Transaction Costs and Facilitating Conditions as Indicators of the Adoption of Mobile Money Services in Kenya

Abstract

Kenya is depicted as one of the fastest growing mobile money ecosystem in the world. In addition to the traditional text and voice services, all mobile phone service providers in Kenya have incorporated mobile money as a core business function. Mobile money is viewed as a key driver that will ‘leap’ frog the economy of Kenya, bringing poor people into financial system who have been for a long time been excluded by financial institutions. Despite the positive advancements in mobile money, transaction cost and facilitating conditions remains a major hindrance to the adoption on mobile money services. This paper investigates impact of transaction cost and facilitating conditions in the adoption of mobile money in Kenya. A survey was conducted to gather data which was coded in SPSS 16. Confirmatory Factor Analysis was used to analyze the data and Structural Equation Modeling using Analysis of Moment Structures was used to validate the research model. The research model included three main components; transaction cost, facilitating conditions and adoption. The model was developed based on a review of technology adoption models. The analysis revealed that facilitating conditions impact positively to the adoption of mobile money services. Results demonstrate that facilitating conditions do influence adoption usage of mobile money services.