International Journal of Bank Marketing

The effect of perceived security and grievance redressal on continuance intention

to use M-wallets in a developing country
Anup Kumar, Amit Adlakaha, Kampan Mukherjee,
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Anup Kumar, Amit Adlakaha, Kampan Mukherjee, (2018) "The effect of perceived security and
grievance redressal on continuance intention to use M-wallets in a developing country", International
Journal of Bank Marketing, https://doi.org/10.1108/IJBM-04-2017-0077
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Perceived
The effect of perceived security security and
and grievance redressal on grievance
redressal
continuance intention to use
M-wallets in a developing country
Anup Kumar Received 28 April 2017
Revised 3 October 2017
Indian Institute of Management Jammu, Jammu, India Accepted 17 October 2017

Amit Adlakaha
IUU Dehradun, Dehradun, India, and
Kampan Mukherjee
Indian Institute of Management Kashipur, Kashipur, India
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Abstract
Purpose – Many developing countries, including India, are committed to curbing black money from the
economy. Therefore, these countries are focusing on a transparent online transaction facility. M-wallets are
one online option facilitated by various companies using a mobile application. The purpose of this paper is to
investigate the impact of perceived usefulness, perceived security, perceived ease of use, trust, grievance
redressal and satisfaction on young users’ intention to continually use M-wallet in India.
Design/methodology/approach – A research framework based on the expectation–confirmation theory
has been formulated and tested empirically using data from M-wallets young users in India using structural
equation modeling.
Findings – The analysis reveals that perceived usefulness and perceived ease of use significantly affect
user satisfaction and intention to continually use M-wallets. The effect of perceived security on user
satisfaction is significant, and grievance redressal mediates the effect of perceived security on intention to
continually use M-wallets.
Practical implications – The outcome of the research will help M-wallet service providers and policy
makers in planning the service and increasing customer’ continuance intention.
Originality/value – The uniqueness of this research is that it adds two important constructs for mobile
payment systems (grievance redressal and perceived security) that were missing in the earlier model
proposed by Zhou (2013). The addition of the two constructs helped in formulating a better model.
Keywords Factor analysis, Consumer attitudes, Customer retention, Emerging markets
Paper type Research paper

1. Introduction
Penetration of mobile internet has significantly increased due to the liberalization of
the internet in Asia, specifically in India and China. There are many reports that indicate the
exponential growth achieved by smart phone companies in India. Recently, Reliance Jio has
launched a low-cost data network facility in Indian market that has created a ripple effect
among mobile data service (MDS) providers and led to a costly war in this segment
(Table VII, World Bank development data base). The penetration and use of the mobile data
are expected to increase manifolds in days to come. With this exponential increase in the use
of mobile data, it is expected that M-transaction is the future of the e-business in India and
China. This research study, therefore, aims to investigate the effect of young consumers’
perception toward the continuation of the M-wallet services. The current study is the
extension of expectation–confirmation theory (ECT) model.
The last decade has witnessed a significant increase in empirical research on the use of International Journal of Bank
Marketing
Internet of Things. The research on the use of innovative technologies are mainly based on © Emerald Publishing Limited
0265-2323
innovation diffusion theory (IDT) (Rogers, 1995, 2002), technology acceptance model (TAM) DOI 10.1108/IJBM-04-2017-0077
 IJBM (Davis et al., 1989) and the theory of planned behavior (TPB) (Ajzen, 1991), and have
identified the factors that stimulate users to accept a new Internet of Things using TPB. The
use of information systems (IS) and its continuation is studied by Bhattacherjee (2001b),
which proposed the ECT, an extension of the Technology Adaptation Model (TAM).
M-wallet is a part of MDS which is defined as “wireless access to digitalized contents on the
internet via mobile devices” (Kim et al., 2009). MDS offers various services, namely,
information and communication apps, spatial information apps, financial apps,
entertainment services, m-government apps and much more. M-wallet is a service, which
facilitates fund transfer or purchasing activity using MDS. Mobile payment is one of the
most transparent and frequent payment methods in developed countries. A novel research
on the continuation of mobile payment in China was carried out by Zhou (2013), and the
outcome of the research was that “service providers need to offer quality system,
information, and services to facilitate users’ continuance usage of the mobile payment
services”. M-wallet is a type of mobile payment system which is gaining importance in
developing country, like India. As the mobile payment market is increasing and further
expected to increase exponentially in India, it is imperative to study the concerns of Indian
consumers for the benefit of M-wallet service providers in India. Zhou has identified a few
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factors, like quality of service and system, which affect the continuation of mobile payment
service. Many research studies in this area, however, have not adequately covered
important factors like “perceived security” and “grievance management system” for failed
transactions which are likely to affect mobile payments and M-wallet services. An effort has
been made in this study to address the above gap and to investigate the association of
perceived security and grievance redressal toward the continuation of
M-wallet services in post-adoption environment in India. The objective of this research is
to investigate the factors that affect M-wallet continuation using an extension of the ECT
model with the addition of new construct “Perceived security” and “Grievance redressal” as
the mediator variables.
This study has been conducted in a systematic manner. Section 3 presents an exhaustive
review of literature. Section 4 contains the framework of the proposed model and
hypothesis. Section 5 presents the methodology used in the study, along with data analysis.
Section 6 is devoted to results and discussion. Section 7 presents the managerial
implications. Section 8 contains the concluding remarks, along with scope for
future research.

