Merchant adoption intention of mobile payment platforms in Malaysia

Abstract

Purpose
In recent years, Malaysia has seen a dramatic change in the landscape of financial transactions due to the fast growth of mobile payment systems. This study aims to examine the technological, organisational and environmental (TOE) factors of merchants’ adoption intention to use mobile payment platforms essential for the continuing development and profitability of these cutting-edge payment options.

Design/methodology/approach
The research model was developed from the TOE framework and tested with the data collected from 120 merchants in Malaysia. The partial least squares structural equation modelling technique was used in analysing the collected data.

Findings
Technology readiness and competitor pressure were directly related to merchants' mobile payment adoption intention and indirectly through perceived strategic value. Also, perceived ease of use and perceived strategic value were significant predictors of the adoption intention of mobile payment.

Originality/value
This model demonstrates the relevance of TOE in explaining merchants' mobile payment adoption intention, with implications for policy and strategy to support the broader adoption of mobile payment platforms in Malaysia.

Full text

Merchant adoption intention of
mobile payment platforms in
Malaysia
Adedapo Oluwaseyi Ojo
School of Strategy and Leadership, Coventry University, Coventry, UK
Olawole Fawehinmi
Department of Marketing, Faculty of Business, Economics and Social
Development, Universiti Malaysia Terengganu, Terengganu, Malaysia
Christine Nya-Ling Tan
School of Digital Technologies, Manukau Institute of Technology,
Auckland, New Zealand, and
Oluwayomi Toyin Ojo
Faculty of Management, Multimedia University, Cyberjaya, Malaysia
Abstract
Purpose –In recent years, Malaysia has seen a dramatic change in the landscape of financial transactions
due to the fast growth of mobile payment systems. This study aims to examine the technological,
organisational and environmental (TOE) factors of merchants’adoption intention to use mobile payment
platforms essential for the continuing development and profitability of these cutting-edge payment options.
Design/methodology/approach –The research model was developed from the TOE framework and
tested with the data collected from 120 merchants in Malaysia. The partial least squares structural equation
modelling techniquewas used in analysing the collected data.
Findings –Technology readiness and competitor pressure were directly related to merchants’mobile
payment adoption intention and indirectly through perceived strategic value. Also, perceived ease of use and
perceived strategic value were significant predictors of the adoption intention of mobile payment.
Originality/value –This model demonstrates the relevance of TOE in explaining merchants’mobile
payment adoption intention, with implications for policy and strategy to support the broader adoption of
mobile payment platforms in Malaysia.
Keywords Adoption intention, Electronic commerce, Merchant, Mobile payment, Financial technology,
Digital transformation
Paper type Research paper
1. Introduction
Global trade and commerce have significantly been transformed by advancing digital
technologies and the internet, fuelling economic activities. With access to the internet, people
can seamlessly use their smartphones to perform several functions, including learning,
searching for jobs, entertainment, banking, and other financial services (Ojo et al., 2022a,
2022b). The proliferation of mobile commerce applications like shopping, travel and
entertainment has allowed organisations to innovate their business model (Soodan and
Rana, 2020). In addition, the recent innovation in payment methods has extended
transactions beyond the traditional cash exchange and conventional financial services to
Merchant
adoption
intention
Received 11 August2022
Revised 12 December2022
12 March 2023
5 October 2023
Accepted 19 November2023
Journal of Systems and
Information Technology
© Emerald Publishing Limited
1328-7265
DOI 10.1108/JSIT-08-2022-0200
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1328-7265.htm

