International Journal of Management (IJM)

Volume 12, Issue 3, March 2021, pp.125-133, Article ID: IJM_12_03_011

Available online at http://iaeme.com/Home/issue/IJM?Volume=12&Issue=3
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
DOI: 10.34218/IJM.12.3.2021.011

© IAEME Publication Scopus Indexed

A STUDY ON USER PERCEIVED TRUST IN

MOBILE WALLET
Arun Prasad G.S
Research Scholar, College of Management, SRM Institute of Science and Technology,
Kattankulathur, Tamil Nadu, India

Dr. Arivazhagan R
Associate Professor, College of Management, SRM Institute of Science and Technology,
Kattankulathur, Tamil Nadu, India

ABSTRACT
The Mobile Wallet is an electronic wallet that keeps the information about payment
cards on a mobile device. It presents a great opportunity for the user to make online or
offline payments across platforms instantly. As no opportunity comes without risk, if
the system is not robust, the economic importance given to this technology would lead
to cybercrimes that would eventually result in a financial loss for the users. But, the
financial institutions and mobile wallet companies are taking effective measures to
ensure the user interest is protected and transactions are secured. While steps are being
taken to ensure safer transactions, we aren’t sure whether the customers are
considering this while transacting through mobile wallets. In response to this problem,
this study proposes to investigate the users’ perception towards Mobile Wallet’s
security and trust. Descriptive research design is adopted and data was collected from
people who are using mobile wallets. Around 147 responses were collected by using the
non-probability, purposive sampling technique through an online survey, email survey,
and personal interview. Then data was analyzed through suitable statistical tools and
results were validated through appropriate discussions. Study reveals five significant
variables that influence trust among users and out of which technology was playing a
significant role.
Key words: Cashless Payments, Mobile wallets, Perceived Trust, Reliability, Security
features, Social Influence
Cite this Article: Arun Prasad G.S and Arivazhagan R, A Study on User Perceived
Trust in Mobile Wallet, International Journal of Management (IJM), 12(3), 2021, pp.
125-133.
http://iaeme.com/Home/issue/IJM?Volume=12&Issue=3

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 A Study on User Perceived Trust in Mobile Wallet

1. INTRODUCTION
With the adoption of core banking solutions, net banking, and card payments, the way we make
large transactions has changed significantly. Similarly, in the payment space, Mobile wallet, or
digital wallet, is also trying to bring about a revolution in low-value transactions. Mobile
wallets, not only provide customer convenience but also provides marketers with a lot of
insights to understand consumer behavior, the choice to formulate their marketing strategy
accordingly as all online transactions are completed. The key advantage of using a mobile
wallet is that we get a convenient, one-stop shopping experience where we can make purchases
in the store, pay bills, book tickets, transfer funds, redeem coupons, receive loyalty points
without ever leaving an app.
According to Sampath Sharma Nariyanuri (S&P) [1] India Mobile payments report, India’s
drive towards cashless payments accelerated in 2019. Mobile payments that bypass card rails
rose 163% to$286 billion in 2019. Point-of-sale transactions completed using debit and credit
cards, including online and in-app transactions, grew 24% to $204 billion. As per Mint
Financial daily [2], Digital payment firms such as PhonePe, Paytm, Amazon Pay, and others
have seen a nearly 50% spike in transactions through their digital wallets since the start of the
covid-19 crisis. The recent surge in digital wallet transactions shows that post covid19 outbreak,
more people opted for online methods to pay instead of cash. Also according to National
Payments Corporation of India (NPCI) recent data, the total transaction performed through UPI
excluding Bhim & USSD has almost doubled compared to the previous financial year (F.Y
2019-20) with 24% contribution coming from the above payment type against total financial
transactions recorded[3]. UPI transactions are largely performed through mobile wallets. The
above information indicates payment apps usage is on the rise in India, driven by extensive
promotional activities and also backed by government initiatives on the digital economy.
With the penetration of the Smartphone Industry, the likelihood of more consumers
embracing digital wallets for payments appears to be too bright. Also, the Covid pandemic
situation certainly has taken this adoption to the next level. However, user perception and
acceptance of mobile wallets are very critical in the long run for its sustainability. Any
technology which involves financial transactions needs public trust. Users should have the trust
and confidence that the technology is more secured and protected. Information on the security
aspects of the technology has to be communicated in detail to the users and they should aware
of the layers of protection.