2. The theory behind research framework

This study is based on the theoretical foundation of the expectation-confirmation model
(ECM) (Susanto et al., 2016). ECM states that the expectations and user experiences, coupled
with perceived performance, lead to post-purchase satisfaction of a service. The macro
variables in ECM are expectations, performance, disconfirmation and satisfaction.
An expectation shows anticipated behavior. They are predictive, indicating perceived
product attributes at some point in the future. Expectations serve as the comparison standard
in ECM—what consumers use to evaluate performance and form a disconfirmation judgment.
ECM has been extensively applied to investigate post-usage behavior of a consumer
(Bhattacherjee, 2001b). Oliver has opined that ECT is extremely useful in the marketing of
high-tech products and services (Oliver and Westbrook, 1993). It is imperative for business
organizations to understand the factors of user satisfaction. User satisfaction has been defined
as “overall evaluation of technology, which reflects an emotion-based response about the
target technology” (Lam et al., 2004). Empirical evidence on MDS continuance supports that
user satisfaction is a major factor of MDS continuance intention (Hong et al., 2006; Kim et al.,
2009). In similar line to ECT, it is expected that M-wallet continuance intention is positively
associated with user satisfaction with M-wallet usage.
 ECM has been derived from two basic theories of psychology: TPB and TAM (Figure 1). Perceived
The six variants of the ECM have been deeply explored and widely discussed in a variety of security and
the applications. The last decade has witnessed a significant increase in empirical research grievance
studies pertaining to the adoption issues of technology-based products and services.
The research studies regarding the use of innovative technologies are mainly based on redressal
TAM (Davis et al., 1989), the TPB (Ajzen, 1991) and the IDT (Rogers, 1995, 2002). The idea
behind selection and extension of the ECM model for this research is mainly due to its
capability to explore pre- and post-experience of the product use, which leads to an increase
in predictive power of the model.
The TPB was proposed by Icek Ajzen for predictive analysis of the theory of reasoned action
by including perceived behavioral control. It has been applied to studies on the relations among
beliefs, attitudes, behavioral intentions and behaviors in various fields such as advertising,
public relations, advertising campaigns and healthcare. The TAM is an IS theory that explains
how users come to accept and use technology. The model suggests that when users are
presented with new technology, some factors influence their decision about how and when they
will use it (Davis et al., 1989). The TAM has been continuously studied and expanded, the two
major upgrades being the TAM 2 and the Unified Theory of Acceptance and Use of Technology
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(UTAUT). A TAM 3 has also been proposed in the context of e-commerce with an inclusion of
the effects of trust and perceived risk of system use.
The use of IS and its continuation intention has been studied by Bhattacherjee (2001b), in
which he proposed the extension of the ECM to analyze technology adaptation and
continuance issues. Furthermore, UTAUT2 has been added to explore the moderation
effects of the demography of the respondent. The UTAUT2 model shows that the
demographic attributes have a positive moderation effect on the continuation of the product.
M-wallet can be considered as a part of MDS and has been defined as “wireless access to
digitalized contents on the internet via mobile devices” (Kim et al., 2009). MDS offers various
services, namely, information and communication apps, spatial information apps, financial
apps, entertainment services, m-government apps and much more. M-wallet is a service,
which facilitates fund transfer or purchasing activity using MDS. Mobile payment is one of
the most preferred and transparent payment methods in developed countries. A study on
the continuation of mobile payment in China was carried out by Zhou (2013), he stressed on
system quality-related issues to facilitate users’ continuance usage of the mobile payment
services. As the mobile-based transactions and transfer payment are anticipated to increase
exponentially in India shortly, it is imperative to study the issues affecting not only the
adoption but also the continual usage intentions of Indian consumers. Zhou (2013) has
reported factors, like quality of service and system, which affect the continuation of mobile
payment service. The authors of this paper did not find significant published literature that
has explored the factor concerned with security (may be called “perceived security”) and

Perceived
Usefulness
(U)
Attitude Behavioral
External Actual
Toward Intention to
Variables System Use
Using (A) Use (BI)
Perceived
Ease of Use Figure 1.
(E) Technology
acceptance model
(Version 1)
Source: Davis et al. (1989)
 IJBM grievance management system for failed and fraudulent transactions. This study is an
attempt to address the above gap while investigating the association of perceived risk and
grievance redressal. The objective of this study is to investigate the factors affecting
M-wallet continuation using an integration of the ECM model with TAM and TPB.
The effect of perceived risk and grievance redressal as the mediator variables has also been
investigated.