include electronic and mobile technologies. The advancement in mobile payment methods
can be ascribed to a confluence of technology improvements, shifting consumer tastes and a
rising focus on digital financial inclusion (Zhang et al.,2023). Mobile payment here refers to
any business activities that use mobile devices to complete economic transactions
(Pipitwanichakarn and Wongtada, 2019). Mobile payment has become vital for ensuring
online consumers’seamless and convenient shopping experiences with the increasing
acceptance of internet-based commerce. Besides playing a critical role in the economy and
promoting online finance ethos, mobile payment increases efficiency in delivering financial
services to underserved communities (Nandru et al.,2023).
The adoption and use of mobile payment platforms by merchants are crucial for several
reasons. Predominantly, it offers substantial interaction between the mobile payment
platforms and customers, thus determining the general success and durability of mobile
payment environments by adopting and integrating the platforms into the merchants’
everyday business operations (Abrahim Sleiman et al.,2023). With this, a wide range of
advantages, such as lower transaction costs (Zhong and Chen, 2023), improved operational
effectiveness (Fu et al., 2022), enhanced customer experiences (Sun et al., 2022) and access to
insightful data and analytics (Shankar and Behl, 2023), are potentially available to
merchants through mobile payment systems. Despite these benefits, businesses must
overcome difficulties and obstacles before adopting mobile payment services. Technological
preparedness (Cham et al., 2022), perceived expenses (Zhong and Chen, 2023) and
compatibility (Lee et al., 2019) with current systems are just a few examples.
In the past two decades, several studies have investigated consumer intention to adopt and
use mobile payment platforms (Li
ebana-Cabanillas et al., 2020;Ojo et al.,2022b;Soodan and
Rana, 2020;Verkijika, 2020). However, limited attention has been focused on the merchant’s
adoption intention of mobile payment (Moghavvemi et al., 2021;Singh and Sinha, 2020).
Investigating the adoption intention of mobile payment from the merchant’s perspective is
essential to understanding the usage of emerging technologies like e-commerce. The merchant
plays a crucial role by deploying platforms for customers, making their apathy result in the
collapse of mobile payment as an alternative platform (Dahlberg et al., 2015). Hence, relevant
stakeholders, including academics, practitioners and policymakers, have shown interest in
understanding the drivers and barriers of merchants’adoption intention to utilise mobile
payment platforms (Singh and Sinha, 2020).
In Malaysia, for example, the Bank Negara Malaysia (i.e. the Central Bank of Malaysia)
has taken several initiatives to incentivise mobile payment usage and enhance security and
accessibility among merchants (Bank Negara Malaysia, 2021). Besides, the COVID-19
pandemic has accelerated the transition to the digital economy by shifting consumers’
interest in electronic transactions (Ojo et al., 2022b). For example, a Mastercard survey
during the lockdown in March 2020 reported that consumers’concern for safety and hygiene
contributed to the growth of contactless payments from 25% to 91% in the Asia Pacific
region (Saraogi, 2020). Thus, limiting physical interaction has intensified the shift toward
digital spending and consumption behaviour. Such changes create significant opportunities
for merchants who are just starting to see the benefits of accepting e-payments (IDC, 2020).
Notwithstanding the conducive climate for the growth of electronic and cashless payment,
Malaysia remains a predominantly cash-based economy, with approximately 80% of
transactions done bycash (Moghavvemi et al., 2021).
Guo and Bouwman (2016) argued that the survival of mobile payment hinges on the
merchant’s intent on deploying the platform for customer usage. Mobile payment facilitates
efficient and secure commercial transactions between a service provider and consumers
(Ondrus and Pigneur, 2006). However, many merchants hesitate to deploy their scarce
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resources into emerging platforms like mobile payment. Hence, the adoption intention of
mobile payment can be described as the propensity to adopt business activities and
processes that use mobile devices for business transactions.
As a sequel to the above, this study investigates the technological, organisational and
environmental (TOE) factors influencing merchants’adoption intention of mobile payment
platforms. According to Wong et al. (2020), previous studies on adoption intention are
primarily based on linear models like the theory of planned behaviour (TPB), the technology
acceptance model (TAM) and the unified theory of acceptance and use of technology
(UTAUT), which are inadequate in capturing the organisational and environmental factors.
Thus, based on the TEO framework, we examine the merchant’s adoption intention of
mobile payment in Malaysia. Further to the organisational factor of technology readiness
(TRE) and environmental factor of competitor pressure (COP), we demonstrate the relevance
of technological aspects, i.e. perceived ease of use (PEU) and perceived strategic value (PSV)
associated with the merchant’s adoption intention of mobile payment. Besides, we clarify the
influence of TRE and COP on merchants’PSV and adoption intention of mobile payment
platforms. Accordingly, our findings offer recommendations to policymakers and service
providers in developing appropriate strategies to support the broader adoption of mobile
payment platforms in Malaysia.
In Section 2 of this paper, we examined the theoretical background and hypothesised the
relationships among the variables. Subsequently, in Section 3, we presented the
methodology, focusing on the data collection and sampling procedure. The results of data
analyses were then discussed in Section 4 before we elaborated on the implications of
findings from theoretical and practical perspectives in Section 5. Lastly, in Section 6, we
concluded the study and highlighted the areas for further research.
2. Theoretical background and hypotheses development
Most influential technology adoption models like the protection motivation theory, TAM,
UTAUT and TPB have posited the factors associated with individuals’technology
acceptance (Alsmadi et al.,2022;Baltruschat et al.,2023;Mahmud et al., 2023;Lin et al.,
2020). On the other hand, the TOE framework is one of the few models conceptualising
technology adoption from the organisational perspective (Awa et al.,2015;Ergado et al.,
2021). TOE posited the three main factors associated with firms’adoption of new technology
as TOE contexts (Tornatzky and Fleischer, 1990). Nonetheless, the specific factors are
subject to the context of the study (Qiong et al., 2017). The technological context reflects the
extent to which elements, i.e. perceived strategic value, compatibility and complexity, could
influence the adoption of new technology. The firm’s operating scope, upper management
support, organisational culture, quality of human resources and size-related issues like
internal slack resources and specialisation are all aspects of organisational context.
Environmental context refers to the external factors that could facilitate or inhibit firms’
technology adoption. These factors include competitive pressure, the readiness of trading
partners, government policies and supporting infrastructures (Tornatzky and Fleischer,
1990).
This framework has been adapted to investigate supply chain integration (Tian et al.,
2021), technological innovation-decision (Hue, 2019), health information system usage
(Khobi et al.,2020), adoption of automatic warehousing systems (Hao et al.,2020), ICT
adoption in higher educations (Ergado et al., 2021) and halal transportation adoption (Ngah
et al.,2021). Also, TOE could offer a suitable theoretical background for investigating the
adoption intention of mobile payment among merchants. Mobile payment denotes payments
for goods and services via electronic devices, such as smartphones and tablets (Shaw and
Merchant
adoption
intention

