Merchants’ adoption of mobile payment in emerging economies: the case of unorganised retailers in India

ABSTRACT

A substantial body of literature shows that in addition to increased convenience, mobile payments may result in greater efficiency and contribute to digital and financial inclusion. Although researchers have paid a lot of attention to individual adoption of mobile payment, few studies investigate mobile adoption by businesses, especially unorganised businesses in developing countries. To address this research gap, we use an exploratory grounded theory approach to examine unorganised retailers in urban India. Using 56 semi-structured interviews with merchants, we highlight an emerging mobile payment ecosystem that includes technology value, regulatory bodies, non-regulatory bodies, and merchant dispositions. The data highlight power asymmetry in this ecosystem and show that time-varying interactions among its components determine merchants’ behaviour and resulting (non-) adoption. We find that not only are Indian regulatory bodies the most powerful influencers in the diffusion of this technology; they are also important market actors. This study provides insights into the process of technology adoption by unorganised businesses in India. Moreover, this study sheds light on the important link unorganised retailers create between businesses and bottom-of-the-pyramid consumers, as well as between the state and its marginalised citizens, thereby confirming that such retailers are indispensable partners in economic growth and technology-driven inclusion.

SPECIAL ISSUE EDITORS:

• Irwin Brown, Kweku-Muata Osei-Bryson and Peter Meso

KEYWORDS:

• Developing countries
• mobile payment
• m-payment adoption
• unorganised retailers
• regulatory influence
• inclusion

Supplementary material

Supplemental data for this article can be accessed here.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. The International Conference of Labour Statisticians defines the informal sector as consisting of “unincorporated household enterprises which differ from formal enterprises in terms of technology, economies of scale, use of labor intensive processes, and virtual absence of well maintained accounts” (Kulshreshtha, 2011, p. S123). Ghani et al. (2013) observe that the characteristics of businesses in the unorganised sector in India match the general definitions of informal sector. Thus, the informal and unorganised sectors, though not identical, are considered similar, and the terms “informal” and “unorganised” are used synonymously in many developing countries in Asia and the Pacific region (Kulshreshtha, 2011). Such businesses are generally not associated with any formal government/regulatory setup, are not registered, and do not pay taxes.

2. For the interested reader, we have provided some broad additional background elements of our study, related to the Indian context, in Appendix A (please see online supplementary file).

3. The Goods and Service Tax is an indirect tax scheme implemented to obtain a simplified and uniform tax structure across the country (Goods and Service Tax Council, 2018).

4. An initiative by the current central government to promote design and manufacturing in India.

5. A scheme by the current central government to provide access to financial services to all citizens and promote financial inclusion.

Additional information

Funding

This work was supported by the ICFAI Foundation for Higher Education (IFHE, declared as a Deemed to be University, under Section 3 of UGC Act. 1956) [IFHE/RC/JULY2017/31].