus on visible characteristics only.
The most dominant factor that directly affects behavioural intention to adopt
e-payment is relative advantage, followed by ease of use and trust to the system. These
three factors have a significantly direct impact on behavioural intention of consumers to
adopt e-payment systems. Relative advantage as the positive utility has a considerable
role in the adoption of e-payment system. In contrast, perceived risk as the negative
utility in behavioural beliefs does not give significant effect on the intention of
Indonesian consumers to use e-payment systems. As a result, we can infer that
Indonesian consumers can be typically characterised by their sole consideration for the
advantages they will get and subsequently rule out risks for adopting a new technology.
Security, privacy, and convertibility issues were also proven to be determinants of
e-payment adoption, although the effect is indirect. Social influences also have an
indirect effect to e-payment adoption through relative advantages. Consequently,
e-payment service providers should plan awareness programmes regarding the benefits of
e-payment usage so that customers are willing to invite their friends to use e-payment.
In general, this study revealed that the characteristics of the e-payment system have
proved a significant influence on the adoption of e-payment to consumers in Indonesia.
Trust, privacy, security, ease of use and convertibility are among factors that determine
the adoption of e-payment in Indonesia. Indonesian consumers also tend to pay more
attention to the benefits they gained and to accept the risks when adopting a technology.
This requires the e-payment service providers to put more attention to their e-payment
system so as to provide more advantages compared to the conventional payment systems.
9 Limitations and future research
This research has some limitations that can provide basis for future research. First,
concerning the data, it was collected through self-administered questionnaires therefore
there is no control of who actually fills out the questionnaires. This could potentially bias
respondent’s response. Moreover, a prize could have been offered for respondents to get
much more data and thus provide stronger argument. Another remark is regarding
occupation data distribution in which students comprise 43% of total respondents that is
considered too high. Secondly, concerning Kaskus as the most visited e-commerce site by
the respondents, it does not support credit card or any other integrated e-payment
systems. Only just recently, in 2012, it launched Kaspay, an e-wallet, as e-payment
system to support small/micropayments (up to 5 million rupiah) to support the e-market
transactions between sellers and buyers. As a comparison, Bhinneka has supported
several integrated e-payment system, e.g., credit card, debit card, KlikPay, etc. For this
research focuses only on customer adoption, further research concerning merchant
adoption in Indonesia needs to be performed to give a complete analysis on e-payment
adoption in Indonesia. Third, to fill in the gap for the law, policy and regulations by the
Indonesia government as the authority concerning e-payment system, further research
needs to be conducted in order to determine the appropriate balance between privacy,
traceability and security so as to prevent, detect and prosecute financial crime, e.g.,
money laundering, etc.
Acknowledgements
The authors would like to gratefully acknowledge the insightful reviews and suggestions
from the reviewers on the earlier version of this paper. Their comments have substantially
helped to the paper improvement.
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Appendix
Research instrument
1 Social influences (SN)
SN1 I think people around me who use the e-payment has prestige/more than those
who do not use
SN2 people who use e-payment has high social status
SN3 use of e-payment is a marker of status among my friends.
2 PIIT
PT1 if I hear about a new technology, I would look for a way to give it a try.
PT2 I experiment with new information technologies.
3 Perceived risk (PRS)

PRS1 I do not feel safe when sending sensitive information through e-payment
PRS2 I find information about my e-payment transactions will be known to others
PRS3 I believe online e-transactions can be altered or deleted by someone else
PRS4 I believe that the overall risks of e-payment system are high.
4 Relative advantages (REA)
REA1 E-payment has more benefits than offline payment as services is not limited
to a particular location
REA2 E-payment is more convenient than offline payments
REA3 E-payment is more efficient than offline payments
REA4 E-payment is more effective than offline payments.
5 Privacy (PRI)
PRI1 I realise that the information that I will give for the use of e-payment is
correct
PRI2 I believe, I have control over how the information I provide will be used by
the e-payment
PRI3 I believe there is an effective mechanism to address the abuse of the
information I give to the e-payment
6 Trust (TRU)
TRU1 I believe e-payment system can be trusted
TRU2 I believe e-payment system in general
TRU3 Even if e-payment system is not monitored, I would trust the service provider
has done the job right
TRU4 I believe e-payment service provider will tell me if there is a problem related
to the failure of the transaction or functionality
7 Security (SEC)
SEC1 I have confidence in the security of transactions when using e-payment
SEC2 I believe that the other party (who is not authorised ) can not see the
information I provide during transactions using e-payment
SEC3 I believe the information I provide during the use of e-payment will not be
manipulated by those who do not deserve
SEC4 I believe that the other party (who is not authorised) can not save the
information I provide during transactions using e-payment .
8 Convertibility (CON)
CON1 I am sure, I can withdraw the money in my e-payment account to cash
CON2 I am sure, I can top up my e-payment accounts from anywhere.
9 Ease of use (EAS)

