This chapter looks at the various studies that have been conducted on mobile money service and its adoption. The chapter is categorised under theoretical review, empirical review and the conceptual framework. The chapter also explains some basic terms used in the study, the Technological Acceptance Model (TAM) is fully discussed in relation to the relevance of the study.
2.1 Basic definition of terms
2.1.1 Mobile Money Service
This is the application of mobile phone device to undertake financial transactions electronically. It is common in many countries and allow users to save, send, and receive money to and from relatives and also make payments of goods and services (World Bank, 2018). This services delivered through the mobile money application is now a viable alternative to those who do have access to formal banking service.
According to Cheney, (2008) mobile money service is the term use to explain array of financial services conducted using mobile phone gadgets. Mobile money typically offers four basic service according to Davidson & Penicaud (2011) are referred to as functional transactions. These services are sending of fund, payment of bills, receiving of funds and the buying of airtime. The rural unbanked population now uses mobile money service to engage a more general financial activities that would not have been possible without the use of the mobile phone technology. In Ghana, there are three Mobile Network Operators (MNO) providing the mobile money services and these are Airtel/tigo, MTN, and Vodafone. MTN Ghana controls the largest share in the mobile money market with MTN came on top as having the largest share of deposits, accounting for more than 90 percent of mobile money accounts held at commercial banks. MTN as at October 2017 had GH¢2.1 billion representing 93.5 percent of deposits held at commercial banks. Airtel/Tigo followed with GH¢79 million accounting for 3.56 percent share of the deposits. Vodafone had 2.52 percent of the market share with GH¢57 million deposits (BoG, 2018).
It is imperative therefore to define mobile money service as the use of mobile phone technology for the movement of funds from one mobile wallet to another. Thus, it is a platform that allows mobile phone users to transfer money electronically from one person to another using mobile phone gadgets.
2.1.2 Mobile Money and Electronic Money
Mobile money is quite different from electronic money (E-Money). Electronic money is the elaborate form of money which are stored on credit cards, debit cards, ATMs, E-Zwichs together with those funds on the mobile money wallets. Mobile money is therefore an aspect of electronic money which refers to the use of mobile phone integrated technologies to carry out financial transactions. The mobile money is not actually tangled with bank accounts of individual but through the MNO who creates an account using the Subscriber Identification Module (SIM). Mobile phones are now common and the prevalent use of it has led to increasing number of people hooking unto the mobile money platform, especially the rural low income earners who are neglected by the traditional banking services.
According to GSMA report, (2017) the percentage of adult population with mobile money accounts has moved from 13% to 39% within a period of four years. Mobile money is gradually taking overtaking the access to formal banking services since only 34% of Ghanaians have bank accounts yet 39% of the population have mobile money accounts. To close the rural- urban divide on access to financial services, mobile money is then the needed platform to reach out to the rural unbanked with financial access.
2.1.3 Mobile Money Interoperability (MMI)
Like the formal banking transfer system, the MMI enables users on the mobile money platforms from different MNO to transfer and receive funds directly from one another at ease. The MMI is a cross network transaction that lowers the cost of transaction and also drives the prospects of attaining financial inclusion (Fintech, 2018). With this service, users of mobile money can simply transfer funds from their mobile money wallet to those on mobile money platform with different Mobile Money Operators (MMOs). Mobile money users with bank accounts can also transfer funds from their mobile money wallet to their bank accounts (W2A) and can as well transfer funds from their bank accounts unto their mobile money wallet (A2W). The MMI was launched in Ghana on the 9th of May 2018 following that of Tanzania and Kenya. The novelty of this service is aimed at enhancing the payment system in Ghana thereby helping to achieving financial inclusion through the use of the mobile money service. With this, the rural unbanked population will have an alternative in mobile money service to the formal banking service which is not available to them.
2.1.4 Mobile Money and Financial Inclusion
Globally, it is believed that almost 2 billion people lack access to formal banking services. And this is not different in Ghana and the rest of the sub-Saharan Africa. The advent of mobile technology has made it possible for most countries in Africa to have access to financial services at ease and at lower cost through the mobile money services. The mobile money is now seen as a driving force to achieving financial inclusion. The GSMA report (2016) indicated that the working population in Kenya and Tanzania have mobile money accounts more than that of bank accounts. Ghana is gradually following that pace with most of the rural population registered to the mobile money platform than that of bank accounts.