3. Review of literatures
The theories associated with post-adoption and pre-adoption of consumer behavior could be
differentiated by first-hand use of the technology and user expectations (Bhattacherjee,
2001a). As discussed in the Introduction section, the various theories and models used in
accessing the pre- and post- adoption of technology are TPB, TAM, IDT and ECT. The
post-adoption model (ECT) is the extension of the theory of TPB and TAM (Bhattacherjee,
2001b). ECT has been adopted and applied in a variety of situations, for example, Facebook.
Factors influencing intention to continually use social network site were analyzed by
Mouakket (2015). Consumer benefits have a positive role in the continuation of mobile
instant messaging. In continuation to the ECT, consumers benefit was added as a new
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construct to accentuate the ECT model (Oghuma et al., 2015, 2016). As our study focuses on
M-wallet continuation, therefore, it is important to discuss factors and constructs that have
been used by researchers to study the technology continuation.
The drivers of continuance intention of the mobile apps were analyzed using ECT
(Hsu and Lin, 2015; Ooi and Tan, 2016). ECT was used in explaining and predicting users’
continuance toward e-learning (Lee, 2010; Mohammadi, 2015a, b). ECT has been used to
predict the continuation of e-books by students, and nurses’ confirmed expectations
regarding health IT (Stone and Baker-Eveleth, 2013; Zadvinskis et al., 2014). The factors
that affect continuance intention for the usage of online banking and various other online
brokerage services have been analyzed by Rodgers. The factors were identified and were
found to be in unison with the ECT model (Vatanasombut et al., 2008). Applications and
nuances of the benefits of WhatsApp and SMS were established and discussed using
ECT (Church and De Oliveira, 2013). While discussing the effect of perceived value, trust
and service quality on user satisfaction, Deng has identified the role of various factors
that affect satisfaction and loyalty (Deng et al., 2010; Lu et al., 2010; Zhou and Lu, 2011).
There is sufficient evidence available to prove the hypothesis “Satisfaction and
post-adoption expectation have a significant influence on the continuance intention”
(Hong et al., 2006; Thong et al., 2006). The effect of users’ roles (“technology user, service
consumer and network member”) on satisfaction and loyalty has been established
(Lin et al., 2015). Kim (2010), in his research paper, has discussed an integrated approach
to the ECM and TPB for MDS. A technology continuance theory has been proposed that
identifies the relationship among continuance intention, attitude and satisfaction
(Liao et al., 2009). It has been proved that satisfaction has a significant effect on IS
continuance (Limayem and Cheung, 2008). The quality of network also has a strong
relationship with the continuation of the interactive IT services (Bhattacherjee et al.,
2008; Lin and Bhattacherjee, 2008; Premkumar and Bhattacherjee, 2008). As this research
is positioning to include a new construct that relates to perceived risk, it is imperative to
understand the effect of risk on user satisfaction. The effect of perceived usefulness is
weaker than the one of perceived risk on user’s continuation due to moderation and
crossover effects (Chiu et al., 2007, 2009; Hsu and Chiu, 2004). Various social factors that affect
user’s satisfaction were discussed by establishing a relationship model (Premkumar and
Bhattacherjee, 2008). The ECT model was enhanced by adding various factors in
different demographic conditions (Chiu et al., 2007; Lin, 2011; Lin et al., 2011; Roca et al., 2006).
The ease of use has a significant role in the continuation of e-learning resources
 (Yen and Lu, 2008). A strong relationship amongst perceived net benefit, confirmation and Perceived
satisfaction has been established with a theoretical design of experiment over longitudinal security and
data (Zhou, 2011). The relationship between trust and loyalty with user’s satisfaction is grievance
modeled with a good model fit (Zhao and Lu, 2012). Based on the review of literature, seven
constructs were identified for the current research which are tabulated in Table I. Amongst redressal
these seven constructs, five constructs have been adopted from previous literature while two
new constructs have been derived from the Indian context.

4. Framework of the proposed model and hypotheses

4.1 Expectation–confirmation theory
ECT has been extensively applied to investigate post-usage behavior of a consumer
(Bhattacherjee, 2001b). Oliver has identified that ECT is extremely useful in the marketing
of high-tech products and services (Oliver and Westbrook, 1993). The start-up organizations
have to understand the factors of user satisfaction. User satisfaction is defined as “overall
evaluation of technology, which reflects an emotion-based response about the target
technology” (Lam et al., 2004). Empirical evidence on MDS continuance supports that user
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satisfaction is a major factor of MDS continuance intention (Hong et al., 2006; Kim et al.,
2009). In line with ECT theory, it is expected that M-wallet continuance intention is
positively associated with user satisfaction with regard to M-wallet usage.
All the identified factors for this research study that affect user continuation intention to
use M-wallet will be explained in the coming sub-sections.
4.1.1 Satisfaction. Satisfaction reflects the overall feeling experienced while using a
service or product (Chow and Shi, 2014). If users are not satisfied with the service or product,
they may discontinue their usage. Studies have revealed that satisfaction is a key factor of
continuance behavior (Hsu et al., 2016, 2015; Mouakket, 2015; Thong et al., 2006). Thus, we
proposed the following hypothesis:
H1. Consumer satisfaction with M-wallet usage positively affects M-wallet continuance
intention.
In unison with the ECT, user satisfaction is dependent on two main determinants:
post-usage expectations about a technology and deviation between pre-usage expectations,
and actual performance of the technology (Bhattacherjee, 2001b). The cause of this
relationship is based on cognitive theory (Festinger, 1957). Users accumulate preliminary
expectations about M-wallet before using it. After post-usage of M-wallet, they refresh their
expectations of M-wallet performance based on their usage experiences. When M-wallet
performance is better than their pre-expectations, their post-usage expectations are
acknowledged; otherwise, their post-usage expectations are not confirmed. The degree of
confirmation and post-adoption experiences affect the intensity of consumer satisfaction
about the M-wallet.

