Factors Affecting Adoption of Mobile Banking at the Bottom of the Pyramid in India

Recent success of companies like ITC, Hindustan Lever, Godrej etc. have prompted companies to think of an earlier neglected market referred to as the market at the “bottom of the pyramid”. The market has unique characteristics and the strategies of the upper markets don’t usually work in this category or segment. The size of the market and the lower transaction cost of banking transactions have prompted banks to think of entering this segment with mobile banking as a distribution channel for banking services. The factors affecting rejection or acceptance of mobile banking have piqued interest among researchers and remain unknown due in part to consumers’ trust, cost and risk perceptions associated with this new platform. This study extends this line of research by conjointly examining dimensions of cost, trust, and risk in mobile banking with perceived ease of use and perceived usefulness as mediating variables of the relationship. Results of this study indicate that though perceived cost and perceived risk both had negative relationship with perceived ease of use yet the trust dimension had strongest influence on actual usage for this segment. The results indicate that in order to gain penetration in this segment companies need to pursue strategies to gain trust of the customers in this segment.