1.1 Mobile Wallets

In the traditional meaning of the term, "wallet" refers to a purse or folding case containing
money or personal details such as an identification card. An E-wallet or Digital wallet means
an electronic wallet that stores both financial as well as personal information [4]. In a mobile
wallet, all things that a physical wallet would hold can be stored. It can store debit cards, credit
cards, loyalty cards and therefore gives customers more diversified and secured options to make
payments. With this technology, you can pay your bills online as well as offline without having
to pay by cash or use your credit or debit card every time.
With government promotion on paperless and e-documents with various initiatives like
mParivahan for transport information (Driving licence, RC, Insurance) and other identity
documents, the need to carry a physical wallet doesn’t exist. A mobile wallet, therefore a perfect
alternative for a real wallet. In addition to that, Mobile wallets play an important role in
promoting financial inclusion in the country by extending financial services to all segments of
the people, including those who aren’t part of the traditional banking system. In emerging
economies, mobile applications provide a platform to target a larger population having no bank
account but having a mobile phone [5].

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 Arun Prasad G.S and Arivazhagan R

The key benefit of using a mobile wallet is that we get a convenient one-stop shopping
experience where we can make transactions in the store, pay bills, book tickets, transfer money,
redeem coupons, get loyalty points. Some of the other benefits of using a mobile wallet include
variety, rewards & offers, security, simplified user interface.

2. LITERATURE REVIEW
Various studies have been examined under literature review. Deepak Chawla and Himanshi
Joshi [6] in their study confirms the importance of security as the main predictor of trust. Also
through another study, they emphasized the need to develop strategies to enhance the
confidence among old consumers about the security of the mobile wallet [7].
A Seetharaman [8] through his study considers transaction security as one of the strong
influencers for adopting the mobile wallet. Earlier studies confirm that the user’s family,
friends, peers, and social groups significantly influence the user's intention to adopt to Mobile
wallet. Nidhi Singh, Neena Sinha, Francisco J. Liebana- Cabanillas [9] study also substantiates
this claim. Also, they added that the influence of such individuals has a greater reputation, and
word-of-mouth recommendations inspire or discourage users from trying out new technology.
In his study regarding m-banking, Amit Shankar [10] indicated that Security and privacy
are a major concern of consumers while using m-banking, banks can reduce this by introducing
and arranging different awareness programs. Though mobile banking is similar to Mobile wallet
with its functionality, Saurav Mittal and Vikas Kumar [11] in their study clarified that the Indian
mobile wallet users are quite sure about the security of their transactions and privacy of data
and also indicated that customers are excited to have more innovative solutions and use the
wallets for more number of transactions in future. The simplicity of any technology should also
be accompanied by a high level of security to ensure attracting a wider range of customers as
indicated by Aladeeddin [12].
Social influence refers to the degree to which opinions of family, relatives, and friends affect
the decision of the consumer to use a product or service [13]. Madan and Yadav [14] in their
study found that social influence is a significant factor in predicting behavioral intentions in
respect of mobile wallet adoption. They added that social influence is perceived to have more
credibility than any other source of information as it directly motivates users to adapt to the
technology. The belief of the people important to an individual which includes family, friends,
and reference groups which would affect their intention to accept or reject a certain idea as per
Gokhan Aydin in his study [15]
According to Dr.Poonam [16] In recent years, mobile wallet acceptance is very high due to
its simplicity and security features. Jay Trivedi revealed in his study [17] that social influence
is one of the important factors which influence consumer’s behavioral intentions regarding
mobile commerce. Dr. Anupam Saxena [18] in her study explained the importance of security
aspects in accepting mobile payments among its users.