S. No. Construct Adapted from Questionnaire items

1 Perceived usefulness (PU) Davis (1989) PU1, PU2, PU3, PU4, PU5
2 Perceived ease of use (PE) Davis (1989) PE1, PE2, PE3, PE4
3 Perceived Security(PS) Self-derived PS1, PS2, PS3
4 Grievance redressal (GR) Self-derived GR1, GR2, GR3, GR4
5 Trust (T) Zhou (2013) T1, T2, T3 Table I.
6 Satisfaction (SAT) Oghuma et al. (2015, 2016), SAT1, SAT2, SAT3 Constructs and
Bhattacherjee (2001a, b) observed items for
7 Continuance Intension (CI) Bhattacherjee (2001a, b) CI1, CI2, CI3 the research
 IJBM 4.1.2 Trust. Trust may be defined as the willingness to be loyal to a service provider based
on positive expectation toward the service provider’s future behavior (Zhou, 2013). Trust
represents the three dimensions of belief: ability, integrity and benevolence
(Susanto et al., 2016; Zhou, 2011). There is a clear difference between several types of
trust: affect-based and cognition-based, interpersonal and identity-based, ability-based,
competency-based, benevolence-based and integrity-based, knowledge-based and
institutional-based. The extent of research has proven that trust is an important
determinant of the continuance of a service or product (Gao et al., 2015; Hsu et al., 2015;
Thominathan and Ramayah, 2015). Here, the trust measures integrity and ability. Hence, the
understated hypothesis was developed for testing this aspect:
H2. Trust with M-wallet service provider positively affects M-wallet continuance
intention.
4.1.3 Grievance redressal. Grievance redressal is a management system established by
some legal authority of the land to address the disputes between a consumer and a service
provider. This type of management system is very effective in India and prints a
positive impact on consumer’s usage of a service (Rana, Dwivedi, Williams and Lal, 2015;
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Rana, Dwivedi, Williams and Piercy, 2015). If a consumer feels that it is safe and transparent
to use a particular service he or she may continue with the service. Thus, we propose the
following hypothesis:
H3. Grievance redressal has a positive impact on consumer’s usage of a service.
4.1.4 Relationship among grievance redressal, trust and satisfaction. Grievance redressal
provides a legal and social guarantee that users have the authority to deal with fraud service
and it creates a positive trust. Trust provides a “subjective guarantee that users receive a
quality service in future, as they believe that M-wallet service providers have the ability,
integrity, and benevolence to provide quality service to them” (Zhou, 2013). Further, trust
also affects user satisfaction: if a user has trust in an M-wallet service provider, users will be
satisfied. Thus, we propose the following hypotheses:
H4. Grievance redressal positively affects trust.
H5. Trust positively affects user satisfaction with M-wallet usage.
4.1.5 Perceived usefulness. Perceived usefulness may be defined as users’ perception of the
expected benefit of M-wallet use, extracted from TAM model (Bhattacherjee, 2001b;
Davis, 1989). Post-consumption expectorations are reflected as ex-post perceived
usefulness in proposed M-wallet continuance model. Thus, the following hypotheses
have been tested:
H6a. Perceived usefulness of M-wallet use is positively associated with satisfaction.
H6b. Perceived usefulness of M-wallet use is positively associated with trust.
H6c. Perceived usefulness of M-wallet use is positively associated with grievance
redressal.
4.1.6 Perceived ease of use. Any product of service has to be user-friendly. Perceived ease of
use reflects the user-friendly aspect of product and service (Bhattacherjee, 2001a).
A consumer may have developed such perceptions about a service. Therefore, the following
hypotheses must be tested:
H7a. Perceived ease of use of M-wallet is positively associated with satisfaction.
H7b. Perceived ease of use of M-wallet is positively associated with trust.
 H7c. Perceived ease of use of M-wallet is positively associated with Grievance Perceived
redressal. security and
4.1.7 Perceived security. Dealing with financial transaction services security is always a grievance
prime concern for users. Perceived security may be defined as users’ perception of the redressal
expected security threats of M-wallet use (Belanche-Gracia et al., 2015; Suh et al., 2015; Yang
et al., 2015). Therefore, the following hypotheses must be tested:
H8a. Perceived security positively affects user satisfaction with M-wallet usage.
H8b. Perceived security positively affects user trust with M-wallet service provider.
H8c. Perceived security positively affects user grievance redressal.
The proposed research model has been presented in Figure 2.

5. Methodology and data analysis

A standard operative procedure has been followed to identify the latent construct using
exploratory factor analysis (EFA) (Table AII). After knowing the preliminary information
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and factor loadings with eigenvalues greater than 1 and more than 0.6-factor loadings, the
items have been recognized and assigned to a latent factor. In addition, confirmatory factor
analysis (CFA) has been performed to reconfirm the factor loadings and to modify the fit
indices of the research framework. Further structural equation modeling (SEM) has been
used to carry out path analysis and to confirm the statistical relationship among
latent constructs. A flow diagram is shown in Figure 3 representing the methodology
adopted for the research.

5.1 Instrument design for measurement

The majority of the constructs have been adopted from the relevant literature except for
perceived security and grievance redressal, which are self-derived. The items of ECT were
measured as per the recommendation of Bhattacherjee (2001b). Two new latent construct
perceived security and grievance redressal have been derived especially for M-wallet which
affect user continuation and measured through self-derived scale with more than 8.0
reliability. The questionnaire items are shown in Table AI.

5.2 Data collection

A pilot study was conducted for the testing of consistency and reliability of the initial items in
the questionnaire. In total, 30 questionnaires were distributed among 30 research scholars. The
pilot study improved the readability and consistency of the items. The modified items were
distributed to MBA students. Data were collected from the students studying MBA courses

Perceived H6a-H6c Grievance

Usefulness Redresses

H3
H4
Perceived Ease of Continuance
Trust
Use Intention
H7a-H7c H2

H5

Perceived Security Satisfaction H1 Figure 2.

