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One of the most striking experiences for first time visitors in China, much to their chagrin, is that neither their recently exchanged Chinese currency at the airport nor their debit or credit cards are accepted by most businesses. The Wall Street Journal’s report that even beggars encourage being paid with mobile phone payment apps (Abkowitz, 2018; Lo, Li, & Chan, 2019) is an everyday reality that has made the Chinese society almost cashless. Mobile phone payment (Mpay) usage rates in China is one of the highest in the world (Shen, 2018) and consumers carry out most business transactions, ranging from small deals at the street vendor level to big businesses using mobile phone payment. This high Mpay usage rates have allowed China to almost become a cashless society with all the benefits that come with it, such as the safety and security of funds, convenience, and ease of use associated with carrying less cash and speedier transactions (Lo et al., 2019).
Mobile phone payment has almost replaced cash, debit, and credit cards in China. In 2016, mobile phone payment transactions in China were US$ 8.6 trillion compared to US$ 63 billion in the US—a difference of nearly 140 times. Developed countries, such as the US, Japan, and European Union, have higher usage rates of mobile phones but lower adoption rates of Mpay. To understand why similar mobile phone payments did not develop in other countries as Mpay adoption did in China, we conducted this exploratory research to discover the principal factors for Mpay’s adoption success in China. In fact, the economic growth impact of mobile phone payment system to the economic growth of a country like China is immense and there is a strong correlation between telecommunications improvements and economic growth (Roller & Waverman, 2001). Improvements in telecommunications infrastructure helps in the expansion of digital business and electronic commerce and, consequently, contribute to economic growth (Moulton, 2000). The popularity of Mpay in China could have contributed to a higher level of economic activities with a visible impact on economic growth; many small startups in China are a direct result of the high Mpay adoption rates for selling their products and services directly in online platforms (Ferguson & Pennink, 2010; Moulton, 2000). In addition , mobile payment is secure and easy to use and shortens the transaction time and the availability of the cash, thus Mpay effectively increases economic performance, which in effect helps businesses small and big to focus their resources on their core businesses rather than dealing with banking activities (Lo et al., 2019).
This study was motivated to discover the factors behind the large scale Mpay adoption in China that cannot be solely explained by the existing theories of technology adoption (Venkatesh, Thong, & Xu, 2012; V. Venkatesh, Morris, Davis, & Davis, 2003). Even though, there are many areas of convergence between our proposed four factors model and that of technology adoption models such as ease of use, convenience and utility that can partially explain the consumer side Mpay adoption in China as well. The original contribution of this paper is to present an integrated model of Mpay adoption with the development of the scales for measuring this phenomenon primarily from the consumer perspective. The major contributions of this study to the ecommerce and digital business field is the identification of new factors, namely the role of concerted government effort in the adoption of new technologies for economic development perspectives. Our findings indicate that, from a consumer perspective, four major factors are essential for the wider adoption of Mpay proliferations in China and its usage: a) favorable government regulatory framework or lack thereof and b) government fostering and promotion in the early nascent stages of the fintech innovation, c) simplicity of the technology, and d) the cost savings and conveniences to the consumer. However, a government support with favorable supervisory climate and sponsorship is an important catalyst that offers the consumers, especially in this Chinese context, the confidence that mobile payment system is safe and secure, thereby, leading to the increased use of Mpay for consumer transactions.