The Effect of Reciprocity on Mobile Wallet Intention: A Study of Filipino Consumers

The Effect of Reciprocity on Mobile Wallet Intention: A Study of Filipino Consumers

Donald Amoroso (Auburn University, Montgomery, USA), Ricardo Lim (Asian Institute of Management, Philippines) and Francisco L. Roman (Asian Institute of Management, Philippines)
Copyright: © 2021 |Pages: 27
DOI: 10.4018/IJABIM.20210401.oa4
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The authors build on the literature on reciprocity by exploring a prevalent social and economic phenomenon in the Philippines where individuals with positive mobile phone balances can SMS loads to acquaintances. This practice is known as “pasaload”—an abbreviation of Pass-A-Load. The research was designed based on the literature review that in turn resulted in a research model that focused on six constructs: reciprocity, loyalty, habit, switching costs, trust, and future repurchase. Hypotheses were developed as the basis for a scaled survey of 1050 Philippine smartphone users, with the questions adapted from but adhering closely to the original questions from appropriate articles in the literature review. Overall the mediating effects from the two models are consistent with the expectations from the literature and analysis. In the Philippine context, habit might be a strong mediator even if the true financial and convenience costs to switch is low.
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1. Introduction

This paper focuses on three questions. First, to what extent do the social constructs of reciprocity and trust affect Philippine telecommunication product continuance? While reciprocity has been studied extensively in the context of electronic communities and social media, it has not figured in technology use or acceptance, or in purchase intention. If the TAM (Davis et al. 1989) and UTAUT (Venkatesh et al. 2003) models explain intention from a usefulness perspective, we attempt to build on earlier literature on habit and product loyalty. Second, how do Philippine cultural values of bayanihan, or kinship, and utang na loob, or “debt of gratitude” reinforce the use of a popular Telecommunication mobile wallet application called “pasaload?” Third, can reciprocity and trust enhance the effects of customer switching costs, loyalty, and habit on their intent to repurchase?

1.1. Background

In 2014 the Philippines’ population of 100 Million people had 1.16 SIM cards per capita: many Filipinos used multiple SIM cards or had more than one mobile phone. Moreover, 96% of the country’s SIM cards were prepaid (Waring 2014). The Philippine telecommunications industry is effectively a duopoly, comprising two main players: SMART and Globe, and a few minor other telecommunications firms. Globe had a slight edge of 52% in market share as of 2017 (Mobile World Live, 2017). SMART and Globe’s products were largely undifferentiated in features, technology, and service. Customers tended to make repurchase decisions based on habit, loyalty to the product, and switching costs such as time and effort and loss of the mobile number. Despite their product homogeneity, the two telecommunication firms continued to experience moderate churn.

Philippine prepaid users could be characterized as “hand to mouth” users (Amoroso & Lim 2017) who frequently run out of load, and replenish only when they have surplus cash. Prepaid users normally top up at retail stores by buying scratch cards, but this process may be inconvenient and time-consuming. Minimum scratch card prices (PhP 30 or 60 US cents) may also be beyond the one-time available cash of many Filipino users. Given this inconvenience and cash shortages, SMART developed an innovative mobile wallet mechanism to allow friends to share load for texts, data, voice: they called it “Pasaload,” a contraction of “pass me a load.” This mechanism was soon replicated by competitors, who labelled their versions “Give-A-Load,” and “Share-A-Load.” For convenience in this paper we label generic load sharing mechanisms as “pasaload.”

Pasaload worked as follows: users with a positive prepaid balance or a post-paid plan could use SMS (texting) to pass a load to anyone within the same telecom provider, starting from amounts as low as 2 pesos (about 4 US cents). However, there was minor friction: the telecommunication firm charged a small fee of 1 peso (2 US cents) per pasaload, so users might send higher denominations, such as 30 or 100 pesos, to avoid repeated transaction fees. 30 pesos (about 60 US cents) was good for 30 texts, or 5 minutes of calls, or 100 MB of data; higher loads could secure more texts, calls, and data. Since pasaloads work only within the same telecommunication firm, it is a mechanism for “locking in” customers through network effects (Shapiro & Varian 1998).

Beyond convenience, pasaload’s popularity might be due to its effective exploitation of kinship and debt of gratitude. Filipinos demonstrate a strong aspect of community sharing and positive social capital (Fuligni et al. 1999; Uyen & Prociuncula 2010). Filipinos describe these cultural traits as utang na loob, literally, “debt of the self,” or debt of gratitude, and bayanihan, or kinship, involving the sharing of resources (Rungduin et al. 2016). Bayanihan reflects a social contract in Philippine culture and may represent the foundation for the trait of Utang na loob. Sharing implies that favors should be returned: by sharing with you, I generate utang na loob to me. Rungdiun et al (2016) describe the pervasiveness of debt of gratitude in Filipino culture: it strengthens religious beliefs and faith; returning of political favors; lending money to others; dutiful caring for family, either elderly or younger siblings; and other meaningful societal or familial transactions and obligations. Debt of gratitude may extend to mundane, trivial, and low-cost transactions such as phone loads. “If I pass you a load, you ought to return the favor.” Reciprocityis expected, without which there is possible social shaming (Gouldner 1960; de Guia 2005). Though implied, reciprocity need not be 1-for-1, i.e. for customers to exchange monetarily equivalent loads: reciprocity may occur even if exchanged values are not the same.

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