H8a-H8c
Research model
 IJBM Formation Theoretical Framework and
Hypothesis

Instrument Design for Measurement Model

Pilot Study and Data Collection and Data

Preparation

Exploratory Factor Analysis

Confirmatory Factor Analysis

Figure 3.
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A flow diagram for

methodology adopted Structural Equation Modelling/Path Analysis

across the Indian states using self-administered questionnaires items. Convenience sampling
was used for retrieving the responses. An online questionnaire was prepared for data collection.
The online Google form was sent to more than 400 MBA students. Even if the findings of
convenience sampling method may constrain the generalizability of the study, researchers
(Cheah and Phau, 2011; DelVecchio, 2000; Roberts and DelVecchio, 2000) have argued that the
sample taken from 18–30 years young age group sample is reliable in conducting studies
related to prediction of continuation of a technology or related to predicting the behavioral
change. In the end, 265 responses were received with a 66 percent response rate. The region for
high response rate was perhaps that the questionnaire was administered in the known group of
students. Group administered questionnaires facilitate a high rate of responses (Evans and
Rooney, 2013). The data had been pre-processed using removal of incomplete responses and
outliers; finally, 250 valid responses were considered during the research study. The sample
size was factored out using standards suggested by Little and Rubin (1989). Little and Rubin
have factored out that there should be a minimum of ten cases and five responses per
parameter/items. Therefore, a minimum of 170 samples was required for present research as
the research has 34 items. Therefore, the final sample of 250 considered for the present research
study was sufficient. The demographic information about the respondents is as follows: out of
the total 250 respondents, 189 (75 percent) were males, and 61 (25 percent) were females. Most
of the respondents (91 percent) were in the age group of 18–30 years, 65 percent were graduates
while 35 percent were post-graduates. It was also observed that 15.7 percent respondents
earned up to INR3 Lakh per annum, 18.9 percent earned in the region of INR3-6 Lakh per
annum followed by 22 percent (INR6-9 Lakh p.a), 17.7 percent (INR9-12 Lakh p.a) while
25.6 percent earned more than 12 Lakh p.a. The demographic details of the respondents are
presented in Table II. The World Bank development database 2017 (Table VII) has revealed
that the majority of the Asian population is in the age group 15-60 (64.5 percent). Therefore, the
sample that we have taken in the age group (20-35) is generous in that sense.

5.3 Data preparation and modeling

Extreme care has been taken in the data preparation and collection stage. Outlier cases have
been removed using the process discussed by Yadav and Pathak (2016). Further, all prior
 Region (India)
Perceived
Gender Education Age group (years) Income group in (Lacks RS) East North South West security and
grievance
Female Graduate 0-20 9–12 1 1
21-30 0–3 3 1 redressal
3–6 2 1 2
6–9 4 5 1
9–12 3 1 1
12 above 1 9 3
Post graduate 21-30 0–3 1
3–6 1
9–12 2
31-40 6–9 1 1
Over 50 12 above 1
Undergraduate 0-20 9–12 1
12 above 1
21-30 0–3 3
3–6 3
6–9 1
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9–12 1 1
12 above 2 3 1
Male Graduate 0-20 0–3 1
21-30 1
0–3 3 5 7 4
3–6 7 9 2 2
6–9 10 5 3 7
9–12 4 13 3 5
12 above 3 15 6 7
31-40 12 above 1
High school 0-20 0–3 1
Post graduate 21-30 0–3 2 1 2
3–6 2 5
6–9 1 5 1
9–12 2 2
12 above 1 4 3
Undergraduate 21-30 0–3 2 2 2
3–6 2 8 1
6–9 2 4 4 1
9–12 2 1 1 Table II.
12 above 2 1 1 Demographics details
Total (%) 19 37.8 25.6 17.3 of sample

assumptions have been checked. Lavaan and Psych package in R were used for EFA and
SEM (Gadermann et al., 2012; Rosseel, 2012). The study followed the two-step approach, as
suggested by Anderson and Gerbing (1988). The first step is measurement model fit
followed by the second step to construct the structural model and path analysis. Covariance-
based structural equation modeling has been used for data analysis. Initially, EFA is done
for adequacy and elimination of lower loading factors. A parallel analysis (see Figure 4) was
conducted to test the sufficient condition for the number of factors, which reduced the
number of items from 34 to 25 (Table II and Table AII), and the number of factors to seven.
Table II lists the standardized item loadings, the average variance extracted (AVE), the
composite reliability (CR) and Cronbach’s α values. Furthermore, path analysis was done to
identify the relationship between dependent and independent constructs. The expectation
was measured using formative SEM, perceived usefulness, perceived ease of use and
perceived security as the causal variables and latent variables for the construct
 IJBM expectations. The expectation construct was a latent variable in ECT model, but in this
research, formative SEM measured this construct because expectations are the function of
perceived usefulness, perceived ease of use and perceived net benefit. In the end, the fit
indices of ECT model and proposed model have been compared.