According to the report by Global Financial Development (GFD, 2014) financial inclusion is the proportion of people and firms that have access to formal financial service. The ability of the individual to have suitable access to financial service is paramount, and without this the person is referred to as financially excluded. Financial exclusion in Ghana is very high especially in the rural areas where there are limited number of financial institutions and people living in these rural areas are normally low income earners who are neglected by the formal financial institutions. The access to formal financial services has a role in enhancing wealth, promoting growth and achieving sustainable development. Also, access to financial service is a vital factor in enhancing the living standard of the rural people and this translates to the growth of the economy since in most cases the development of an economy is dependent on the rural market which normally has the greater proportion of the population.
Ahiabenu (2010), put it that the use of mobile money service is taking place in isolation but in parallel with the advent and expansion of other financial electronic payments services. This expansion has positive influence on the number of people who can access the basic financial services in the country. Ahiebenu further explained that mobile money provide a safe and secure way for one to transact business in more friendly and cost effective manner. With mobile money, people no longer travel to far distance to have access to financial products.
Data from the Central Bank of Ghana indicates that there has been an exponential growth with the adoption and use of the mobile money service since its inception in 2012. This growth does not only reflect on the registered users on the mobile money platform, but on the volume and the value of transaction carried out within the period of five years. This means that the mobile money service has the potential of expanding the economy to a greater height when proper attention is given to it since the mobilised funds are kept by the commercial banks who are partners to the mobile money services.
Table 2.1 Bank of Ghana Mobile Money statistic 2018
Indicators 2012 2013 2014 2015 2016 2017 Jan-Mar
2018 2018 % Growth
Total number of mobile voice subscription (Cumulative) 25,618,427 28,026,482 30,360,771 35,008,387 38,305,078 37,445,048 37,445,048* 4.65
Registered mobile money accounts (Cumulative) 3,778,374 4,393,721 7,167,542 13,120,367 19,735,098 23,947,437 25,306,085 23.44
Active mobile money accounts 345,434 991,780 2,526,588 4,868,569 8,313,283 11,119,376 11,248,758 21.45
Registered Agents (Cumulative) 8,660 17,492 26,889 79,747 136,769 194,688 217,974 51.99
Active Agents 5,900 10,404 20,722 56,270 107,415 151,745 161,317 38.31
Total volume of transactions 18,042,241 40,853,559 113,179,738 266,246,537 550,218,427 981,564,563 312,926,881 57.86
Total value of transactions (GH¢’million) 594.12 2,652.47 12,123.89 35,444.38 78,508.90 155,844.84 52,352.80 68.68
Balance on Float (GH¢’million) 19.59 62.82 223.33 547.96 1,257.40 2,321.07 2,221.91 49.39
Even though the mobile money service has achieve its feet in Ghana, the adoption still remains slow especially in the rural areas and this may partly be as a results lack of information, poor network quality, cost of the services, technicalities is usage, accessibility, peer influence and cultural phenomenon. According to the World Bank, (2015) the rural population in Ghana as at 2014 stood at 12,484,698 and only 40% of this have access to the mobile money accounts compare to 60% adoption by those living in the cities. This requires further attention to be given to those dwelling in the rural areas to help drive to the mainstream financial services and mobile money can is the catalyst in achieving that.
2.1.5 Banking the Unbanked in Ghana
2.2 Technology Acceptance Model (TAM)
The mobile money service is a technology procedure and medium through which people make transactions. Studies show that the acceptance of the mobile money service depends on how well people can use the mobile money procedures. People adopt the mobile money service base on the benefits they assume to get for hocking up on the platform. This research is based on the factors influencing the adoption of mobile money service and uses the Technology Acceptance Model (TAM). TAM is a hypothetical model that explains how users come to accept and use a technology, Davis (1989). The model suggest that when an individual is presented with a new technology, several factors determines the decision whether to accept and use this new technology or refute it. The TAM is recognised on the grounds that the construct, perceived usefulness and perceived ease of use are central variables that defines system adoption and use (Davis, 1989). These two variables build a positive outlook or target toward using an IT system. Consequently, the TAM has been selected as the most suitable model for the study and has therefore been modified to include other variables such as payment, transaction cost, and peer influence on mobile money adoption as indicated in figure 2.2.