Sergueeva, 2019). Using technology like mobile payment platforms could enhance the
performance of merchants in building and sustaining stronger ties with clients and
customers (Kurnia et al., 2015). Likewise, more businesses are using mobile payment
technology, permeating the operations of small- and medium-sized enterprises (SMEs) and
merchants (Pipitwanichakarn and Wongtada, 2019).
Consequently, this study adopts the modified TOE model to investigate the factors
associated with merchants’adoption intention of mobile payment platforms. Based on TOE,
we consider TRE and COP as the organisational and environmental factors, respectively,
while PEU and PSV are attributed to the technological aspect (Ahani et al.,2017;Mkansi,
2021). As shown in the research model in Figure 1, TRE and COP are proposed as
determinants of merchants’PSV and intention to adopt mobile payment. Further, the
influence of PEU on the intention to adopt mobile payment is investigated.
2.1 Effect of technology readiness
TRE is essential to realising the PSV of mobile payment platforms. TRE refers to the technical
infrastructure and human resources necessary to efficiently use IT services (Rahayu and Day,
2015). It is also called technological competence, which constitutes the organisation’s technical
prowess, including the IT infrastructure and experts (Wang et al., 2010). TRE captures the
state of preparedness of the merchants to effectively deploy the new technology, i.e. mobile
payment platform (Aboelmaged, 2014). Thus, one of the most critical organisational factors
affecting the adoption intention or deployment of new technology is the organisation’s
technical expertise, which could also be a source of PSV (Trainor et al., 2011).
PSV is the competitive advantage an organisation is positioned to gain among
competitors in the industry by deploying unique resources (Gangwar et al., 2015). Firms
have started to see the strategic value of mobile payment platforms in sustaining
competitive advantage in today’s dynamic business landscape. Mobile payment platforms
create a relative technological advantage for an organisation by facilitating performance
through cost reduction, sales increment, operational improvements and customer relations
enhancement (Mahakittikun et al., 2021). These PSVs could influence merchants’adoption
intention of mobile payment platforms.
The availability of adequate technological infrastructure for mobile payment platforms
could enable organisations to recognise the strategic value of deploying such platforms.
Technological resources in the organisation could allow managers to deduce the possible
competitive advantages of using such resources. For instance, an organisation with highly
skilled IT employees could better recognise the strategic value of deploying IT-enabled
payment platforms that are easy, convenient, and safe for customers.
Figure 1.
Research model
Perceived
Ease of Use
Perceived
Strategic Value
Technology
Readiness
Competitor
Pressure
Mobile Payment
Adopon Intenon
Source: Created by authors
JSIT

Martín et al. (2012) noted that organisations with increased technological readiness tend
to adopt e-business. Organisations with IT infrastructure and employees could consider
adopting mobile payment platforms to ease transactions. Clohessy and Acton (2019) found
TRE essential in shaping the PSV of blockchain adoption. Also, Khobi et al. (2020) affirmed
that TRE and perceived organisational benefits are significant factors when implementing
health information management systems. Another study on mobile hotel reservation
systems (MHRS) indicated that hotels’technological resources substantially influence
MHRS adoption (Y. S. Wang et al., 2016). Hence, the following is hypothesised:
H1a. TRE is related to merchants’PSV of mobile payment platforms.
H1b. TRE is related to the merchants’mobile payment adoption intention.
2.2 Effect of competitor pressures
COP refers to the firm’s perception of rivalry from competing firms in the industry (Malik
et al.,2021). When faced with intense competition, a business is more inclined to seek new
business methods and develop technological innovation. Successful application of the latest
technology in the industry enables the firm to adjust the competition’s rules and level the
playing field (Ghaleb et al.,2021). In an attempt to adapt to the pressures from competitors,
organisations may recognise the potential strategic value of a mobile payment system. For
instance, COP plays a significant role in banks’intention and decision to adopt mobile
banking services by enabling them to recognise the benefits of deploying such services
(Mullan et al.,2017). A qualitative study revealed that firms’external forces could enhance
the PSV of big data analytics by enabling the firm to come to terms with the benefits of
adopting big data analytics. In addition, the effect of COP could emanate from competitive
performance analysis to determine the strategic actions of competitors (Verma and
Bhattacharyya, 2017). In essence, pressure from external forces could be advantageous for
an organisation, especially when aligned with strategic goals.
Malik et al. (2021) established that COP is a primary driver of the firm’s adoption of
blockchain technology. Competitors will likely follow suit when an enterprise adopts new
technology (Cao et al.,2014). Yoon and George (2013) evaluated prior studies and concluded
that COP is essential in the firm’s intention and decision to adopt new technology. Molinillo
and Japutra (2017) demonstrated the significant influence of competitors’mimetic pressure
on firms’intention to adopt virtual services. Besides, Lutfi(2020) revealed that COP
significantly predicts adopting enterprise resource planning systems. Martins and Picoto
(2019) revealed that external factors, such as the obligation to comply with tax regulations
and the desire to embrace modern practises, serve as motivating factors for business owners
to implement information technology. However, the effect of COP on the firms’adoption
intention of mobile payment has seldom been investigated (Jocevski et al.,2020
). In line with
the above, the following is hypothesised:
H2a. COP is related to merchants’PSV of mobile payment platforms.
H2b. COP is related to merchants’mobile payment adoption intention.
2.3 Effect of perceived ease of use
Further to the extensive studies on consumers’intention to adopt mobile payment platforms
(Ozturk et al., 2016;Daragmeh et al., 2021), we emphasise the initial process before such a
platform is deployed for customer usage. The initial process is the choice made by the
Merchant
adoption
intention