6. Results and discussion

6.1 Measurement model: reliability and validity
Initially, EFA has been applied to the observed items with an aim to access the information
about latent factors. From the initial EFA findings, it was found that the EFA fit indices
represent sufficient factor loadings. A theoretical research framework was developed using
this information and the seven latent factors (Figure 5). Using this information, a theoretical
research framework has been developed (as shown in Figure 2). With the help of EFA, a
CFA was performed to reconfirm the adequacy and fitness of the measured latent variables.
The consistency and reliability of the measurement scale have been checked using
Cronbach’s α (Hair, Anderson, Tatham and Black, 1998; Hair, Anderson, Tatham and
William, 1998). The study shows sufficient reliability, as value ranges from 0.80 to 0.83.
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Construct reliability has been measured using CR. The values range from 0.80 to 0.854,
which show that all values exceed the recommended level of 0.6 (Bagozzi and Yi, 1988).
Convergent validity and discriminant validity have also been investigated. Convergent
validity was measured using factor loading, AVE. The value of factor loadings of all items

Scree plot
Eigenvalues of factors

8
PC
and components

6 FA
4
2
0
Figure 4. 0 5 10 15 20 25 30 35
Eigenvalues of EFA
Factor or component number

Parallel Analysis Scree Plots

8
PC Actual Data
Eigenvalues of principal components

PC Simulated Data
6
PC Resampled Data
and factor analysis

FA Actual Data
4
FA Simulated Data

FA Resampled Data
2

Figure 5. 0
Parallel analysis
of the factors 0 5 10 15 20 25 30 35
Factor/Component Number
 was above the standard cut-off 0.6 (ranges from 0.63 to 0.84) as argued by Chin (1998) and Perceived
Chin and Todd (1995). security and
Discriminant validity was examined by comparing the square root of AVE and the factor grievance
correlation coefficients, as listed in Table III. A factor correlation less than 0.8 indicates a
good measure for discriminant validity. Discriminant validity has been accentuated by the redressal
fact that the square root of AVE of each construct was found to be higher than its
correlation value (Table IV ) (Chin and Todd, 1995). Eventually, after investigating the
convergent and discriminant validity and reliability, the theoretically proposed model
enjoys a good model fit.

6.2 Goodness of fit indices for the proposed model framework

In continuation of the measurement model, it was identified that the proposed theoretical
model met the standards of reliability and validity. Furthermore, the measures for the

Latent factors Observed items Standardized items loading CR AVE α value

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Perceived usefulness PU1 0.67 0.82 0.54 0.81

PU2 0.64
PU3 0.82
PU4 0.74
PU5 0.78
Perceived ease of use PE1 0.79 0.83 0.56 0.82
PE2 0.84
PE3 0.87
PE4 0.78
Perceived security PS1 0.75 0.81 0.53 0.80
PS2 0.66
PS3 0.72
Grievance redressal GR1 0.68 0.82 0.52 0.81
GR2 0.63
GR3 0.76
Trust T1 0.78 0.81 0.65 0.80
T2 0.76
T3 0.82
Satisfaction SAT1 0.75 0.79 0.62 0.83
SAT2 0.76 Table III.
SAT3 0.84 Standardized item
Continuance intention CI1 0.82 0.83 0.61 0.82 loadings, AVE, CR
CI2 0.79 and α values:
CI3 0.73 reliability and validity

PU PE PS GR T SAT CI

PU 0.734
PE 0.578 0.748
PS 0.644 0.625 0.728
GR 0.68 0.628 0.682 0.721
T 0.465 0.594 0.56 0.545 0.806 Table IV.
SAT 0.495 0.349 0.409 0.511 0.508 0.787 Factor correlation
CI 0.479 0.489 0.528 0.579 0.643 0.633 0.781 coefficients and the
Note: Square root of AVE are shown in italic on diagonal square root of AVE
 IJBM goodness of fit measures were tested using structural analysis, where the goodness of fit
measures of proposed model also qualified as the cut-off (Table IV ). The model fit was better
than Zhou (2013) and results show that the proposed theoretical model has a good fit indices
( χ2 ¼ 3.134, df ¼ 3.000 χ2/df ¼ 1.0446, p-value ¼ 0.371, GFI ¼ 0.996, TLI ¼ 0.999, CFI ¼ 1.0,
IFI ¼ 1, RMSEA ¼ 0.013). The fit indices of the proposed model and model proposed by
Zhou (2013) and (Bhattacherjee, 2001a) were compared for their predictive power. The
results indicate that inclusion of grievance redressal and perceived security (see Figure 6)
have better predictive power for continuance intention (adjusted R2 ¼ 0.377), as compared to
the model proposed by Zhou (2013) (adjusted R2 ¼ 0.371). In addition, the fit measures of the
proposed framework have been better ( χ2/df ¼ 1.043, RMSEA ¼ 0.013) than the Zhou (2013)
( χ2/df ¼ 1.53, RMSEA ¼ 0.052). The results accentuated the addition of grievance redressal
as a mediator variable and perceived security in the ECT in the case of M-wallets. The
goodness of fit indices is mentioned in Table V. The proposed model fit indices are also
better than original ECT model proposed by Bhattacherjee (2001a).