3. PROBLEM STATEMENT
User-perceived trust in the mobile wallet is very critical in the long run for its sustainability.
For which users, should have confidence that the technology is more secured and protected.
Also, it is important to know whether the recent rise in adoption is only a temporary
arrangement to have contactless transactions or people slowly trusting and seeing the mobile
wallet as a reliable option for transactions. While steps are being taken by Mobile wallet
companies to ensure safer transactions, we aren’t sure whether the customers are considering
this while transacting through mobile wallets. In response to this problem, this study proposes
to investigate the users’ perceived trust towards Mobile Wallet concerning its security aspects.

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 A Study on User Perceived Trust in Mobile Wallet

4. RESEARCH OBJECTIVES
• To analyze the importance of trust in accepting Mobile wallets among its users.
• To determine whether any difference exists within the demographic groups (Gender,
Age & Education) related to trust in accepting Mobile wallet.
• To identify the major factors influencing the trust of users along with their significance.

5. RESEARCH METHODOLOGY
Being descriptive research, the Purposive sampling technique was used to collect the data from
the respondents. The selected respondents were the ones who were using Mobile wallet services
on their mobile phones. The sample size for the study was 147 respondents. Data was collected
through an online survey, email survey, and personal interview. Statistical tools of SPSS and
MS Excel were used to analyze the data.

6. ANALYSIS AND DISCUSSION

6.1 Frequencies Test
The dependent variable “I feel Mobile wallet is more secured and Trusted” has a median value
of 4 which indicates the importance of trust in acceptance of mobile wallets

Table 1 Frequencies Test

Valid 147
N
Missing 0
Mean 3.76
Median 4.00
Mode 4a
Sum 553

6.2 Hypotheses Analysis

The following hypotheses tests have been undertaken to find out whether there is any difference
exist within the demographic variable groups (Gender, Age, Education) in relation to the
dependent variable (SE1). Each demographic variable has been taken separately and the
difference among the group is analyzed in relation to the testing variable (SE1).
H1: There is no significant difference within respondent’s gender group in relation to the
trust of using Mobile wallet
H2: There is no significant difference within respondent’s age group in relation to the trust
of using a mobile wallet
H3: There is no significant difference within the respondent’s education group in relation
to the trust of using a mobile wallet
Hypotheses Test Results.
The Testing variable for all the Hypothesis Tests is “I feel Mobile wallet is more secured
and Trusted” (SE1)

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 Arun Prasad G.S and Arivazhagan R

Table 2 Hypotheses Test

Test Type Grouping Groups N Mean Sum of
Variable Rank Ranks
Two – Independent – Sample Test Male 87 71.64 6233.00
(Mann Whitney Test) Gender 77.42 4645.00
Female 60
Tests for several Independent samples 41 76.34
Test 15 – 24 77.05
73
(Kruskal - Wallis Test) 25 – 39 62.07
Age 27
40 – 55> 55 74.50
6

Tests for several Independent samples Higher Sec. 4 82.50

Test Graduate 94 72.83
(Kruskal - Wallis Test) Education Post 30 78.27
Graduate 19 71.26
M.Phil/Ph.D
Interpretation
The following hypotheses have proved our assumptions right and confirmed that there is no
significant difference within the demographic group variables (Gender, Age, Education) in
relation to the testing variable “I feel Mobile wallet is more secured and Trusted “ (SE1).

Table 3 Test Statistics

Test Type Group Variable - Group Variable – Group Variable -
Gender (H1) Age (H2) Education (H3)
Mann-Whitney U 2405.000
Wilcoxon W 6233.000
Z -.841
Asymp. Sig. (2-tailed) .400
Kruskal Wallis Test 2.838 .661
Chi-Square
3 3
df .417 .882
Asymp. Sig.

.400 > 0.05 .417 > 0.05 .882 > 0.05

Hypothesis Results (H0 is not rejected) (H0 is not rejected)
(H0 is not rejected)
Based on the results, H0 is not rejected in all hypotheses, and with this, we can conclude
there is no significant difference within each demographic variable group in relation to trust.

