Factors and Models for Promoting Consumer Use of Electronic Money

Abstract

Since electronic money (e-money) brings many benefits to consumers, public transportation companies, retailers, and e-money issuers, greater penetration of e-money into everyday life is desirable. The objective of this research is to provide suggestions for promoting the wide use of e-money. As a first step to achieving this objective, a questionnaire on awareness, frequency, and local environments of e-money use was administered to consumers residing in the Tokyo metropolitan area in Japan. By conducting an exploratory factor analysis on the data obtained, seven factors were extracted. Through a confirmatory factor analysis using structural equation modeling with the 7 factors and 14 observed variables, 2 models were constructed: a use model of transport-type e-money and one of retailer-type e-money. The analysis of these two models showed that the factors “transport convenience,” and “non-necessity” significantly affect the use of transport-type e-money, and the factors “shopping convenience” and “non-necessity” significantly affect the use of retailer-type e-money. The findings suggest that improving consumer perception of these factors is the most important for promoting increased use. Schemes for accelerating consumer use of e-money are provided for public transportation companies, retailers, and e-money issuers.