Adoption of digital transaction model by micro enterprises to target millennials in India: An exploratory study
Authors: Chopra Anjali , Ranjani K. S. 
Published: June 2020

Purpose: The purpose of this paper is to understand the factors that significantly influence adoption of technology solutions by micro businesses. This study incorporates constructs from TAM (Technology Adoption Model), TPB (Theory of Planned Behaviour) and transaction cost which include variables such as perceived ease of use, perceived risk, subjective norms, and transaction cost. A confirmatory factor analysis using AMOS 20 was conducted to measure different aspects of intention to adopt digital solutions, followed by structural equation modelling. A sample of 130 micro enterprises in Mumbai was surveyed to understand intentions towards digital adoption. The study identifies perceived ease of use, peer influence and transaction costs as significant factors that drive intention to adopt digital transactions, while perceived risk was not found to be significant. The proposed model and the results of the study have useful implications, not only for marketers of digital payment solutions, but also for policy makers.Design/methodology/approach: The latent constructs were measured using standardised scales. Statistical techniques, like descriptive statistics and confirmatory factor analysis, along with structural equation modelling, were used. Two-stage research was conducted whereby stage one involved exploring the various dimensions of TAM, TPB and transaction costs through in-depth interviews. This was followed by conducting a large-scale quantitative exercise to test the proposed model.Findings: Intention to adopt was measured by willingness to recommend digital payment to others and willingness to increase digital transactions. The results show that micro businesses’ intentions to adopt technology-based solutions was determined primarily by the perceived ease of use of the technology followed by subjective norms, which indicated the role of peer influence on the choice of technology solution. Reduction in transaction costs was found to be a significant factor in adopting technology-driven solutions, while risk associated with technology use was not significant.Limitations: The study was restricted to Mumbai city. A larger sample across multiple cities could have given many more insights regarding the level of differences in intention to adopt digital transactions.Implications: Digital inclusion facilitates transaction settlement using a digital medium linked to a bank account. The transformation from digital inclusion to financial inclusion is relatively easy, and hence could be impactful in the scaling up of micro enterprises. Additionally, digital payment strategies tailored for micro enterprises can be directed towards driving customer loyalty, customer engagement, repeat purchasing, cross-selling, and up-selling opportunities for the micro enterprise segment of the market.Contribution: This study uses the micro enterprise segment, a hitherto under researched segment. The proliferation of mobile phones and their application for technology adoption makes this study extremely useful in the context of developing economies for both marketers and policy makers, especially in the micro enterprise segment.