6.3 Discussions
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The research objective discussed in introduction section was to investigate the effect of
perceived security and grievance redressal, along with perceived usefulness, perceived ease of
use and satisfaction on the continuance of M-wallet use in India. As shown in Figure 6, except
H6b and H8c, all of the other hypotheses are supported (Table VI). Perceived ease of use and
perceived security have significant effects on trust and satisfaction. Both perceived security
and perceived usefulness have a significant effect on grievance redressal and trust, but
perceived security does not affect satisfaction. Grievance redressal, trust and satisfaction
predict the continuance intention. Among the factors affecting trust and perceived ease of use

Perceived 0.342*** Grievance

Usefulness (PU) Redresses (GR)
ns 0.210***
0.271***
0.174*
0.233***
Perceived Ease of Continuance
Trust (T)
Use (PE) 0.342*** Intention (CI)
0.353***
0.115*
0.317*** 0.358***
0.347***
0.225**
Perceived
Figure 6. Satisfaction (SAT)
Security (PS) ns
Results estimated by
R (lavaan package)
Notes: ns, not significant. *p < 0.05; **p < 0.01; ***p < 0.001

Fit indices χ2/df GFI AGFI CFI NFI NNFI RMSEA

Recommended value o3 W0.90 W0.80 W 0.90 W0.90 W0.90 o0.08

Proposed model 1.0446 0.99 0.967 1 0.99 0.99 0.013
Integrated structural model of Zhou (2013) 1.53 0.86 0.829 0.96 0.91 0.96 0.052
ECT model by Bhattacherjee (2001a) 1.717 0.93 n/a 0.95 0.88 0.92 n/a
Table V. Notes: χ2/df, ratio between χ2 and degrees of freedom; GFI, goodness of fit index; AGFI, adjusted goodness of
Comparison of fit index; CFI, comparative fit index; NFI, normed fit index; NNFI, non-normed fit index; RMSEA, root mean
goodness of fit indices square error of approximation
 Hypothesis Estimated β p-value Remark
Perceived
security and
H6a 0.342 0.000 Significant Supported grievance
H6b 0.060 0.307 Not Significant Not supported
H6c 0.271 0.000 Significant Supported redressal
H7a 0.233 0.000 Significant Supported
H7b 0.342 0.053 Not Significant Not supported
H7c 0.115 0.039 Significant Supported
H8a 0.317 0.000 Significant Supported
H8b 0.225 0.000 Significant Supported
H8c −0.001 0.992 Not Significant Not supported
H4 0.174 0.000 Significant Supported
H5 0.358 0.000 Significant Supported
H3 0.210 0.000 Significant Supported
H2 0.353 0.000 Significant Supported Table VI.
H1 0.347 0.000 Significant Supported Test results

had the largest effect ( β ¼ 0.342). These results are consistent with Zhou (2013) and
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Bhattacherjee (2001b). The actual model (Output of R lava) is shown in Figure 7.

It is also evident from Figure 6 that grievance redressal, trust and satisfaction affect
M-wallet continuance intention positively. Among these characters, trust was found to have
the highest effect on M-wallet continuance intention ( β ¼ 0.353). The fit indices for the
proposed theoretical model shown in Table IV are better than the ECT model of
Bhattacherjee (2001b) and integrated model of Zhou (2013).

7. Managerial and theoretical implications

There are two perspectives to look at, in reference to, the implications of the outcomes of the
research. From a body of knowledge perspective, this research identifies the factors affecting
the continuation of M-wallet as noted earlier. The uniqueness of this research is that it adds
two important constructs for mobile payment systems (grievance redressal and perceived
security) that were missing in the earlier model of Zhou (2013). The earlier ECT models were
based on user’s personal expectations perspective but in this research study, system’s

1.00

PU
0.27
1.00
0.62 SAT 0.58
–0.15
PE
0.00
0.36 0.64
–0.05 0.34
0.62
0.35 0.34
0.26
T 0.23
0.23
PS
0.35 0.57
0.17
0.32 1.00
CI Figure 7.
0.21 Lavvan (R-Package)
0.43 GR Output of proposed
model fit
0.40
 IJBM perspective is also added to test the relationship between dependent and independent
variables. Users’ behaviors are not only influenced by perceived usefulness, which is an
extrinsic motivation that emphasizes the usage outcomes, but are also influenced by perceived
security and a proper grievance redressal mechanism, which is an intrinsic motivation that
emphasizes the usage of M-wallet. Grievance redressal and perceived security are the
important factors, which decide the use of any payment system. From an M-wallet service
provider’s perspective, this research shows that the service providers must include a
transparent grievance redressal mechanism with proper security measures.

8. Conclusion and scope for future research

According to the World Bank development data base, the penetration of internet and
moreover mobile phones have penetrated in far flanged interior areas of the continent and
now it is penetrating across the globe (Table VII). This widespread of the internet
and smartphones has led to the dramatic increase in the GDP in Asia, particularly in India
and China. Users’ retention and their continued support to use the service or product are the
cornerstone for the success of M-wallet service providers. As the penetration of smart
phones is increasing in India and the demand for mobile payment and mobile purchasing is
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increasing day by day, it is imperative for the organizations dealing in mobile payments to
formulate an effective strategy to retain and expand their consumer base.
Retaining users and facilitating their continuance usage are extremely important for
M-wallet service providers. Based on the ECT and information success model, this research
established a relationship amongst the factors affecting continuance intention of M-wallets
in India. The results indicate that perceived security affect the continuance intention
through grievance redressal, trust and satisfaction. The mediator variable grievance
redressal affects another mediator variable trust, which in turn affects satisfaction. The
results indicate that service providers need to deliver secure transactions with transparency
in services to facilitate users’ post-adoption usage of M-wallets. Although the sample size for
this research represents pan India, however, this research has the following limitations: as
the research study has been undertaken in India, there is a possibility that the results may
be valid only for India. The validity and applicability of this research in other parts of the
world may have to be investigated. Moreover, the use of M-wallet service in India, though
fast growing, is still in the nascent stages, so the applicability of the proposed model in the
other countries that have been using mobile payment systems long may have to be tested.
Apart from grievance redressal, trust and satisfaction, there may be other factors affecting
continuance and usage, such as flow system quality, information quality and switching
costs, etc. Future research studies may also take into account these important aspects.

