An Online Utility Bill Payment System

An Online expediency measuring rod Payment SystemAbstractWith the growing physique of people who ar been increasing pressured for time, online advant maturate peter fee has become a graceful solution for the consumers with busy life styles. Through online defrayal of returns program preeminences, consumers atomic number 18 commensurate to save time, hassle and therefore make their lives oftentimes easier. Although online public inferior flush compensation has become one of the fastest growing bowel movements in the world oddly in the US, in the Sri Lanka however, the progress of nursing homes adopting to online return program(prenominal) shaft overcompensatements is rather slothful.Thus, the primary objective of this schooling is to analyse the factors influencing the consumers mark to adopt an utility bill stipend system in Sri Lanka alongside with the secondary objectives of identifying the aw arness level on online bill fees systems, examining the w ell-nigh prefer utility bill payment options and models, and the degree of credence of online utility bill payment systems by the consumers and finally to analyse the future prospect with regards to online utility bill payments. indeed a survey was conducted among 50 physicians from quartette major hospitals in the Colombo city. According to the result obtained from this research, it was revealed that although in general all the respondents were somewhat aware intimately online utility bill payment systems, the younger respondents acquired a better companionship active online utility bill payments than respondents from older age categories. Furthermore, all the respondents positively reacted and stated that it is important for all the utility companies to smear their online presence consequently allow customers to conduct online transactions as it would be more convenience. More all over, factors categorised downstairs perceive risks and perceived benefits were found to h old back a considercapable force on the consumers determination to adopt an online utility bill payment system. Other factors much(prenominal) as go and features offered by companies, individuals computer experience and skill, and usage of credit and calculate tease were excessively identified and are discussed in this research.Key Words Online utility bill Payment system doctrine card usage e-commerce borrowing User object.Chapter 1IntroductionToday the improvement of e-commerce has led to the derivation of dissimilar profits based activities. For e.g. companies are able to conduct their business activities at all hours, reaching customers in all parts of the world and so expand their customer base without geographically world limited. Whereas in customers perspective, e-commerce provides a platform on which they washbasin easily carry out the necessary transactions at their convenience. Hence even the companies which provide utility services are boldly revolutionizi ng their industry thus adopting internet for e-commerce purposes (Buccigross, 2000). This allows customers to make their utility bill payments directly through utility companies websites or through a third political party website much(prenominal) as believes, financial institutions and aggregators.Online utility bill payment is when the customer makes his or her payment transactions online for the utility services obtained from a particular company. By compensable utility bills via online, consumers have the benefits of avoiding crowds, queuing, parking problems, and cutting their travelling costs and time (Ra mayah et al, 2005). Hence consumers could simply get their utility bills paying with just a click of their mo enjoyment.In Sri Lanka, the payment system of utility bills is rather different to the systems established in other countries. The utility bills usually contract by post thus the consumers must visit the payment office in exhibition to settle the payments. As men tioned earlier, this process is usually accompanied by queuing, parking problems, and limited payment options. For example, the CEB NWS DB only accepts payments do by cash or cheques at their payment counters. These issues can be considered as a hassle for people whose jobs are of hectic and stressful nature. Many utility companies in Sri Lanka have identified this problem thus have apply various types of payment systems in order to provide their consumers with a wider choice when it comes to their payments (refer appendix A). Online utility bill payment is one of the elite choices of payment systems that have been implemented in the contemporary world.Problem StatementWhat are the factors shaping and influencing an individuals intention to adopt an online utility bill payment system?Problem Justification in that location is a lack of agreement as to what is really happening in the local context with regards to the adoption of parvenu technological services related to the inte rnet. Hence there are hardly any researches that have been carried out in order to understand the consumers view point with regards to online utility bill payment systems that have been implemented. Therefore the knowledge intimately consumers behaviour related to this area of study is vital for utility companies and other vendors operating in similar businesses in order to estimate the potential market available hence utilize the internet as a tool of opportunity for those companies to grow and expand their market.The study impart also be essential for government utility companies (e.g. CEB) since they have not yet implemented the service of allowing the customers to pay their utility bills directly through the companies websites. The development originated from this research will enable both the government and semi head-to-head utility companies to identify the