Fintech Payment Adoption Among Micro-Enterprises: The Role of Perceived Risk and Trust

Abstract

The current adoption of fintech payment technology by MSMEs is motivated by the trend of using digital money. This study presents an investigation the factors that influence the intention to use fintech payments (e-money, e-wallet and Electronic Data Capture) in micro-enterprises. Furthermore, this study will explore more specifically the role and perceived trust and risk in fintech payment adoption. This study uses a quantitative method by distributing surveys to 136 Micro, Small and Medium Enterprises using convenience sampling technique. The results indicated that perceived usefulness, risk and trust are the important drivers of the adoption fintech payment among the micro-enterprises. The results of this study reveal interesting findings, risk perception has a significant positive effect on intentions to use fintech payments.

Determinants of mobile application adoption among micro-entrepreneurs

“…They found that education about technology, access to credit, and provision of government incentives are critical for enhancing the adoption rates of technology. Other factors identified in a study on fintech adoption in the SMME sector include perceived usefulness of applications, concerns of risk, and that of trust (Purwantini & Anisa 2021).…”

The Role of Fintech in Financial Inclusion (Case Study of MSME Entrepreneurs in Surabaya)

“…Perceived usefulness refers to the extent to which entrepreneurs perceive fintech as beneficial for improving business processes, increasing operational efficiency, and achieving business objectives. For SMEs in Surabaya, understanding the perceived usefulness of fintech solutions may shed light on the extent to which these technologies align with their specific business needs and goals (Ryu,2018;Purwantini et al, 2021).…”

“…In Surabaya's business landscape, SMEs' trust in fintech platforms plays a pivotal role in shaping their willingness to adopt these technologies. Factors such as data security measures, transactional transparency, and the reputation of fintech providers contribute to building trust among SME entrepreneurs, thereby influencing their adoption decisions (Purwantini et al, 2021;Zhong et al, 2019;Chan et al, 2022) Financial risk represents a critical consideration for SMEs contemplating fintech adoption. Financial risk entails the potential monetary losses or costs associated with utilizing fintech solutions, including transaction fees, operational expenses, and cybersecurity threats.…”