organisation to either adopt the platform or not, which could be based on how easy it is to
use. PEU refers to the extent to which organisations consider mobile technology easy to use,
which has become a driving force in adoption decisions (Cimbaljevi
cet al.,2023). For
instance, an organisation may choose not to adopt mobile payment technology that is not
user-friendly and complicated for its customers and other stakeholders. Hence, PEU is
denoted as the degree to which an organisation believes adopting a new technology will be
stress-free for all stakeholders, including customers and suppliers. According to Sharma
et al. (2017), consumers’propensity to use technology could be a vital determinant of a
technology deployment initiative by an organisation.
PEU has been found to influence the adoption intention of new technology significantly. For
instance, a study on hotels’adoption of mobile reservation systems reveals that the complexity
of technology is negatively significant to the adoption of such technology (Wang et al., 2016).
Wiradinata (2018) also determined that ease of use could motivate organisations to adopt mobile
payment technology. As organisations are customer-centred, they are likelier to consider
effortless mobile payment platforms as easy for customers. Thus, decision markers that perceive
mobile payment platforms as easy and less complicated for the end-users may develop the intent
to adopt such platforms. Based on this postulation, the following is hypothesised:
H3. PEU is related to merchants’mobile payment adoption intention.
2.4 Effect of perceived strategic value
PSV is the relative advantage of having a new technology over existing technology, with the
expectation of enhancing the reputation and acceptance of the organisation’sproducts(
Mullan
et al.,2017). Further, relative advantage is the degree to which a new technology is seen as
superior to the one it replaces (Al Hadwer et al., 2021). Technologies are evaluated primarily
based on how they are perceived to provide value to the organisation. The main goal of every
organisation is to gain a competitive advantage over its competitors in the industry. Thus,
afirm is more likely to adopt new technology if it offers strategic value over existing
technology. For example, before deploying new IT services, organisations evaluate the extent
to which the new system will provide real-time information, integration of business processes,
support decision support and greater flexibility in responding to emerging circumstances
(Poulis et al., 2013), which can outperform other competitors’IT services.
PSV is crucial in understanding the business value of new technology, and it is necessary to
develop an appropriate intervention that accurately conveys that value (Narwane et al., 2019;
Mullan et al., 2017). As a result, managers need to ascertain the worth of new technology in the
organisational context, thus emphasising the importance of understanding the business value of
new technology in an organisation. According to Alshamaila et al. (2013), the PSV of adopting
cloud services is the degree to which users recognise the relative value that cloud services can
bring over other similar systems. Thus, an organisation could consider a technology that
delivers satisfying products to clients and customers as having strategic value. Organisations
want technology to be viewed as valuable to customers by providing overall superior services,
thereby enhancing the intention to adopt such technology (Singh and Sinha, 2020).
A study in the banking sector asserted that one of the key drivers of mobile banking
adoption is the strategic value that emanates from the competitive advantage gained over
other competitors (Mullan et al., 2017). It is revealed that the PSV resulting from a superior
technology offered could influence the intention and decision of an organisation to adopt
such technology (Khobi et al.,2020). Further, a study in China showed that the perceived
relative advantage of technology, the PSV, is one of the crucial determinants of IT adoption
in organisations (Hao et al.,2020). According to Narwane et al. (2019), SMEs’perception of
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strategic values is positively associated with the adoption of the Cloud of Things. Hence, we
proposed the following hypothesis:
H4. PSV is related to merchants’mobile payment adoption intention.
2.5 Mediating effect of perceived strategic value
The pressure to catch up with competitors can motivate organisations to perceive the
benefits of what can be achieved if the relevant state-of-the-art technology is deployed. PSV
is the perception of enhanced personalised customer offerings, increased profit margins or
new product or market development from deploying new technology (Verma and
Bhattacharyya, 2017). When an organisation possesses the required technological know-
how, support and infrastructure, it may realise strategic value by effectively integrating
these resources, thereby enhancing the intention to adopt new technology like the mobile
payment system. In the organisational context, it is discovered that PSV results from
technological readiness, which influences the intention to adopt mobile commerce (Clohessy
and Acton, 2019). Another study revealed that the perceived service quality, which reflects
PSV, could result in adopting e-commerce in the organisation (Awa et al.,2015).
COP enables organisations to respond to the demand in the market and the need to
revolutionise customer service delivery, thereby influencing organisations to think about the
various benefits and relative advantages of adopting mobile payment platforms. By reviewing
how their competitors perform when using mobile payment platforms, organisations could
realise the PSV of the platforms, which could lead to the desire to embrace them (Cao, 2021).
Gangwar et al. (2015) revealed that firms are hesitant to make technological investments
without pressure from any industry partners. It could be because such a venture has no PSV
in the industry, which reveals the relevance of competitor pressure in pushing organisations
toward adopting mobile payment systems. Verma and Bhattacharyya (2017) argued that
external pressure from competitors would lead to a PSV of big data analytics, resulting in
the organisation’s adoption intention of big data analytics. Based on the above, the following
hypotheses are suggested.
H5a. PSV mediates the relationship between TRE and merchants’mobile payment
adoption intention.
H5b. PSV mediates the relationship between COP and merchants’mobile payment
adoption intention.
3. Research methods
3.1 Data collection procedure
The respondents were limited to retailers like department stores, supermarkets, restaurants,
and convenience stores located within the Klang Valley metropolis comprising Kuala
Lumpur and Selangor in Malaysia. Klang Valley is Malaysia’s most populous, diverse and
urbanised region; hence, retailers here are more likely to be aware of the mobile payment
platforms (Ojo et al., 2022a). Following the intercept survey technique, this research
recruited two research assistants to distribute and collect the questionnaires from retailers
in five major shopping centres across the metropolis. We adopted the intercept technique
because of its ease of implementation and low refusal rate when collecting data from diverse
respondents (Ojo et al., 2022a). The store owners or managers completed the questionnaires.
Merchant
adoption
intention

