Chapter 1

THE PROBLEM AND ITS SETTINGS

INTRODUCTION
As new technologies grow, mobile payments are being adopted by the operations of
small and medium-sized businesses. Mobile payment is an alternative business solution for
financial services that can be accessed using mobile devices (Merhi et al., 2019). E-payment
systems that are readily accessible via mobile phones and do not typically necessitate a
bank account are prevalent in the Philippines (Vuvan, 2020). GCash and PayMaya are
examples of systems that facilitate the use of digital payment platforms by Filipinos.
Therefore, several small and medium-sized retail businesses in the Philippines have
adopted mobile payment as a regular practice, applying it into the new normal.

According to the latest record of the Philippine Statistics Authority, a total of

1,080,810 business enterprises operate in our country. Of these, 99.58 percent are micro,
small, and medium enterprises (MSMEs). Small and medium-sized companies (SMEs) are
businesses that have less than 200 employees and assets valued at less than Php100
million. SMEs are widely recognized as the fundamental support of the economy due to their
significant contributions to the gross domestic product (GDP) and employment creation
within the country. According to the Department of Trade and Industry (DRI), MSMEs
contribute 45 percent to the gross domestic product, MSMEs also provide employment to 85
percent of the country's workforce. As part of digitization, many business facilities are using
mobile payment systems to facilitate the collection, transmission, and receipt of payments
from customers and business partners. In the same way, mobile payment enables small and
medium-sized enterprises (SMEs) to compete effectively with larger corporations. (Bello et
al., 2019)

Despite the growing importance of digital transactions globally, many small and
medium enterprises in the Philippines continue to rely on traditional cash-based payment
methods. (Melo, 2020). The lack of e-payment adoption among SMEs in the Philippines
presents many challenges that impact the country's economic situation. The absence of e-
payment options hinders SMEs' ability to compete effectively in the digital economy,
constraining their growth potential and financial inclusion (Skimes, 2019). Addressing these
barriers and promoting e-payment adoption among SMEs in the Philippines is essential for
fostering economic development, enhancing financial inclusion, and empowering small
businesses to thrive in an increasingly digital world.

Thus, this study aims to bridge the existing gap by examining the adoption of e-
payment systems among MSMEs at the Alfonso Public Market. In this study, the researchers
will use the five key elements of the Technology Acceptance Model to provide an
understanding of the factors that influence the adoption of e-payment systems in MSMEs in
the Alfonso Public Market. The five key elements of the TAM are Perceived Usefulness,
Perceived Ease of Use, Attitude, Behavioral Intention, and External Variables. The
proceeding page of this paper will show you the underlying questions designed to gather
information and understanding regarding the adoption of e-payments in the specified area.

THEORETICAL FRAMEWORK

The Technological Acceptance Model, a theory made by Fred Davis and Richard
Bagozzi (1992) defines the Technology Acceptance Model (TAM) as an information systems
theory that explains how users come to accept and use technology. It posits that actual
technology use is directly determined by an individual's intentions to use the technology.
Additionally, the TAM incorporates factors like perceived risk and perceived trust, which can
influence users' intentions to adopt a specific technology. TAM has been widely applied in
various contexts to understand and predict user behavior towards new technologies, making
it a valuable framework for studying technology adoption and acceptance.

The Technological Acceptance Model (TAM) focuses on factors influencing the

acceptance and use of technology by individuals. There are five key elements of the TAM:
Perceived Usefulness, Perceived Ease of Use, Attitude, Behavioral Intention, and External
Variables. Perceived Usefulness refers to the belief that using a technology will enhance
performance or make work easier. Perceived Ease of Use relates to the belief that using a
system will be effortless. Attitude influences behavioral intention, which signifies an
individual's readiness to engage in a specific behavior. External variables, such as social
influence, play a significant role in shaping attitudes toward technology and subsequent
intentions to use it.
Conceptual Framework

INPUT PROCESS OUTPUT

Demographic Profile of Collection of Determine the

the vendors MSMEs Vendors’ Profile of the
 Name of business Profile Respondents
 Date of
Commencement The factors that
 Amount of Initial Gathering, influence the
Capital Presenting, adoption of e-
 Average Income Analyzing, and payment system
Interpreting Data among MSMEs at
Factors that influence the through an Onsite Alfonso Public
adoption of e-payment and Online Survey Market
systems in terms of:
 Perceived
Investigating the Conclusions and
Usefulness
factors that Recommendations
 Perceived Ease of
influence the
Use
adoption of e-
 Attitude payment system
 Behavioral among MSMEs at
Intention Alfonso Public
 External Variables Market

FEEDBACK

Figure1. Research Paradigm

Figure 1 shows the variables and methods to determine the factors that influence the
adoption of e-payment systems among market stalls at Alfonso Public Market.

