Understanding the impact of financial incentives on NFC mobile payment adoption: An experimental analysis

Abstract

Purpose

The purpose of this paper is to investigate the effects of financial incentives on consumers’ intention to adopt near field communication (NFC) mobile payment.

Design/methodology/approach

An online experiment was conducted crossing two levels of incentive types (cash back and discount), two levels of incentive amounts (5 and 10 percent), and two levels of incentive promotion periods (one and three months). A total of eight treatment conditions plus one control group comprised the 2×2×2 factorial design. A sample of 463 subjects with no prior experience with NFC mobile payment was recruited using a Qualtrics panel.

Findings

This study found that: the availability of financial incentives had a positive effect on intention to adopt NFC mobile payment; financial incentives indirectly affected intention through perceived risk; and while different types, amounts or promotion periods did not seem to matter for those in the low perceived risk group, the main effect of promotion period and the interaction effect between amount and promotion period were significant for those in the high perceived risk group.

Research limitations/implications

The study sample was limited from 18 to 35 age group, which could have affected the varied effect of the different attributes of incentives that were examined.

Originality/value

This study is the first to give some empirical evidence about the impact of financial incentives on NFC mobile payment adoption. The results provide insight to providers as well as retailers offering the incentive payment option.

Citation

Zhao, H., Anong, S.T. and Zhang, L. (2019), "Understanding the impact of financial incentives on NFC mobile payment adoption: An experimental analysis", International Journal of Bank Marketing, Vol. 37 No. 5, pp. 1296-1312. https://doi.org/10.1108/IJBM-08-2018-0229