From a total of 205 administered questionnaires, we collated 120 as fully completed. The
descriptive statistics of the participant merchants are summarised in Table 1.
We followed Cohen’s (1988) recommendations in determining the minimum sample size
by setting the G*Power software to effect size (f
2
)¼0.15,
a
¼0.05 and power of 0.80. Based
on the research model (Figure 1), a minimum sample of 98 is required. Thus, the collected
120 responses are adequate for this study.
3.2 Operationalisations and measurement
The five measurement items for TRE were adapted from Vize et al. (2013), and PEU was
measured with five items from Kapoor et al. (2015).Wemodified four items and three items
in measuring PSV and COP, respectively (Malik et al., 2021). The three items for mobile
payment adoption intention were adapted from Venkatesh et al. (2000). Moreover, all the
scales were based on the five-point Likert scale ranging from “1”(Strongly Disagree) to “5”
(Strongly Agree). The complete measurement items are summarised in Table 2.
3.3 Common method bias
As in the present study, cross-sectional data collected from a single respondent is
susceptible to CMB. Thus, to minimise this issue, we incorporated the relevant procedural
and statistical recommendations (Guide and Ketokivi, 2015). For the former, we enclosed a
cover letter to the questionnaire, stating the purpose of the study, with a promise to
guarantee the respondents’anonymity. For the latter, we performed Harman’s single-factor
test to examine the likely statistical effect of CMB. The result reveals that the largest single
factor accounts for 21.99% of the variance, which is lower than the suggested value of 50%
(Podsakoff et al.,2003). Thus, CMB has not significantly impacted the self-reported data.
4. Data analyses and results
This measurement and structural models have been evaluated following the partial least
squares structural equation modelling (PLS-SEM) technique. This technique employs a non-
parametric approach to enhance the variance of the endogenous variable that can be
Table 1.
Merchants’
descriptive statistics
Demographic variables Frequency %
Years in operation
Below 3 years 44 36.7
3–8 years 51 42.5
Above 8 years 25 20.8
Number of employees
Less than 5 45 37.5
5–10 53 44.2
More than 10 22 18.3
Annual sales revenue (US$)
Less than 50,000 52 43.3
51,000–100,000 43 35.8
Above 100,000 25 20.8
Currently use e-wallet
Yes 80 66.7
No 40 33.3
Source: Created by authors
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explained (Hair et al.,2017). It has also become widely used in exploratory research for its
adaptability in estimating parameters from revised measurement models, as currently done
in our study (Hair et al.,2017;Henseler et al.,2009). Consistent with the literature, we
adopted the two-stage approach in assessing the research model (Ojo, 2021;Peng and Lai,
2012). Firstly, we evaluated the validity and reliability of the measurement model. Secondly,
we tested the hypotheses based on the evaluation of the structural model.
4.1 Measurement model
In assessing the reliability of the measurement model (Figure 2), we considered the values of
Cronbach alpha (
a
) and composite reliability (CR). The obtained
a
and CR values are higher
than the recommended 0.7, indicating the measurement scales’reliability (Table 2). Besides,
in assessing the convergent and discriminant validity, the average variance extracted (AVE)
values and the variables correlation matrix were also examined (Ojo and Fauzi, 2020;Peng
and Lai, 2012). As shown in Table 2, the factor loadings and AVEs were above the
threshold, i.e. 0.6 and 0.5, respectively. Hence, the model fulfils the conditions for convergent
validity (Fornell and Larcker, 1981;Peng and Lai, 2012).
Table 2.
Measurement items
and scales
Variables and items
Factor
loading
Competitor pressure (
a
¼0.794; CR ¼0.879; AVE ¼0.708)
My organisation can feel the pressure to adopt mobile payment when our competitors have
adopted it
0.816
My organisation can feel the fear of losing a competitive advantage if we do not adopt
mobile payment platform
0.842
My organisation can adopt mobile payment when our competitors are benefiting from
adopting it
0.865
Perceived ease of use (
a
¼0.860; CR ¼0.896; AVE ¼0.633)
Mobile payments are easy to use 0.778
Mobile payments transactions require less effort 0.827
Mobile payments can facilitate convenient payments transactions in our organisation 0.824
Using mobile payments is easily for the things that are important in our organisation.
My organisation can access all transactions easily in mobile payments
0.787
0.761
Perceived strategic value (
a
¼0.805; CR ¼0.866; AVE ¼0.618)
Mobile payment transactions can enable my organisation to reduce overhead expenses 0.822
Mobile payment transactions can enable my organisation to reduce transaction costs 0.791
Mobile payment transactions can increase my organisation’s overall productivity 0.729
Mobile payment transactions can enable my organisation reduce data error rates 0.800
Technology readiness (
a
¼0.834; CR ¼0.883; AVE ¼0.603)
Mobile payment can enable more efficient business transactions 0.814
My company can perform more transactions with mobile payment 0.768
My company keeps abreast of the latest mobile payment platform 0.837
My company has the adequate technical support for mobile payment platform.
My company considers mobile payment safe for business transactions
0.785
0.668
Mobile payment adoption intention (
a
¼0.777; CR ¼0.871; AVE ¼0.693)
I believe that my organisation intends to adopt mobile payment in the future 0.790
I would strongly recommend my organisation use mobile payment platform 0.888
I believe that the adoption of mobile payment will largely benefit my organisation 0.815
Source: Created by authors
Merchant
adoption
intention

