Abstract

The advancement of e-wallet systems, including Alipay, has led consumers to embrace digital payment
with financial technologies. Yet, limited research focused on the usage of e-wallets in the context of
emerging economies. This research is aimed at investigating the predictors of consumers’ use behavior
of the Alipay e-wallet system in an emerging market and moderating role of perceived trust and
perceived service quality on this relationship. The technology acceptance model (TAM) and the theory of
planned behavior (TPB) were applied as the guiding principle. Data gathered via online surveys among
378 Malaysian Alipay users were analyzed using the partial least square-structural equation modeling
(PLS-SEM) approach. The results reveal that all hypotheses were significant towards consumers’
intention to use Alipay in an emerging market except for the moderating role of perceived trust.
Perceived usefulness was the strongest predictor factor towards consumers’ intention to use Alipay in
an emerging market. This is followed by perceived ease of use. They heavily emphasize the superiorities
of Alipay over other e-wallet systems such as efficiency and convenience for conducting financial
activities. This study contributes to the existing literature by proposing a comprehensive integrated
research model. The research outcome can serve as a guideline for service providers towards enhancing
consumers’ adoption of e-wallets for digital payment with financial technologies.

1. Introduction

The rapid evolution of information and communication technology (ICT) has decisively influenced human
lives [1]. Due to ICT’s penetration, the financial sector’s landscape has been enormously transformed
[2]. With the availability of numerous mobile applications, consumers are encouraged to move beyond
traditional transactions, embracing electronic payment such as the transition from physical cash to
online payment such as electronic wallet (e-wallet), also known as a digital wallet [2–5]. e-wallet is
considered a mobile application, which is installed on users’ mobile phones, enabling users to store
money or link with bank accounts, conducting financial activities without bringing cash or credit card [6,
7]. For instance, while using e-wallet applications, the payment can be processed by scanning a quick
response (QR) code [8]. Examples of online transactions include Alipay, GrabPay, Touch n Go e-wallet,
and Boost [9]. The beneficial features such as convenience, security, time-saving, and effort-saving have
led many countries to adopt e-wallets as one of their payment methods [10, 11].

This research concentrates on the largest e-wallet platform in the world that is Alipay, which is also
acknowledged as the third-party payment platform in China [12]. Over decades, the number of
registered users of Alipay has rapidly risen. As reported by Big Data-Research Consulting, 2019, the
active Alipay users reached 540 million people in 2018 [13]. In the China context, 90% of the domestic
market has been dominated by two digital payment giants, Alipay and WeChat Pay. In the first quarter
of 2018, Alipay transactions accounted for 49% while WeChat Pay occupied 40% [14]. Malaysia, as one
of the emerging economies, with 42 e-wallet licensed operators [15], has over 18000 merchants who
adopted Alipay nationwide [16]. In addition, Alipay has reached collaborations with domestic prominent
banks including Maybank, Public Bank, and CIMB bank, building partnership with Touch n Go (TNG) to
implement the e-wallet system [3, 17].

Despite the use of electronic-based payment has been constantly increasing, little is known in terms of
the adoption of its services by users [18]. In a similar vein, [19] stressed that several literatures
contribute to the investigation of privacy, risk, and security of digital payment systems; however, fewer
studies specifically analyzed the user’s attitude towards usage of digital payment. [20] suggested an
additional construct such as trust, commitment, and consumer satisfaction between behavioral
intention and use behavior for boosting the association due to behavioral intention of consumers which
is not the single antecedent that contributes to consumer behavior. On the other hand, while perceived
service quality has been used as a strong moderator of predictors and continued intention of mobile
money, whether and how the moderator can intervene both behavioral intention and use behavior is
unwell known [21]. Accordingly, the moderating variables are suggested to adopt between behavioral
intention and use behavior. This is because the intervening constructs can transform the intention-
behavior relationship [20]. Moreover, limited empirical research has been carried out to examine the
intention of users to adopt digital payment in emerging contexts [18]. Indeed, as research on predictors
affecting e-wallet adoption is limited in the context of Malaysia, it is notable to determine the factors
and their effect on the adoption of e-wallets from the viewpoint of Malaysian users [22, 23]. To promote
the adoption of e-wallets and construct a cashless society, an initiative was launched by Bank Negara
Malaysia (BNM), to introduce the Financial Sector Blueprint (FSBP) 2011-2020, as the incentive of the
online payment agenda in Malaysia by the year 2020 [24]. Besides, the Malaysian government proposed
the RM 30 eTunai Rakyat initiative, encouraging Malaysians to receive RM 30 worth of e-wallet credit.
Similarly, e-wallet service providers carried out a sequence of promotions such as coupons, cashback,
and rebates [25]. Yet, according to the 2019 Nielsen report, although 88% of Malaysians are familiar
with e-wallets, only 10% of Malaysians use them as a payment method. Thus, the adoption rate of e-
wallets kept low in Malaysia [6]. Accordingly, this research is aimed at investigating the predictors of
consumers’ intention to use the Alipay e-wallet system in an emerging market and moderating role of
perceived trust and perceived service quality on this relationship. The theoretical principles of the
technology acceptance model (TAM) and the theory of planned behavior (TPB) were integrated into the
proposed model to understand the phenomenon.