6.3 Factor Analysis

Table 4 KMO and Bartlett's Test
Parameters Values
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .921
Approx. Chi-Square 1351.575
Bartlett's Test of Sphericity df 66
Sig. .000

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 A Study on User Perceived Trust in Mobile Wallet

Table 5 Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Rotation Sums of Squared
Squared Loadings Loadings
Total % of Cumulative Total % of Cumulative Total % of Cumulative
Variance % Variance % Variance %
1 7.355 61.292 61.292 7.355 61.292 61.292 4.541 37.843 37.843
2 1.110 9.248 70.540 1.110 9.248 70.540 3.924 32.697 70.540
3 .758 6.313 76.853
Factor analysis was carried out to minimize the number of variables into few factors. KMO
and Bartlett’s Test validated the sampling adequacy and significance of variables. With a KMO
Value of 0.921, Sampling adequacy was justified with 92%. Since the significant value is
0.000, we may confirm that the variables taken for this analysis were significant. (P<0.05). The
Number of reduced factors was identified by using Eigenvalues one and above.

Table 6 Rotated Component Matrix a

Component
1 2
I feel Mobile wallet is more secured and trusted. .712
Have not heard any security issues related to mobile wallet .730
I feel my mobile wallet is more secured than my physical wallet .723
Technology is very reliable and I am confident of making payments anytime .807
Even if I lose my phone, I know my mobile wallet has security settings that ensure only
.806
I can access it
I feel every UPI transaction is secured with OTP and other security features .758
I know the encrypted payment codes are used for secured payment communication .726
My friends and relatives are using a mobile wallet. .794
Most of my friends and relatives are happy with the mobile wallet .826
I have recommended my friends and relatives to install a Mobile wallet .799
I encouraged others to use Mobile wallet whenever there is an opportunity to use .750
I have been encouraged by friends to use the mobile wallet .711
The Total variance table shows that all the variables were reduced to two factors. These two
factors were explained around 71% of the variance. The number of variables in each factor was
identified by using factor loadings of 0.5 and above. With this condition, the first factor includes
all variables which come under security, and the second factor consists of all variables which
come under social influence. Therefore, the names of the factor were retained as the names of
the construct, and the result justified the construct validity of security and social influence.

6.4 Regression Analysis Output

Regression analysis was carried out to identify the influence and importance of significant
variables. Security and trust on “ I feel Mobile wallet is more secured and trusted” was taken
as a dependent variable. Security and social influence-related items were taken as the
independent variable. Model summary of regression analysis disclosed the R Square value of
0.682 which means 68% of variance explained by all 11 independent variables and the ANOVA

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 Arun Prasad G.S and Arivazhagan R

table of regression analysis shows a significant value of 0.000. This explains all independent
variables were significant to carry out regression analysis.
The coefficient table of regression analysis reveals five different independent variables as
significant variables. (P<0.05), They are SE2: Have not heard any security issues related to a
mobile wallet, SE4: Technology is very reliable and I am confident of making payments
anytime, SI1: My friends and relatives are using a mobile wallet, SI2: Most of my friends and
relatives are happy with the mobile wallet and SI4: I encouraged others to use Mobile wallet
whenever there is an opportunity to use

Table 7 Model Summary

Model Summary ANOVA
Model R R Adjusted Std. Error of F Sig.
Square R Square the Estimate
1 .826a .682 .656 .681 26.266 .000b