We evaluated the discriminant validity by comparing the construct’s pair correlation values
with the corresponding square root of the AVEs (Table 3). The AVEs values presented in
the main diagonal are higher than the pair correlations between the associated constructs,
satisfying the conditions for discriminant validity (Fornell and Larcker, 1981).
Further to Fornell and Larcker’s measure of discriminant validity, the results of the
Heterotrait-Monotrait ratio of correlations (HTMT) test are summarised in Table 4.TheHTMT
has been suggested as a more accurate measure of discriminant (Henseler et al., 2016). As
shown in Table 3, the HTMT ratios are lower than 0.85, the threshold value suggested by
Henseler et al. (2009), thereby confirming the discriminant validity of the measurement model.
4.2 Structural model
Consistent with the literature, we performed the bootstrapping procedure to estimate the
significance of the p-values of the coefficients for the hypothesised paths (Ojo and Fauzi, 2020).
The generated structural model is shown in Figure 3, with the results summarised in Table 5.
Figure 2.
Measurement model
Table 3.
Results of
discriminant validity
Variables 1 2 3 4 5
1. Competitor pressure 0.841
2. Perceived ease of use 0.272 0.796
3. Perceived strategic value 0.334 0.102 0.786
4. Technology readiness 0.489 0.032 0.311 0.777
5. Mobile payment adoption intention 0.531 0.265 0.351 0.459 0.832
Note: The diagonal items in Italics are the AVE values
Source: Created by authors
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As shown in Table 5, TRE seems to be associated with the PSV of mobile payment
(
b
¼0.194 p<0.1). Although this relationship was only significant at a p-value of 0.10,
the moderate beta coefficient value of 0.194 and effect size of 0.033 reveal the relative
significance of this effect. As hypothesised, our data support the significant effect of TRE
on the merchants’adoption intention of mobile payment platforms (
b
¼0.254 p<0.01).
Also, COP was significantly associated with PSV (
b
¼0.239 p<0.05) and the merchants’
adoption intention of mobile payment platforms (
b
¼0.314 p<0.001). The hypothesised
effect of PSV on the adoption intention of mobile payment platforms was also supported
(
b
¼0.151 p<0.05).
Following Cohen’s (1988) recommendations, this study assessed the effect sizes of 0.02,
0.15 and 0.35 as small, medium and large, respectively. As shown in Table 5, COP (0.050)
and TRE (0.033) have small effects on PSV. Besides, TRE (0.075), PEU (0.036), and PSV
(0.032) have small effects, with COP (0.105) having a relatively medium effect on the
Table 4.
Results of heterotrait-
monotrait ratio of
correlations (HTMT)
Variables 1234
1. Competitor pressure
2. Perceived ease of use 0.293
3. Perceived strategic value 0.346 0.176
4. Technology readiness 0.602 0.112 0.360
5. Mobile payment adoption intention 0.669 0.283 0.409 0.565
Source: Created by authors
Figure 3.
Structural model
Merchant
adoption
intention