Figure 2.1: The Technology Acceptance Model (TAM)
952505715Perceived Ease of Use (PEU)
Perceived Ease of Use (PEU)
124777510795Actual system Usage
Actual system Usage
20097756350Perceived Usefulness (PU)
Behavioural Intention of Use
Perceived Usefulness (PU)
Behavioural Intention of Use
Source: Davis et al (1989)
2.2.1 Perceived Ease of Use
Davis (1989) defined perceived ease of use a degree to which a person believes that using a particular system will be free of effort (Davis, 1989). It has a positive influence on the adoption of mobile money service in the sense that when people believe that the use of a new technology is stress-free, it informed their decision as to accepting it use. The perceived ease of use will lead to developing an attitude of usage and the intention of adoption which leads to the actual usage. In MMS, the perceived ease of use relates to the system registration, steps in making payments, and technicalities in usage. Perceived ease of use is influenced by the other variable in the model, the perceived usefulness.
2.2.2 Perceived Usefulness
Perceived usefulness has an effect on the demand for mobile money services. It is essential for financial service to be convenient and this influence the people perception on the benefits of the mobile money services. As explained by Davis (1989) the level at which an individual assume the usefulness of an application will help achieve certain level of patronage. This can be measured through the number of people using the service and the benefits they gain from relying on it. Convenient, secured and safe MMS is desirable for users. MMS provides users with accessible and portable financial services which makes financial transactions look simple.
2.2.3 Conceptual Framework
From the reviewed literatures and for the purpose of this study, the conceptual framework consist of the factors influencing the adoption of mobile money service bas on the TAM methodologies with little modification which includes payments, transaction cost and peer pressure together with the traditional variable perceived ease of use as independent variables and adoption of mobile money service as dependent variable.
Ease of Use (EU)
Adoption of the Mobile Money Service
Ease of Use (EU)
Adoption of the Mobile Money Service
Figure 2.2: Conceptual framework base on TAM
Source: Davis et al., (1986) modified to suit the research objectives
The framework shows that users’ adoption of mobile money service is jointly influenced by their ability to make payments (PMT), easiness of use of the service (EU), Peer pressure (PP) and the associated transaction cost of usage (TC).
Venkatesh and Davis (2000) recommended the addition of other variables in the TAM based model to assess their impact on a principal theories being determined. The proposed model integrate the original TAM variables, which are the perceived usefulness (PU) and the perceived ease of use (EU) with external variables PMT, TC and PP. The payments (PMT) and the Transaction Cost (TC) have direct influence on the perceived usefulness, which in turn has an influence on the adoption of mobile money service. Ease of use (EU) and Peer Pressure also have a direct influence on the adoption of mobile money service and these are explained further in this chapter.
From the framework, the following research model came up;
Y = ?0+ ?1EU+ ?2PMT+ ?3TC+ ?3PP+ ?
Where Y is the dependent variable, the adoption of mobile money service
EU is the perceived ease of use
PMT is the payments
TC is the transaction cost
PP is the influence of peer pressure and
? is the error term.
2.3 Empirical studies on TAM and Mobile Money Service
This section looks at previous work done on factors influencing the adoption of MMS. Zikmund et al (2010) explained that empirical literature review is a focused exploration of available work that has been done on the subject of study. It is a broad survey of previous studies related to the research questions.
TAM is a well-tested and certified and it is generally recognised model with the ability to be modified to include other variables or constructs (Venkatesh and Davis 2000; Omwansa et al 2012; Masinge, 2010). The model is generally accepted because of its briefness and succinctness (Alroaia et al, 2011).
A number of studies have used the technology acceptance models (TAM) to determine it influence on the adoption of mobile services. Most of the studies used the original TAM constructs together with other variables like attitude, accessibility, risk and social influence on MMS adoption.
2.3.1 Perceived Ease of Use (EU)
2.3.2 Payments (PMT)
2.3.3 Transaction Cost (TC)
2.3.4 Peer Influence (PP)
2.4 Research Gap
Evidence from the literature review shows that the Perceived usefulness and the perceived ease of use are not sufficient; they may not properly describe it influence on people adoption of the mobile money service in every context especially in rural areas. This makes it necessary to add other factors that can give further explanations to the adoption of the MMS by prospective users. The various literature reviewed showed various gaps this research seeks to fill. This study will use descriptive and regressional analysis is quite unusual in the literatures reviewed. Most of the researches on the MMS were carried out in Kenya and Tanzania, with very few conducted in Ghana on research areas such as electronic banking, MMS on payment system and the importance of the MMS. There is no existing research on factors influencing the adoption of MMS among the rural unbanked in Ghana. To the best of the researcher’s idea, there is no previous study that has jointly included Ease of use (EU), payments (PMT), Transaction cost (TC) and Peer influence (PP) in a single TAM based model even though these variables are as well important in determining the factors influencing the adoption of MMS. The contribution of this literature is therefore to fill the identified gap in the area of MMS.