significance of the factors influencing the consumers intention to adopt online utility bill payment systems thus dev elop strategies to further enhance their business activities.Objectives of the StudyTo determine awareness level most online utility bill payment systems by consumers.To analyse the factors influencing the consumers intention to adopt an online utility bill payment system.To find out the most accepted online utility bill payment options and the preferred bill payment modes by consumers.To analyse the degree of acceptance of an online utility bill payment system by consumers.To examine the impending future prospect of online utility bill payment systems in Sri Lanka.Significance of the StudyThis study will mainly facilitate the utility companies and other vendors in Sri Lanka to identify the factors influencing the consumers intention to adopt online utility bill payment systems, in this case physicians who are residing in Colombo, a highly skilled and a valued population in the uncouth. Therefore by understanding such factors, companies will be able to eliminate the uncertainty le vels and have a clear view about the potential market for online utility bill payment in Sri Lanka.This study will further help the utility companies develop enhanced strategies regarding the payment options that are being made available to their clients. sensory faculty about online utility bill payment will allow consumers to acclimatize to these new technologies thus exploit the advantages of the internet. The information and data that have been collected in this study will aid the future researchers conducting researches related to consumers intention to adopt online bill payment systems in general.Scope of the StudyThis study was carried out to through trial-and-error observation investigate the factors affecting the consumers intention to adopt an online utility bill payment system. However, the survey sample of the study consisted only of physicians working in quaternary (4) private hospitals situated within the Colombo city limits.Furthermore, the physicians were from var ious backgrounds thus to achieve results that are more realistic and to better signify the people that pay utility bills, the sample have to be more diversified in terms of age and geographical location (He Mykytyn, 2007), preferably homeowners who are responsible for their respective household bill payments.Chapter 2Literature ReviewOnline Utility Bill PaymentOnline utility bill payment is when the consumer makes his/her payments for the utility service(s) obtained with the use of the internet. The types of utility services are illustrated in the table below.Today, the consumers trend in making utility bill payments is increasing particularly in the developed nations Brant (2008). In the Sri Lankan context however, although the country illustrates a steady growing in terms of internet usage especially from the users in the urban areas (Sathrasinghe, 2004), this has not been escorted by a similar growth in the number of consumers making online utility bill payments. In fact accord ing to the Central Bank of Sri Lanka (2008), the overall transactions made by consumers over the internet illustrated a declining trend.Online Utility Bill Payment Models OptionsThere are various payment models and payment options available to the customers when it comes to paying online utility bills unlike in the traditional (or offline) order of bill payment where the customer is limited to pay by either in cash, cheque, or electronic payment at a given payment centre.There are both types of online utility bill payment models, namely direct model and indirect model. The following table absorb further details on these two models.Indirect Model (Third Party)Consumers pay any biller through a third party website such as a bank or portal, or by using software that interacts with the payers bank (Flynn Bowes, 2005)Automatic Bill Settlement by American Express(American Express, 2010)HSBC Easy Bill Settlement for Utility Bills(Hongkong and Shanghai Banking Corporation, 2010)With th e evolution of payment options from barter to commodity-based, to currency and coin, to card-based and, more recently, to electronic network-based systems (Mantel, 2000), modern consumers have a wider choice when it comes to paying their utility bills via online. The table 3 below illustrates various online payment options available for consumers.Table 3 Online Payment OptionsOnline Payment OptionsDefinitionExamples (Sri Lanka)Virtual Credit card gameA disposable payment card that can be used to make purchases or payments over the internet (Economy Watch, 2010).Sampath Web card(Sampath Bank, 2010)E-chequesAn electronic representation of a paper cheque (Acosta, 2008).e-cheques by Union Bank(New Sri Lanka, 2009)Smart cheques by Standard charted(Standard Chartered Bank, 2008)E-WalletsA software that has been installed on the consumers desktop which automatically fills payment forms (Acosta, 2008).Sampath e-wallet(Sampath Bank, 2010)Credit Cards (VISA, MasterCard American Express)The funds for purchases or payments is credited directly to the consumers bank account, allowing consumer to pay later.HSBC credit cards (Premier, Platinum, Gold, Classic)(Hong-Kong and Shanghai Banking Corporation, 2010)Debit CardsThe money for purchases or payments is deducted directly from the consumers checking account.HSBC VISA Debit card(Hong-Kong and Shanghai Banking Corporation, 2010)Sampath Bank Debit card(Sampath Bank, 2010)Online bank accountsAllows users to manage their bill payments through online bankingPersonal banking by HSBC(Hong-Kong and Shanghai Banking Corporation, 2010)Payeasy by Sampath Bank(Sampath Bank, 2010)Combank Online by Commercial Bank(Commercial Bank, 2010)Literate Review on Dependent VariableGiven the fact that