EAS1 I am sure I could learn to use e-payment system easily
EAS2 I think to be skilled in the use of e-payment system is easy
EAS3 Overall, I would find the e-payment system is easy to use.
10 Behavioural intention (INT)
INT1 If given the opportunity, I intend to adopt e-payment system in the future
INT2 If given a choice of payment systems, I would choose to use e-payment
INT3 If given chance, I predict that I will often use e-payment system in the future
INT4 I would highly recommend others to use the e-payment system.
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Examining the Relationship of Payment System Characteristics and

Article in International Journal of Business Information Systems · May 2015

Achmad Nizar Hidayanto Puspa Sandhyaduhita

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Examining the relationship of payment system

Achmad Nizar Hidayanto*,

Abstract: This study is conducted to analyse factors that influence the

Keywords: e-payment; e-commerce; behavioural beliefs; social influences;

Reference to this paper should be made as follows: Hidayanto, A.N.,

Biographical notes: Achmad Nizar Hidayanto is the Head of Information

Copyright © 2015 Inderscience Enterprises Ltd.

Luqman Syauqi Hidayat obtained his Bachelor in Information Systems from

Puspa Indahati Sandhyaduhita is a Lecturer at the Faculty of Computer Science,

Putu Wuri Handayani is a Lecturer at the Faculty of Computer Science,

2 Payment systems in e-commerce and its characteristics

2.1 Payment methods in e-commerce

• Virtual wallet: customer’s fund data is stored in a software application.

• E-check: the digital version of traditional paper check.

• Account-based micropayments: aside from using e-money-based system to make

• Mobile payment: use smart phone or other emerging devices to pay.

A sub-type of e-payment system namely internet-based payment system can be defined as

2.2 E-commerce payment systems in Indonesia

2.3 Characteristics of payment systems

because buyer information is not stored. Thus, cash payment is considered as

• Ease of use (usability)

3 Behaviour and technology acceptance theories

4 Research conceptual model

4.1 Behavioural beliefs and relation to behavioural intention

4.2 Social influences and personal innovativeness in information technology

Hypothesis 7 PIIT positively affects perceived relative advantages from adopting

4.3 E-payment system characteristics and their relationship to behavioural

Trust is a form of customer confidence in the vendor’s commitment to providing an

Hypothesis 9 Trust positively affects the intention to adopt e-payment system.

Hypothesis 10 Privacy negatively affects the perceived risks in adopting e-payment

Hypothesis 11 Privacy positively affects the trust in adopting e-payment system.

Security is related to the technology used in e-commerce transactions (Gurung, 2006).

Hypothesis 12 Security negatively influences on perceived risk in adopting e-payment

Hypothesis 13 Security positively influences trust in adopting e-payment system.

Hypothesis 14 Ease of use positively influences the intention to adopt e-payment

Hypothesis 15 Ease of use positively influences perceived relative advantages in

Convertibility is the benefit to convert/transfer money to other forms or to other payment

Hypothesis 16 Convertibility positively affects the relative advantages in adopting

Figure 1 Conceptual model

Social influences Behavioral beliefs

Ease of use H15 Relative

5.1 Data collecting procedure

Details on the instrument used in this study can be found in Appendix.

6.1 Respondent demographics

Sex Respondents Profession Respondents

6.2 Measurement and structural model testing

Table 2 Loading factor, standardised item loading, CR and VE of instrument

Indicator Recommended value CFA Structural model Fitness

6.3 Hypotheses testing results

Hypothesis T-value Significant/insignificant Conclusion

7.1 Theoretical implications

7.2 Managerial implications

9 Limitations and future research

InternetWorldStats.com. (2010b) Internet Users – Top 20 Countries – Internet Usage, Miniwatts

3 Perceived risk (PRS)