Assurance on the Reliability of Mobile Payment System and Its Effects on Its’ Use: An Empirical Examination

Mobile Payment Systems (MPS) such as Google Wallet are an emerging technology. This paper examines if mobile assurance as provided by examining the five criteria, namely security, availability, processing integrity, confidentiality and privacy (as per the Trust Framework by the American Institute of Certified Public Accountants (AICPA)) has any relationship with use of MPS. The theory used for this study is technology acceptance model (TAM). Some new measures were developed and validated. The data was collected by a survey and Structure Equation Model was used to analyze the data collected. The results of the study indicated that security, availability, processing integrity, confidentiality and privacy has a positive relation with the attitude towards use mobile payment system. The results of the study data suggest that mobile assurance using any of the trust services correctly predict the intention to use such Mobile payment systems. The contribution of this study is that this paper extends the TAM model to include the trust framework with an emerging technology such as MPS. Another contribution of this study is to provide empirical support in favor of engagements to provide assurance on the reliability of mobile payment system by public accounting firms and practitioners (using any of the Trust Services Principles and Criteria) to have a positive impact of its use. Strategy Webtrust, Systrust, Mobile payment systems, Mobile Assurance, Trust, Reliability 1 Correspondence address Priyanka Meharia, Assistant Professor, Eastern Michigan University, Office: 300 West Michigan Avenue, 514 Gary Owen Building, Ypsilanti, Michigan 48197, USA, E-mail: pmeharia@emich.edu , Phone : 734-487-1934  Accounting and Management Information Systems Vol. 11, No. 1 98 INTRODUCTION Mobile payments are payments for goods, services, and bills with a mobile device (such as a mobile phone, smart-phone, or personal digital assistant) by taking advantage of wireless and other communication technologies (Dahlberg et al., 2008). Mobile payment is defined as payment for products or services between two parties for which a mobile device, such as a mobile phone, plays a key role in the realization of the payment (Bailly, 2007). Mobile devices can be used for the payment for digital content (e.g., ring tones, coupons, logos, news, music, or games), auctions, tickets, parking fees and transport fares, or to access electronic payment services to pay bills and invoices. Payments for physical goods are also possible, both at vending and ticketing machines, and at manned point-of-sale (POS) terminals. The business technology research and advisory firm, the Aite Group, predicts an exponential surge in demand for point of sale payment systems, which enable mobile phone payment (Aite, 2011). Aite Group is predicting 214 billion dollars in mobile phone payments by 2014 in the United States (Aite, 2011). More and more businesses are accepting mobile phone payments, such as Starbucks (Grove, 2011) and Target (Harnick, 2010) and many banks already enable customers to use an application on smartphone devices to take a picture of a check, which is then used to make a deposit into the consumer’s account. Also big players in the E-commerce business are setting up mobile payment system such as Paypal, Google, and Amazon (Amazon, 2011). Mobile phone service providers, Verizon, AT&T, and T-Mobile are also getting involved in mobile payments through a service called ISIS (Isis, 2011). Paypal will utilize mobile applications that will bypass the need for near field communication equipment, presumably making it easier for businesses to incorporate mobile payments into retail operations (Kim, 2011). Google Wallet requires the use of a special chip on the mobile phone that enables the phone to communicate with a near field communication reader, to transmit the credit card and coupon information with a tap of the phone to the reader. While tapping a phone to a reader isn’t substantially more convenient than swiping a credit card, the Google Wallet application on the phone can store not only all of one’s credit cards, but also coupons, special deals, and loyalty rewards (Pogue, 2011). Mobile payment services may complement or replace traditional payment services such as cash, cheques, debit cards and credit cards. However, before this proliferation of mobile payment services takes place, research needs to be done to identify the valuable properties that traditional payment services do not have, and that Mobile payment services may need to offer (Dahlberg et al., 2008). The principal objectives of this research study are to empirically examine, What external variables related to mobile payment services could accelerate the proliferation/use of mobile payment services? The theory used for this study is technology acceptance model (TAM). Some new measures were developed and validated. The data was collected by a survey from 276 respondents and Structure Assurance on the reliability of mobile payment system and its effects on its’ use: an empirical examination Vol. 11, No. 1 99 Equation Model was used to analyze the data collected. The contribution of this study is that this paper extends the TAM model to include the trust framework with an emerging technology such as MPS. Another contribution of this study is to provide empirical support in favor of engagements to provide assurance on the reliability of mobile payment system by public accounting firms and practitioners (using any of the Trust Services Principles and Criteria) to have a positive impact of its’ use. The remainder of the paper is organized as follows: In the next section the theoretical background for this research is discussed. In the third section the literature is reviewed and the hypothesis is developed. In the fourth section methodology is analyzed and in the fifth the results are presented. Finally, in the sixth section the paper concludes by discussing the outcomes of the survey. 1. THEORETICAL BACKGROUND Mobile payment systems (MPS) are in the process of being developed, tested, and improved so as to gain wide consumer acceptance. Currently, with e-commerce payment systems, credit card use is the principle intermediary of payment (Kim et al., 2010). While some research regarding the adoption of MPSs and modifies them to ascertain acceptance of new technology, such as the acceptance of mobile payment systems. This study will use the TAM model to predict the hypothesis related to what external variables related to mobile payment services could accelerate the proliferation/use of mobile payment services? As seen in Figure 1. Perceived ease of use and perceived usefulness are the two core variables that are measured to determine an acceptance of a computer technology according to TAM developed by Davis.