Perceived Security Risk, Perceived Privacy Risk, and Perceived Trust of Mobile Payment Adopters and Non-Adopters: Impact of the COVID-19 Pandemic

Introduction

The Covid-19 pandemic has been spreading throughout the world since 2019, causing changes in human behaviour to a vast extent. In the absence of proper treatment, all countries strictly observe preventive measures like wearing face masks and social distancing. As a measure of the latter, shifting from cash to digital payments, which was a medium of convenience, became necessary because physical cash handling can expedite the spread of the virus (Sreelakshmi and Prathap, 2020). In line with this, the World Health Organization (WHO) also recommended using digital payment methods instead of cash and contact-based payments. In addition to that, previous works during pandemic times (Daragmeh et al., 2021) confirm adoption of mobile payments as a way of social distancing can prevent the spread of the virus. Somehow, in Sri Lanka, mobile phone banking has increased from 65.6% in the fourth quarter of 2020 compared with the fourth quarter of 2019 (before pandemic) (Central Bank of Sri Lanka, 2021). The Central Bank of Sri Lanka also facilitated several electronic modes of payments as a measure of relief for the pandemic. Although the spread of the epidemic can be a positive factor or even a catalyst in the acceptance and development of digital payments (Mansour, 2021; Shahabi et al., 2020), the enormous rise of cyber threats was also witnessed within the country. A nearly 460 per cent increase in cybersecurity-related matters was recorded in 2020 compared with 2019 (The National CERT of Sri Lanka, 2021).

Ozdemir et al. (2008) reveals a decrease in internet banking, which appears to be primarily due to security risk and privacy risk concerns. So, banks should reduce the risk perception associated with using the service. Addressing these risk concerns has become a key challenge in the mobile banking context in Sri Lanka for years (Dandeniya, 2014). Even though the COVID-19 outbreak compelled people to make digital payments, everyone is not at ease with or even willing to use those (Undale et al., 2021). Therefore, there is a potential to occur a sharp fall of users unless banks are concerned about the security of apps (Undale et al., 2021). In this sense, the pandemic can potentially switch people from cash to mobile payment (m-payment) and increase the digital payment users' cash handling intention once the pandemic is over. Therefore, it is salient to examine the risk perception of non-users and users related to mobile payments. Previous studies prove that adopters and non-adopters have different perceptions of the risk of any new technology, which influences their future usage intentions. According to Khanra et al. (2021), privacy concerns are associated with consumers' adoption or postponement of mobile payment services during pandemic times. Although over 57 million internet banking transactions were recorded in 2020, the volume of mobile banking transactions is approximately 27 million (Central Bank of Sri Lanka, 2021). This proves that a significant non-adopter segment still prevails in the mobile payment market. However, to accelerate the diffusion of mobile banking, identification of the dichotomous nature of the perceptions between adopter and non-adopter groups is vital (Ozdemir et al., 2008).

Moreover, Lee et al. (2005) highlight the need to segment the customer group further to identify their heterogeneous nature. In line with this, the purposes of this study are, are identified as 1) to understand the differences between adopters’ and non-adopters perceptions related to a security risk, privacy risk and trust in mobile payments, 2) to understand the differences between prospective adopters and persistent non-adopters related to a security risk, privacy risk and trust in mobile payments, 3) to segment adopters to identify the heterogeneous nature of the adopters and 4) to understand the differences related to a security risk, privacy risk and perceived trust within the adopter group.