BigTech Mobile Payment Adoption in the Netherlands

Abstract

The broad goal of this thesis is to explore what is currently motivating consumers to adopt BigTech mobile payment services in the Netherlands. The term BigTech refers to a collection of the largest and most dominant companies in the IT industry, including Google, Apple, Meta, and Amazon, among others. The BigTechs have been leveraging their core competencies in order to enter the financial industry by offering contactless mobile payment services, such as Apple Pay and Google Pay. Further involvement of BigTechs in the financial industry could lead to increased systemic risk, as well as power concentration risks due to their already large influential market power. The Dutch central bank (DNB) and the Dutch competitive authority (ACM) have released reports in which they acknowledge these risks. They state that the competitive balance between BigTech and the financial incumbents will moreover depend on the relative distrust the consumer currently has towards the BigTechs as provider of financial services compared to incumbent financial institutions. Both authorities indicate that the direction which this competitive balance is taking remains unclear, yet the adoption of contactless mobile payment services in the Netherlands, the majority of which is provided by BigTechs Apple and Google, has seen increasing growth. Therefore, this thesis aims to evaluate whether this distrust still wields this influential balancing power in the Netherlands, or if there are other motives that are more strongly influencing this trend instead.
Reviewing the relevant past literature found moderating and mediating effects between constructs examined in mobile payment studies to often be excluded from analysis. As a result, this thesis also aims to address this research gap. A suitable starting research framework was selected after reviewing eleven prominent research models and a conceptual model was designed based on these reviews. Data was subsequently collected using an online survey questionnaire. The 217 collected responses were subjected to data analysis of which the results indicate that the Dutch consumer is mainly driven by three functional motives regarding respectively: how well the technology is expected to perform, how well the technology is perceivably supported, and to which extent the consumer has habits that are similar to using mobile payment services.
Perceptions of involved risk and feelings of distrust towards providers of mobile payment services only reduced the incentive to adopt the technology among respondents within the age group of 25-34, and solely weakened the performance-based motive. It was furthermore found that the habit-based motive reduced both risk perception and distrust of the users. No motivational differences were found between users of BigTech services or those offered by financial incumbents, or between users and non-users.
The Dutch relevant authorities may induce from this research that the competitive balance in the Dutch financial sector is likely tipping in favour of BigTech as consumers are driven mainly by utilitarian needs to which BigTech can more easily cater than financial incumbents. Dutch financial incumbents may therefore require additional support to reduce the potential for harmful levels of competitive pressure in the financial sector and limit the sector’s exposure to concentration risk, which the involvement of BigTech can bring about. Dutch financial incumbents may induce from this research that the contemporary Dutch consumer mainly prefers improved functional capabilities. According to the results, performance, wide-spread support, and fit with consumers’ existing habits, should serve as key focus areas for improvement in order to compete efficiently. The theoretical contribution that this research made regards the discovered mediating and moderating effects of the evaluated constructs in mobile payment adoption research. The obtained results thereby implore future research in this field to similarly evaluate such effects in order to increase the explanatory power of the employed research model and potentially derive additional and crucial insights.