online bill payment is one of the fastest growing consumer activities on the internet that has being accepted by the business world today (McCormick, 2005), a few published empirical studies have specifically addressed the underlying factors that could materially affect customers adoption of an online utility bill payment system (He Mykytyn, 2007).Cheung et al (2003) have stated that theories such as the TRA, the TPB and the tammy are the most dominant theories that are been used to test studies related to the online consumer behaviour. Hence out of the three theories, TAM is considered as a suitable theory to analyse the factors influencing the physicians intention to adopt an online utility bill payment system (Taylor and Todd, 1995 cited Karami, 2006). (Please refer Appendix B for further details on the theories).Literature Review on Independent VariablesIn order to address the problem in this study, the following independent variables were selected as suggested by many preliminary studies.perceived CharacteristicsPerceived risk Previous findings on the impact of perceived risk on consumer behaviour have suggested that the consumers consider adopting online payment methods more spoilt than tradition offline methods ( Palvou 2003 and Koufaris et al 2002 cited He Mykytyn, 2007). In the Sri Lankan context, the risk of online utility bill payment is relative moderate. This is complemented by the fact that there are many banking services providing secure methods for the online financial transactions. However, according to the central banks statistics (2008), the total volume of transactions decreased by 5.7%. This indicates that there is a tendency that Sri Lankan consumers are concerned about the perceived risk associated with online payments in terms of security, trust and privacy.Perceived benefits the intention of online utility bill payment can be explained by the two components of TAM PU and PEOU. Hence according to these components, when physicians consider online utility bill payments is more useful in terms of time saving, convenience and service reliability, and it is easy to use, they should be more likely to pay their utility bills online. Previous findings by (He Mykytyn, 2007 and Ra mayah et al, 2006) revealed that perceived benefits are the significant drivers of consumers intention to adopt an online utility bill payment system. These findings were also consistent with previous studies on TAM (Chan Lu, 2004 cited Ramayah et al, 2006).Consumer CharacteristicsConsumer characteristics variables include gender, age, and nature of occupation, credit/debit card usage, attitude towards innovative payment methods, and individuals personal computer knowledge and skills.Gender Most of the previous researches on online bill payment, it is found that males are more willing to pay their bills through online than females. However, in a study by Masters (2006) it was found that the gender difference between males and females rate of internet usage among physicians are diminishing. In the Sri Lankan context, the computer literacy between males and females are 22% and 18.7% independently (Department of Census Statistics, 2009). This indicates that the gender differences in how each perceives internet technology are blurring.Age Most studies indicates that the tendency of younger consumers intention of online bill payment is much higher than that of old consumers. This maybe mainly due to the familiarity of the internet based activities at an early stage. The circumstances in Sri Lanka are also similar this may be mainly due to the high portion of computer literacy in young people than older people (Department of Census Statistics, 2009). However, in the case of online utility bill payment, a study by Mantel (2000) showed that older people are more likely to pay utility bills via online than young people.General physicians/ Specialists Although most previous researches did not find a significant positive relationship between the user intention in online bill payment and education level, in study by Masters (2006) an inte relaxation behavioring relationship between the nature of the work and internet usage was revealed. The study showed that there is a greater tendency for specialists to use the internet more than general physicians (Masters, 2006).Credit/Debit Cards Usage A study by Hayashi Klee (2003) stated that consumers who intent to use new technology have a more tendency in utilizing electronic payment methods than those who do not. Though the credit cards usage in Sri Lanka has indicated a declining trend since the recessionary months of 2008 the debit card usages have shown a considerable increase. Thus this could be assumed as a factor influencing the intention to pay utility bills via online.Attitude Attitude refers to the ones evaluation of consequences on performing a particular behaviour (Karami, 2006). Thus attitude has long been shown to influence behavioural intentions (Ajzen and Fishbein 1980 cited Pavlou and Fygenson, 2006). data processor Skills In most cases this stands as a key barrier for adoption of online transactions. Computer skills are mainly a persons ability to understand the set-up of online payments and the ability to use such online payment systems. Most of previous studies indicate that there is a significant positive relationship between individuals computer skills and intention to adopt an online utility bill payment system.