Input contains demographic profiles of the respondents such as name of the

business, date of commencement, amount of initial capital, average income. The factors that
influence the adoption of e-payment systems in terms of perceived usefulness, perceived
ease of use, attitude, behavioral intention and external variables.
 Process is how the researchers used the input to attain the output. The process
consists of the self-made questionnaire, collection of market stall vendors’ profiles,
gathering, presenting, analyzing, interpreting data through an onsite survey, and
investigating the factors that influence the adoption of e-payment systems among market
stalls at Alfonso Public Market.

Output is what the researchers wanted to attain from the study, which is to determine
the profile of market stalls vendors, the factors that influence the adoption of e-payment
systems among market stalls at Alfonso Public Market.

STATEMENT OF THE PROBLEM

1. How do demographic factors affect the adoption of e-payment systems among

market stall vendors at Alfonso Public Market in terms of:

1.1. Name of business

1. 2. Date of Commencement

1. 3. Amount of initial capital

1.4. Average income

 Daily

 Weekly

 Monthly

 Annually

2. What are the respondent’s assessments of the factors that influence the adoption of
e-payment systems in MSMEs in Alfonso Public Market in terms of the following
variables:

2.1. Perceived Usefulness

2.2. Perceived Ease of Use

2.3. Attitude

2.4. Behavioral Intention

 2.5. External Variables

3. Is there a significant difference in the respondents' assessment on the factors that

influence the adoption of e-payment systems when grouped according to profile
variables?

HYPOTHESIS

Ho: There are no significant differences in the respondents' assessment of the

factors that influence the adoption of e-payment systems when grouped according to profile
variables.

Ha: There are significant differences in the respondents' assessment of the factors
that influence the adoption of e-payment systems when grouped according to profile
variables

SCOPE AND LIMITATION OF THE STUDY

This study focuses on the adoption of e-payment systems among stallholders at

Alfonso Public Market, aiming to assess awareness, usage, and perceptions of these
systems, identify key factors influencing their adoption, and understand demographic
correlations with e-payment usage. Utilizing a quantitative approach with surveys from 100
stallholders, it examines perceived benefits and barriers, and the impact of demographic
factors such as age, education level, and business size.

SIGNIFICANCE OF THE STUDY

The researchers believed that this study would play a vital role in deepening the
understanding of mobile payment adoption among SMEs in the Philippines, highlighting its
broader significance for economic development and digital transformation in emerging
markets.

The result of this study may be significant to the following:

Consumer. It helps consumers comprehend the benefits of e-payment

systems, such as convenience, security, and efficiency, thereby encouraging their
adoption and integration into daily transactions. E-payment systems can facilitate
financial inclusion by providing access to digital payment options for consumers who
may not have access to traditional banking services, thus bridging the gap between
different socio-economic groups.

Society. The study contributes to societal advancement by promoting

financial inclusion and digital literacy. By identifying the factors that influence the
adoption of e-payment systems, it helps bridge the gap between traditional and
digital economies.

Businesses. It can lead to more informed decision-making regarding

technology investments, operational efficiencies, and customer engagement
strategies. It can help businesses tailor their services to meet the needs and
preferences of MSMEs, potentially unlocking new market opportunities and fostering
growth in the digital economy.

Future Researchers. This study lays the groundwork for future research by
providing a detailed analysis of e-payment system adoption in a specific market
context. Future researchers can build on this work by exploring similar factors in
different markets, conducting studies to observe changes over time.

DEFINITION OF TERMS

Convenience. It means ease of use, speed of transactions, wide acceptance, and

seamless integration into daily life.

Electronic payment. An e-payment account is a way to send and receive money

online without needing your credit or debit card details.

Market Stalls. Refer to small businesses or vendors operating within the Alfonso
Public Market who sell goods or services to customers.

Point-of-sale Device Availability. It refers to how easy it is for consumers to find

places where they can use e-payment systems.

Reliability. Refers to consistent performance and rarely minimal downtime, making

the system dependable.
 Risk. Refers to concerns about data breaches, fraud, and technical glitches, affecting
consumer's trust.

Security. It involves data protection, fraud prevention, regulatory compliance, and

infrastructure security to build consumer trust and encourage usage.