The Paradox of Perceived Risk and Trust on Intention to Use Fintech Payment: Evidence in MSMEs

Abstract

Technology developments and the impact of the COVID-19 pandemic have increasingly online business transactions. Consumers prefer simple and secure forms of payment by avoiding the use of cash. One form of payment that is increasingly in demand by consumers is mobile fintech payment. However, on the other hand, the inherent risks of mobile fintech payments (i.e., cybercrime/cyberattack) are pretty significant, especially in Indonesia, which does not yet have strong regulations regarding consumer data protection. This research investigates the contrasting impact of perceived risk and trust on the intention to use mobile fintech payments from MSMEs business actors' perspectives. This research also examines the perceived risk on the various mobile fintech payment platforms used. The method used in this research is descriptive qualitative research with a survey of 142 MSME in Java, Sumatra, and Kalimantan. The survey was conducted using open and closed questionnaires based on previous research instruments. The results indicate that although the perceived risk is high and trust in the system is low, MSMEs still intend to use mobile fintech payments in the future. The factors that drive mobile fintech payment usage are the demands of consumers, facilitating payment transactions, being efficient, practical, and safer.

The Impact of Financial Literacy, FinTech Utilization, and Literacy of Risk in FinTech on MSMEs Business Continuity in Yogyakarta

“…Risk assessment is crucial for microenterprises considering adopting FinTech payment systems, explicitly concerning developing countries lacking consumer protection and cybercrime rules (11). Risk can be quantified by incorporating non-linearity, such as revalued utility or a range of recognized gains and losses.…”