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Abstract - Customer Loyalty Using Mobile Payment (1)

Abstract - Customer Loyalty Using Mobile Payment (1)

Determinants of Customer Loyalty Using Mobile Payment Services in Iran


Mobile payment has become one of the new services provided by the Iranian mobile banking system for the customer in the recent years. Multiple banking system including e-banking where m-payment is one of its. Constituents is in constant growth competitor in Iran. Loyal customers have always been considered the assets for any business .The aim of this study is that the theory of structures, an empirical analysis about the importance and identifying key factors that may be on customer Loyalty in mobile payment systems affect the Iranian banks, to provide it. This research mainly uses the deductive approach to the consider secondary sources and primary data, where hypotheses have been developed in order to demonstrate the findings. Seven specific topics make the factors in m-payment services, customer Loyalty and affect are more key, were selected and reviewed. This paper contributes a theoretical understanding of factors that activate the development of Customer Loyalty towards the bank. For banks the results of such findings are applied customer Loyalty development in mobile banking. To achieve this objective, 320 questionnaires for statistical analyses were provided to respondents. A total of 265 questionnaires were responded upon, coded and analyzed using Amos for analyzing the hypotheses. The perceived importance of the key factors was correlated through security, customization, usefulness, ease of use, responsiveness, perceived risk and customer satisfaction.


One promising area of mobile commerce receiving growing attention globally is mobile payment. M-payment system refers to a system using mobile devices to make transactions such as pay bills and perform banking transactions (Gerpott & Kornmeier, 2009).Mobile payment is gaining momentum, but as soon as discussions start on mobile payment solutions, concerns are raised on the security of these concepts( Kousaridas et al. 2008). Mobile Banking, as has been demonstrated, gained non-negligible relevance for banks today. Mobile Banking presents an opportunity for banks to retain their existing, technology-savvy customer base by offering value-added, innovative services. It might even help attracting new customers. Further, Mobile Banking presents a chance to generate additional revenues. An effective approach to security involves a delicate trade-off between security and customer convenience. Often customers can perceive security requirements as an inconvenience. Therefore, wireless technology has made many of the components of its mobile security approach optional. This allows banks and credit unions that select wireless payment.

technology to determine the best combination of security and convenience for their customers. The majority of security approaches today work along two lines: first, make it more difficult for an attacker to obtain customer credentials; second, make it more difficult for an attacker to use those credentials to execute a fraudulent transaction. Customer education is an important step in the first approach. A knowledgeable customer is less likely to be ensnared by phishing attempts. Similarly, a bank or credit union may eschew the use of a channel that may be used in phishing( Ondrus& Pigneur, 2004). A number of m-payment systems have recently emerged in the mobile banking field. Although various security measures and mechanisms have been designed and deployed for these m-payment systems, many security problems still intact (Hsieh 2001, Chou et al. 2004, Dai and Grundy 2007, Kousaridas et al. 2008). While the importance of brand loyalty has been recognized in marketing literature for at least three decades, the empirical validation of a loyalty model for m-commerce context has not been addressed. Mcommerce success, especially in the business-to consumer area, may be determined partly by whether consumers show loyalty to a particular m-commerce bank. Although the mobile financial services are being strongly carried forward, compared to the huge mobile phone subscriber and customer of personal financial services, users mobile financial services are still quite small. Therefore, commercial banks and mobile operators need to think about how to promote the mobile financial services is a faster and better. The manner objective of this research is to empirically examine, from the viewpoints of the consumers, the determinants that affect consumers’ perceptions of security , risk and customization. Here, the factors in consumers’ loyalty to use m-payment systems in Iran as a subset of electronic payment systems being investigated. It begins with a review of previous works in commerce and online payment systems and analyzing the influences of critical factors on the consumer’ loyalty in adopting mobile financial services. This proposed model is then explained.

Commerce and mobile payment systems

With the rapid evolution of mobile technology and an expanding base of the mobile phone users, MPS has been recognized as having growth potential in the m-commerce industry (Au & Kauffman, 2007). The industry strives to develop and build solid m-commerce applications and at the same time provide an environment for secure, convenient, costeffective, and efficient business transactions mobile commerce whit the opportunities to buy and sell products, information and services on the internet. In addition, m-payments play an important role in transactions and the lack of an effective system could hinder the success of overall m-commerce development (Goldfinger and Perrin, 2001; KhosrowPour, 2008). M-payment system can be understood as a point-of-sale payment made through a mobile device, such as a cellular phone or personal digital assistant. What makes m-payment particularly interesting is that the payment services for any retail purchases may well be provided by mobile operators and not by the established traditional banking systems, that is, MPS provides the mobile operators an opportunity to extend their business operation to the financial service area (Viehland & Leong, 2007). The m-payment industry is facing the challenge of how to design m-payment services that are useful, secure, and controllable .One of the major problems here was micro-payments, that was resolved by the introduction of e-cash systems. Apart from e-cash systems, a variety of other payment have evolved like pre-paid cards, payments via phone bills, smart cards and mobile payments. According to Heng (2004), out of 50 different cyber payments the majority have failed to gain acceptance and traditional payments are still widely used by customers. Consequently, the future of m-payment systems is hampered by many problems, most commonly noted is lack of being “fit-for-purpose” a the reason why growth is prevented.

Critical factors

The extent to which mobile businesses can build trust significantly influences the willingness of concern to make e-payment purchases. Security increases customers’ believe towards trustworthiness and privacy that increases attitude towards the internet. All these attitudes influence consumers to make mobile purchases more viable and frequent (Tsiakis and Sthephanides, 2005) Another study demonstrated that the consumers’ perceived information security and trust in m-commerce has a significant impact on the intention online purchase. The critical factors discussed during formulating the hypotheses will influence the level of satisfaction to different extents. Therefore, consumers’ attitudes towards m-payments will have its impact on the decision to use such systems. “loyalty” is a term that is hard to explain, since it is based on a person’s unpredictable behavior. However, this behavior can be explained by behavioral theories like the theory of reasoned action (TRA) (Fishbein and Ajzen, 1975) ; the subsequent technology acceptance model (TAM); (Davis, 1989; Bagozzi et al., 1992) ; innovation diffusion theory factors that affect perceived usefulness and ease of use (Davis et al., 1989) ; theory of planned behavior and factors that affect the loyalty of m-payment. Thus, customer loyalty here was considered bi-dimensional, including both attitudinal commitment and behavioral re-purchase intention. Based on prior studies, Kuisma et al., 2007; Cheng et al., 2006) customer loyalty is defined as the customer’s favorable attitude toward an mobile payment services, resulting in repeat purchasing behavior. The research model postulates seven constructs (security, customization ,usefulness , ease of use ,responsiveness , perceived risk and customer satisfaction) that determine customer loyalty.


The theories of innovation diffusion, planned behavior , satisfaction of e-payment , social influence, security and the perceived resources are applied in this study to investigate customer loyalty in m-payment systems. The research model (Figure 1) combines topics of (1) Security, (2) Customization, (3) Usefulness, (4) Ease of use , (5) Responsiveness , (6) Perceived risk , (7) Satisfaction

Customer Loyalty Using Mobile 01

Chart 1. Research Model

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Ref :

Prof. Dr.Ali Sanayei, Prof.Dr Bahram Ranjbarian, Dr.Ali Shaemi, Azarnoosh Ansari: INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS, VOL 3, NO 6 (2011)