adoption intention of mobile payment platforms. According to Chin et al. (2003), the
independent variables’influence on the dependent variable allows even the smallest
strength of effect sizes to be considered.
The model’s explanatory power was assessed from the obtained value of the coefficient of
determination (R
2
). The R
2
(i.e. 0.140) value for PSV suggests that COP and TRE account for a
14% variance in PSV. In contrast, the overall Model R
2
value of 0.377 indicates that all the
predictors can explain 37.7% of the variance in intention to adopt e-wallets. Also, we considered
the Stone–Geiser’s(Q
2
) value in assessing the predictive capability of our model (i.e. 0.101 for PSV
and 0.206 for intention to adopt mobile payment). Given that the Q
2
valueisgreaterthanzero,itis
concluded that the model has acceptable predictive relevance (Peng and Lai, 2012).
4.3 Mediating model
In testing the mediations, we examined the indirect paths from the TRE and COP to mobile
payment adoption intention through PSV. The hypotheses were tested using the bootstrapping
technique (i.e. 5,000 bootstrap samples), a non-parametric resampling procedure (Hair et al.,
2017;Preacher and Hayes, 2008). The mediating results are summarised in Table 6.Giventhe
values of the beta coefficient (0.068), p-value (0.01) and the bias-corrected confidence intervals
(BCCI) (0.012; 0.147), which do not lie within zero, we confirmed the significance of PSV in
mediating the effect of TRE on mobile payment adoption intention. PSV was also a significant
mediator of the relationship between COP and mobile payment adoption intention (
b
¼0.082,
p<0.05, BCCI ¼0.025;0.169).
5. Discussion
The present research examines the theoretical perspective of the TOE framework by
investigating the determinants of merchants’adoption intention of mobile payment
Table 5.
Results of
hypotheses testing
Hypothesis Path Beta t-value f
2
Decision
H1a TRE !PSV 0.194 1.551ᵞ0.033 Supported
H1b TRE !INT 0.254 2.882** 0.075 Supported
H2a COP !PSV 0.239 2.159* 0.050 Supported
H2b COP !INT 0.314 3.036*** 0.105 Supported
H3 PEU !INT 0.157 1.993* 0.036 Supported
H4 PSV !INT 0.151 2.091* 0.032 Supported
Notes: ***p<0.001; **p>0.01; *p<0.05; ᵞp<0.1; TRE –Technology Readiness; PSV –Perceived
strategic value; COP –Competitor pressure; PEU –Perceived ease of use; INT –Mobile payment adoption
intention
Source: Created by authors
Table 6.
Mediating
hypotheses testing
Hypothesis Path Beta 95% confidence interval t-value Decision
H5a TRE !PSV !INT 0.068 0.012 –0.147 1.624ᵞSupported
H5b COP !PSV !INT 0.082 0.025 –0.169 1.797
*
Supported
Notes: *p<0.05; ᵞp<0.1; TRE –Technology Readiness; PSV –Perceived strategic value; COP –
Competitor pressure; INT –Mobile payment adoption intention
Source: Created by authors
JSIT

platforms. Our findings indicated that TRE significantly relates to merchants’PSV and their
adoption intention. Hence, the higher the TRE among the merchants, the higher the PSV and
the adoption intention of mobile payment platforms. These results align with previous
findings regarding the link between TRE and PSV (Clohessy and Acton, 2019) and the
relations between TRE and mobile payment adoption intention (Khobi et al.,2020).
As hypothesised, COP significantly relates to merchants’PSV and their adoption
intention of mobile payment platforms. With increased competition pressure, businesses are
inclined to perceive mobile payment platforms’strategic value and importance, resulting in
their discretion to survive and sustain operations. Thus, our findings are consistent with
previous studies (Verma and Bhattacharyya, 2017;Lutfi, 2020;Molinillo and Japutra, 2017).
Furthermore, our results are consistent with prior research, which revealed that PEU is
significantly related to the adoption intention of mobile payment (Cimbaljevi
cet al., 2023;
Liu et al.,2019;Wang et al., 2016). Thus, merchants’adoption propensity could be enhanced
when mobile payment platforms are perceived as easy for customers or clients to use.
We found that PSV significantly influences the merchants’adoption intentions of mobile
payment. Aligning with previous studies, the relationship between PSV and adoption
intention of mobile payment was statistically significant (Hao et al.,2020;Khobi et al.,2020).
This result suggests that the apparent strategic value of mobile payment technology gives
an organisation the propensity to adopt mobile payment.
Our data support the significant mediating effect of PSV on the relationship between
TRE and the adoption intention of mobile payment platforms. This result is in tandem with
previous studies (Clohessy and Acton, 2019;Awa et al.,2015), which revealed that having
the right technology with supporting human resources could enhance the perception of the
strategic value of mobile payment technology, thereby leading to adoption intention.
Furthermore, the finding of this study shows that PSV significantly mediates the
relationship between COP and the adoption intention of mobile payment platforms. This
finding aligns with the previous research (Verma and Bhattacharyya, 2017), which
explained that competitors’pressures could force organisations to think strategically and
perceive the strategic values obtained through the adoption of mobile payment technology,
leading to the intention to adopt mobile payment technology.
5.1 Theoretical implications
Firstly, this research adapted the TOE framework to examine the predictors of mobile payment
adoption intention among merchants. Our study contributes by addressing the adoption
intention of mobile payment platforms from the perspective of merchants in Malaysia.
Secondly, the conceptual model developed in this study demonstrates the relevance of TOE
further to analyse crucial predictors of merchants’mobile payment adoption intention. With
this, our model could attract the attention of future researchers to study the impact of similar or
other determinants, which would trigger opportunities for further investigation in different or
similar settings or circumstances in countries other than Malaysia.
Thirdly, this study suggests that the environmental factor of COP significantly
influences mobile payment adoption intention among merchants like small- and medium-
sized businesses. Besides, TRE, i.e. in the technological setting, significantly affects
merchants’adoption intention of mobile payment platforms. Interestingly, TRE has the
most negligible impact associated with the mobile payment platforms PSV. In addition, the
present study found that in the organisational context, PSV seemed to be a significant
mediator between COP and merchants’mobile payment adoption intention, compared to
TRE and adoption intention. These results would stimulate forthcoming studies to examine
Merchant
adoption
intention