(Please refer appendix C for the summarised table on literature review).Chapter 3Methodology Secondary Data AnalysisPopulation standardThe population selected for this study comprised of registered physicians in Sri Lanka. In order to obtain the sample, multistage sampling method was used. As illustrated in the figure below, initially cluster sampling method was used to divide the population into sub categories based on geographical area and then on obtaining a list of physicians employed in private hospitals in Colombo city, stratified sampling method was used to further divide the sample into homogeneous groups based on nature of occupation, hence a simple random sample was drawn from the two combined categories. (Please refer appendix D f or further details).Secondary Data AnalysisThe Future of Online Utility Bill Payment SystemsAlthough the idea of online utility bill payment is quite unfamiliar to most Sri Lankan households, online utility bill payments is one of the popular method of paying utility bills, mostly in developed countries such as the US. Hence according to a survey by the NLCCDG in 2005, 75% of the US cities had already implemented a separate webs5%ite for their citizens in order to make utility bill payment (IT Facts, 2005).According to Forrester Research, it is estimated that some47 million US households will pay utility bills online at the end of year 2010, which is a 75% increase from 2004 (illustrated in the figure below).Furthermore, the survey reported that among the consumers who are below the age of 30, the interest in online utility bill payment will grow by 219% and 32% of increase among baby boomers (BCR Access, 2006).Although there are no direct surveys that has been carried out in the Sr i Lankan context with regards to online utility bill payments, according to the internet world stats website, the internet users have increased significantly during the past few years hence the percentage of penetration have increased by approximately 3% in year 2010 compared to 1.8% increase in year 2009 (internet world stats, 2010). The figure below illustrates the trend in internet users in Sri Lanka (source internet world stats, 2010).Although the adoption of new technologies by the Sri Lankans is comparatively sluggish when compared to other Asian countries in the region, the government of Sri Lanka has taken numerous steps in order to enhance the e-commerce base activities. Hence one of the most significant episodes in the authorized regulation of e-commerce in Sri Lanka was the warrant of the Electronic Transactions Act in 2006. This act was implemented in order to assist the commercial and financial activities by removing barriers to electronic transactions (Kariyawasam, 2 008). then since then many companies providing various services, especially utility services, have implemented systems that allows consumers to conduct their transactions via online.Chapter 4Data AnalysisThe primary data for this study were collected through a survey based field study which consisted of thirteen questions (please refer appendix E for the questionnaire). The survey was administered to the physicians working at four major private hospitals in Colombo, namely Lanka Hospitals, Oasis Hospital, Asiri Surgical Hospital and Nawaloka Hospital.Fifty (50) questionnaires were randomly distributed among the physicians employed at all four hospitals and the responses were collected two days after the initial distribution of the survey. In total, forty four (44 i.e. 88%) physicians responded.Total of 29 items were used in this empirical study, including customer characteristics, perceived risk, perceived benefits, and merchants website and service features. To calculate the inter nal consistency of these items, a reliability analysis was performed by computing Cronbachs Alpha for each item. Hence all items are within the range of 0.746 (illustrated in the figure below) which is within the commonly accepted range, i.e., 0.69 (He Mykytyn, 2007).According to the findings about the awareness level on online utility bill payment systems in Sri Lanka, the results indicated that in general all the respondents were moderately aware. However, when categorized according to the age, those of who were over 46 years old were only slightly aware about online utility bill payment systems, and male respondents demonstrated more knowledge on online utility bill payment systems than female respondents.1= Never, 2= most never, 3= Sometimes, 4= Almost every time, 5= Every timePreferred Bill Payment OptionsThe respondents mostly preferred to use credit and/or debit cards for their online transactions. The debit card usage frequency was higher than the credit card usage for o nline utility bill payments, although in general a higher number of respondents acquired a credit card.The indirect bill payment method was the most preferred among the respondents, i.e. most consumers preferred to pay their utility bills (excluding the telephone bills) through a third party website such as a bank or portal, or by using software that interacts with the payers bank (Flynn Bowes, 2005).Despite of any age differences, the consumers attitude towards online utility bill payment systems were positive. Hence most respondents thought that it is important that all companies must implement online bill payment systems as fence to offline payment methods. turnabout AnalysisA regression analysis was performed using the individuals intention (UI) as the dependent variable and perceived risk (PR), perceived benefits (PB), merchants website service and features (MWSF) and computer skill (CK) as the independent variables. The Equation for this model is as followsIndividuals bluep rint to adopt an online utility bill payment system (UI) = 0 + 1Perceived try (PR) +2 Perceived Benefits (PB) + 3 Merchants Website Service Features (MWSF) + 4 Individuals Computer Skill (CK)i.e.UIn = 0 + 1PRn +2PBn + 3 MWSFn + 4CKnWhere01234 = Regression coefficientsn = 1, 2, 3 44Table Regression Analysis ResultDependent Variable Individuals Intention to Adopt an Online Utility Bill Payment OptionFigure Framework on Factors Affecting the Individuals Intention to Adopt an Online Utility Bill