Internet
usage (% Mobile phone
of usage (% of Population Population Population Population
Region GDP population) population) 0–14 (%) 15–64 (%) 65+ (%) total

Africa $24,043,291,890 0.1 0.3 41.20 55.30 3.50 17,665,922

Asia $384,191,357,442 0.2 0.5 29.10 64.50 6.30 108,212,254
Europe $356,620,100,193 0.5 0.9 17.40 67.80 14.70 16,701,733
Middle $116,859,936,442 0.2 0.7 30.70 65.60 3.70 14,852,352
East
Oceania $84,248,732,020 0.2 0.4 32.80 61.30 5.90% 2,265,298
Table VII. The $470,596,519,412 0.3 0.7 29.00 63.60 7.40 19,974,741
Penetration of internet Americas
and mobile phones Source: World Bank development database 2017 population in millions
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 Appendix 1 Perceived
security and
grievance
Construct and measuring items Source
redressal
Perceived usefulness
PU1: using M-wallet improves my performance in managing personal payments Bhattacherjee (2001a, b)
PU2: using M-wallet increases my shopping experience in managing payments
PU3: using M-wallets enhances my effectiveness in managing payments
PU4: M-wallet saves time in making payments
PU5: overall, M-Wallet is useful in managing payments
Perceived ease of use
PE1: M-wallet is easy to use Bhattacherjee (2001a)
PE2: I feel comfortable while using M-wallets
PE3: using M-wallet I can shop at any time
PE4: it is easy to use M-Wallet more frequently
Perceived security
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PS1: M-wallets is a secure method of payments Self-derived

PS2: use of M-wallet is safe and secure
PS3: M-wallets payments maintain privacy
Grievance redressal
GR1: there should be some authority to approach in the case of failed transactions Self-derived
GR2: there should be transparency in settling claims for failed transactions
GR3: legal disputes should be resolved in a time bound manner
Trust
T1: this service provider is trustworthy Zhou (2013), Zhou and
Lu (2011)
T2: this service provider keeps its promise
T3: this service provider keeps customers’ best interest in mind
Satisfaction
SAT1: I feel satisfied with M-wallet usage Bhattacherjee (2001a, b)
SAT2: I feel contented with M-wallet usage
SAT3: I feel happy using M-wallet service
Continuance intention
CI1: I intend to continue using M-wallet rather than discontinue its use Bhattacherjee (2001a, b) Table AI.
CI2: my intentions are to continue using M-wallet than using any alternative means Construct and
CI3: if I could, I would like to discontinue my use of M-wallet (reversed item) measuring items
 IJBM Appendix 2

Factor 1 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6 Factor 7

PU1 0.67 −0.03 0.16 −0.14 0.22 0.07 −0.02

PU2 0.64 −0.05 0.02 0.06 0.14 0.16 −0.08
PU3 0.82 −0.2 0.03 0.08 0.52 0.17 0.03
PU4 0.74 0.08 0.07 0 0.12 −0.11 0.05
PU5 0.78 −0.07 0.05 −0.1 0.12 −0.02 0.22
PE1 −0.18 0.79 0 −0.18 0.06 −0.03 0.75
PE2 −0.21 0.84 −0.01 0.05 −0.11 0.07 0.59
PE3 0.24 0.87 −0.04 −0.14 −0.23 0.04 −0.28
PE4 0.21 0.78 0.06 0.22 −0.02 0.07 −0.07
PS1 0.26 0.18 0.75 −0.11 −0.11 0.16 0.09
PS2 0.04 −0.01 0.66 0.01 0.28 −0.04 0.09
PS3 0.21 0.02 0.72 0.02 −0.03 0.17 −0.12
GR1 0.2 −0.08 −0.16 0.68 −0.05 0.01 0.04
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GR2 0.23 0.05 −0.06 0.63 −0.01 −0.11 0.08

GR3 0.12 0.03 0.08 0.76 −0.08 −0.27 −0.02
T1 −0.16 0.03 −0.03 0.07 0.78 0.061 0
T2 0.02 −0.16 0.02 −0.04 0.76 0.078 0
T3 0.11 −0.3 −0.04 0.33 0.82 0.06 0.07
SAT1 0.2 0.1 0.08 0.07 0.29 0.75 −0.03
SAT2 0.3 0.05 −0.02 0.02 0.35 0.76 −0.06
SAT3 0.11 −0.03 −0.06 −0.21 0.46 0.84 0.2
Table AII. CI1 0.09 0 0 0.07 −0.51 0.21 0.82
Factor loading
CI2 0.28 −0.02 −0.08 0.07 0.54 −0.05 0.79
exploratory factor
analysis (principal CI3 0.11 0.23 −0.09 −0.19 0.05 0.01 0.73
components with Eigen Value 7.81 6.8 2.4 2.3 1.89 1.78 1.56
direct oblimin Notes: Italic values represent the factor loading. All items, except as specifically indicated, use Likert scales
rotation) (1 ¼ “strongly disagree” and 5 ¼ “strongly agree”)

Corresponding author
Anup Kumar can be contacted at: anunewin@yahoo.co.in

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