comparable or diverse predictors and mediators in the TOE framework, particularly in
Malaysia.
5.2 Practical implications
In line with our findings, the technological and environmental contexts have become crucial
for the firms’success. The business environment is dynamic, and to stay competitive,
organisations need to keep up with the competitors in terms of the evolution of technology,
such as mobile payment platforms. During the COVID-19 pandemic and endemic phase,
payment technology has drastically advanced to allow contactless and more convenient
payment systems through smartphones. The finding sheds some light on the TOE
framework’s importance of environmental contexts in shaping organisational technology
development, such as the deployment of mobile payment technology.
Firstly, it shows the relevance of the technological proactiveness of merchants and the
need to have innovative human resources to keep the technical prowess on top. Therefore,
this study suggested that top organisational management constantly scans the environment
for what competitors are doing better regarding mobile payment technology and how they
can catch up or surpass competitors. Top management should cultivate an innovative
culture and encourage employee feedback to be more spontaneous and creative in adopting
technology. Also, they should attract and retain the right human resources with competent
skills to operate the technology and keep the organisation in a highly competitive position in
the industry.
Secondly, constant interactions should exist between organisations and the end-users
(consumers) to know what consumers want and how to deliver the optimum, best quality yet
user-friendly mobile payment technology without compromising the security of the mobile
payment technology. In addition, merchants should keep in touch with the key stakeholders
to envisage what constitutes PSV by ensuring that vital strategies involving cutting-edge
technology are well communicated and deployed to facilitate easy usage of mobile payment
platforms.
Thirdly, this study also proposed that businesses effectively communicate the benefits of
mobile payment platforms to consumers. It is, therefore, crucial to inform consumers about
the lower transaction costs and safety of using smartphones and mobile devices for
payment. Vendors should also provide simple steps for mobile payment usage to users.
Moreover, adequate technical infrastructure and support, such as service centres, video
instructions and skilled personnel, should be accessible to customers to facilitate seamless
transactions. In addition, the procedures and steps of mobile payment transactions should
be communicated and accessible to consumers to enhance knowledge and awareness of the
mobile payment platform.
Fourthly, this study offers evidence of the propensity to adopt mobile payment platforms
from the perspective of Malaysia’s small business owners and managers by highlighting the
platforms’current state and challenges. The management of these firms can look for new
opportunities to encourage mobile payment by continuously introducing the latest
technologies and techniques to accelerate payment transaction activities effectively.
Fifthly, as mobile payment technology readiness and ease of use are crucial to providing
efficient mobile payment services to their customers and clients, managers and business
owners should ensure that their businesses can support the adoption and use of the system.
The implemented system should be able to limit competitors’pressures by integrating the
best features to be more compatible and have high-security features for mobile payment.
Finally, the research findings can also guide SME owners and business managers to
cultivate a supportive organisational environment by managing their technological
JSIT

resources to implement mobile payment successfully. This action would further initiate the
strategic value of the system and encourage the use of the payment system in their
businesses to assist them in managing their payments more effectively.
6. Conclusion and future research direction
This study contributes to the literature by demonstrating the relevance of the TOE
framework in explaining the adoption intention of mobile payment platforms. In particular,
the hypothesised model showed appreciable predictive and exploratory power in explaining
merchants’adoption intention of mobile payment in Malaysia. Our findings revealed that
environmental context (i.e. COP) is the most influential determinant of merchants’intention
to adopt mobile payment. Next is the technological context (i.e. TRE), followed by PEU.
Surprisingly, the organisational factor (i.e. PSV) was the least significant predictor. Hence,
we suggest future studies extend the focus on organisational factors to management support
and culture.
In terms of research limitations, this research investigates the merchants’mobile payment
platforms using the TOE model, which targets specific research samples, including retailers (i.
e. department stores, supermarkets, restaurants) and convenience stores in Malaysia. Also, the
targeted merchants are from a specific geographical location within the Klang Valley, i.e. in
Kuala Lumpur and Selangor states. Overall, due to these limitations, this research will have
some generalisability issues in other regions of the country. Besides, this study did not
explicitly investigate any particular feature/component of the mobile payment system, i.e. tool,
design and techniques. As a result, future studies could examine these specificcontextsto
know the usefulness of any particular mobile payment system. Given the nascent stage of
mobile payment platforms among merchants in Malaysia, future studies should conduct a
longitudinal study of their acceptance of mobile payment platforms. In addition, a cross-
sectional study in other parts of the world besides Malaysia can be considered by exploring
further predictors/mediators and cultural determinants.
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Corresponding author
Adedapo Oluwaseyi Ojo can be contacted at: ojo.adedapoolu@gmail.com
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