BARRIERS TO ADOPTION OF MOBILE BANKING: THE CASE OF PRIVATE AND GOVERNMENT BANK CUSTOMERS’ IN ADDIS ABABA, ETHIOPIA

Abstract

The purpose of this research is to investigate the perceived barriers to adoption of mobile banking among consumers in Addis Ababa Ethiopia , and to assess whether the usage of M-Banking is constraint on the basis of different demographic characteristics such as age, income level, mobile phone usage “experience” and marital status. The study tries to build on two widely used models for technology adoption, the Technology Acceptance Model (TAM) and Innovation Diffusion Theory (IDT) and to identify factors influencing customer's usage of mobile banking Although millions of dollars have been spent on building mobile banking systems, reports on mobile banking show that potential users may not be using the systems, despite their availability. Thus, research is needed to identify the factors determining users’ acceptance of mobile banking. While there has been considerable research on the technology acceptance model (TAM) that predicts whether individuals will accept and voluntarily use information systems. A research model uses the TAM model and IDT model by integrating perceived risk, trust and awareness into the established models. This study was conducted based on the data gathered from customers of Awash international bank, Dashen bank, commercial bank of Ethiopia, Wegagen bank share company, bank of Abyssinia, Nib International Bank, Lion International Bank and, Adis international Bank in Addis Ababa, Ethiopia. Data were collected using convenient sampling via self-administered questionnaire in a in the city of Addis Ababa .A total of 384 survey questioners’ 320 usable responses were collected from users and non-users of mobile banking and retained for analysis using SPSS version 23. The research results found, perceived trust in the M-bank service emerged as the most significant factor that impacts on the adoption of m-bank service following, perceived usefulness, awareness and perceived ease of use as major influencing factors for mobile banking adoption whereas Perceived self-efficacy were found to have insignificant effect on mobile banking usage for bank customers located in Addis Ababa, Ethiopia. The study recommended banks to consider investing in security and in arranging campaigns information sessions to demonstrate the features of mobile banking services, and its benefits over traditional channels.