Payment System.316.418-.281.238Individuals Intention to Adopt an Online Utility Bill Payment SystemIndividuals Computer SkillMerchants Website Service FeaturesPerceived BenefitsPerceived RisksTherefore from the findings above, it is evident that perceived risks, perceived benefits and individuals computer skill variables indicate a positive relationship with the intention to adopt an online utility bill payment system variable. The merchants website service features variable, however, indi cates a negative relationship, this explains that more than the services offered by certain merchants regarding online utility bill payments, respondents were more concerned about factors such as security, trust, privacy, time, and other beneficiaries when it comes to adopting an online utility bill payment system.Chapter 5Conclusion RecommendationThe main objective of this study was to empirically investigate the factors affecting the individuals intention to adopt an online utility bill payment system in Sri Lanka. The primary investigation on the topic identified that there are several factors influencing the adoption of online utility bill payment systems by consumers in the country.Since the country is still in its infancy of adopting online payment methods as oppose to offline payment methods, the study was conducted among physicians, a highly qualified and professional set consumers who are more likely to be in touch with new technologies. Thus the findings of this study are from a survey that consisted of 44 physicians employed at four major private hospitals in the Colombo city.The results indicated that although in general all the respondents were reasonably aware about the online utility bill payment systems that were available for them, the younger who were below the age of 30 were extremely aware about online utility bill payment systems compared to the rest of age groups. Additionally it was also found that male respondents were more aware about online payments than female respondents.The general usage of credit/debit cards and online bank accounts for the payments of utility bills was found to be relatively less. This can be also related to the finding from the secondary research which analysed that the usage of credit and debit cards has declined in Sri Lanka due to various reasons such as the economic turmoil and high interest charges applied by subsequent banks which issue the credit/ debit cards. Thus, the use of online bank accounts for th e settlement of online utility bill payments showed a higher rate over credit and debit card usages.Moreover, although most respondents stated that they preferred to pay their telephone bills directly from the consequent merchants website, for other payments such water and electricity, most respondents preferred to adopt payment systems that were implemented by third party vendors such as banks.Concerning the consumers attitude towards online utility bill payment systems, majority of the respondents stated that it is important for utility service companies to mark their presences on the internet thus implement online payment systems. Interestingly, apart from the younger age group below 30, respondents between the ages 41-45 also indicated a high positive attitude towards the importance of online utility bill payment systems.Hence the survey revealed that most respondents were concerned about the credit cards frauds, security levels, and privacy when it came to making online payment s. Thus these factors which fell under the variable perceived risks indicated a positive relationship with the individuals intention to adopt an online utility bill payment system.Furthermore, it was found that respondents enthusiasm to make online utility bill payments also depended on perceived benefits, which included factors such as ease of use of the system, speed, avoidance of late payments and queues, and time. This also supported as positive with the individuals intention to adopt an online utility bill payment system.Moreover, individuals computer skill which was measured using the information based on the years of computer experience and internet experience which the respondents possessed supported positive (although weak) relationship with the adoption of an online utility bill payment system. Nevertheless, the impact of merchants website service and features were not considered as an important or influential factor by the respondents to adopt an online utility bill payme nt system. This may be due to the lack of design and service features that are made available to the customers by the existing utility companies.In conclusion, this investigation was carried out as an extension of the Technology Acceptance Model (TAM) which was initially developed by Davis in 1989 (cited in Ramayah et al., 2005) with additional variables that were assumed to affect the individuals intention to adopt online utility bill payment systems, which is a branch of e-commerce associated with online consumer behaviour.Hence according to the findings in this investigation, it could be assumed that the youthful consumers who have received a higher level of education are more aware about online bill payment systems thus are more notably agreeable to adopt online bill payment systems as a convenience way of settling utility bills. It can also be assumed that the method of online utility bill payment is not being widely accepted in Sri Lanka due to the lack in consumers confidence on security of payments, privacy issues, and their trust on particular merchants. Therefore companies must take necessary actions required to improve to consumers confidence about online bill payments and further emphasis and educate the consumers on particular benefits that will be offered to them through the utilisation of online bill payment systems.