Table 8 Coefficients
Unstandardized Standardize t Sig.
Coefficients d
Coefficients
B Std. Beta
Error
(Constant) -.050 .251 -.201 .841
Have not heard any security issues related to mobile wallet .181 .064 .184 2.813 .006
I feel my mobile wallet is more secured than my physical .082 .077 .088 1.072 .286
wallet
Technology is very reliable and I am confident of making .430 .096 .413 4.481 .000
payments anytime
Even if I lose my phone, I know my mobile wallet has
-.046 .082 -.049 -.563 .574
security settings that ensure only I can access it
I feel every UPI transaction is secured with OTP and other
.108 .088 .106 1.226 .222
security features
I know the encrypted payment codes are used for secured
.093 .092 .086 1.016 .311
payment communication
My friends and relatives are using a mobile wallet. .195 .091 .182 2.146 .034
Most of my friends and relatives are happy with the mobile
.244 .128 .256 1.912 .058
wallet
I have recommended my friends and relatives to install a
.068 .080 .075 .856 .393
Mobile wallet
I encouraged others to use Mobile wallet whenever there is
.261 .137 .270 1.908 .059
an opportunity to use
I have been encouraged by friends to use the mobile wallet .020 .071 .021 .290 .773
Unstandardized coefficients are used to identify the influence of each independent variable
on the dependent variable. Data shows one unit of increase in SE2 will influence 0.181 units
of trust on Mobile wallets and also one unit of increase in SE4 will influence 0.430 units of
trust on the mobile wallet. Also, one unit of increase in SI1, SI2, and SI4 will influence 0.195,
0.244, and 0.261 respectively of trust on the mobile wallet.
Standardized coefficients are used to identify the importance of variables. As per the results
of regression analysis, technology is playing a significant role with 0.413 followed by referrals
with a value of 0.270.

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 A Study on User Perceived Trust in Mobile Wallet

7. RESULTS AND DISCUSSION

Out of 147 respondents, 59% of responses are from males and 41% are from females. In age,
28% belongs to Generation Z (15-24), 50% of Generation Y (25 to 39), 18% of Generation X
(40 to 55) and above 55 Years constitute the remaining 4%. Frequency analysis has given a
basic understanding of the demography profile of the respondents. The dependent variable “I
feel Mobile wallet is more secured and Trusted” has a median value of 4 which indicates the
importance of trust in acceptance. Mann Whitney Test and Kruskal - Wallis test were used to
test the hypothesis. These tests resulted that, there is no significant difference within the
demographic group variables (Gender, Age, Education) to the testing variable “I feel Mobile
wallet is more secured and Trusted“ (SE1). Therefore, H0 is not rejected in all hypotheses,
and with this, we can conclude there is no significant difference within each demographic
variable group in relation to trust.
Factor analysis was carried out to minimize the number of variables into few factors. KMO
and Bartlett’s Test validated the sampling adequacy and significance of variables. Finally, all
the variables were reduced into two factors, fortunately, these two factors were the same as
research constructs such as security and social influence. Hence this analysis also justified the
construct validity. The reliability of these two factors was tested and which yields the results as
both the factors were very reliable.
Regression analysis was performed for identifying significant variables and their influence
on the trust factor. This analysis resulted that, around 68% of variance explained by all 11
independent variables and all these variables were significant to perform regression analysis.
Finally, regression analysis reveals five different independent variables as significant variables
(P<0.05). They are SE2: Have not heard any security issues related to the mobile wallet; SE4:
Technology is very reliable and I am confident of making payments anytime; SI1: My friends
and relatives are using a mobile wallet; SI2: Most of my friends and relatives are happy with
the mobile wallet and SI4: I encouraged others to use Mobile wallet whenever there is an
opportunity to use. Out of these significant variables technology (SE4) plays a vital role
followed by referrals (SI4).

8. CONCLUSIONS
Digital Payments are gradually becoming more popular among users. While there are various
reasons for its acceptance, this study emphasizes the importance of Trust in accepting the
mobile wallet in specific. The findings of this study indicate that trust is common among all its
users regardless of demographic factors. Trust levels are similar in groups of gender, age, and
education, and no significant difference was found. The dependent variable “I feel Mobile
wallet is more secured and Trusted” has a median value of 4 which indicates the importance of
trust in acceptance of mobile wallets. Technology is the major contributor to the trust factor
among the respondents. It also indicates that the trust levels would certainly go up if the product
is referred by the reference groups. We can also assume that the mobile wallet companies have
done a decent job in disseminating awareness on security advances to enhance the trust of users.
This trust in security has also led to referrals with confident users recommending mobile wallets
to their social groups.

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 Arun Prasad G.S and Arivazhagan R

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