Fintech and contactless payment: Help or hindrance? The role of invasion of privacy and information disclosure

Abstract

PurposeThere is always a need to discover how a paradox between a customer’s desire for a more personalized experience and their privacy and security concerns would shape their intention to continue using contactless payment methods. However, personalization–privacy paradox has not been well-covered over the area of contactless payment. Therefore, this study aims to empirically examine the impact of personalization–privacy paradox on the customers’ continued intention (CIN) to use contactless payment.Design/methodology/approach – The empirical part of the current study was conducted in Saudi Arabia by collecting the primary data using online questionnaire from a convenience sample size of 297 actual users of contactless payment methods.FindingsBased on structural equation modeling, personalization and privacy invasion were approved to significantly impact perceived value of information disclosure (PVD). Strong causal associations were confirmed between perceived severity, structural assurance and response cost with privacy invasion. Finally, both PVD and privacy invasion significantly predict CIN.Research limitations/implicationsThere are other important factors (i.e. technology interactivity, technology readiness, social influence, trust, prior experience, etc.) were not tested in the current study. Therefore, future studies would pay more attention regarding the impact of these factors. The current study data were also collected using a convenience sample of actual users of contactless payment methods. Therefore, there is a concern regarding the generalizability of the current study results to other kind of customers who have not used contactless payment.Originality/valueThis study has integrated both personalization–privacy paradox and protection motivation theory in one model. The current study holds value in providing a new and complete picture of the inhibitors and enablers of customers’ CIN to use contactless payment, including new types of inhibitors. Furthermore, personalization–privacy paradox has not been fully examined over the related area of Fintech and contactless payment in general. Therefore, this study was able to extend the theoretical horizon personalization–privacy paradox to new area (i.e. contactless payment) and new cultural context (Saudi Arabia).

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“…Research can examine customer adoption and engagement with DDNBs. Building on studies that have explored mobile money (Mogaji and Nguyen, 2022a,b), contactless payment (Alalwan et al. , 2023), mobile payment (Lee and Pan, 2023), banking apps (Levy, 2022), mobile investment technology (Fan, 2022), future research can focus on understanding the factors influencing customer adoption and engagement with DDNBs.…”

“…This study adds an invaluable new element to existing literature on strategic management and marketing within banking and financial services industries, specifically banking and finance services (Alalwan et al, 2023;Soetan et al, 2021;Nguyen et al, 2022). Moving beyond established research on mobile banking (Fan, 2022;Nejad, 2022), it recognizes digital banking's growing significance.…”

“…Fintech has raised the bar for customer expectations in banking. The seamless user experiences provided by fintech platforms have created a demand for similar convenience and personalized services in traditional banking (Alalwan et al, 2023). As a result, traditional banks are investing in digital channels, user-friendly interfaces, and enhanced customer experience initiatives to meet evolving customer demands and stay relevant.…”

“…This transformation has profoundly altered the banking landscape and provided opportunities for newcomers to challenge traditional models of bank management (Mainardes and Freitas, 2023). Industry observers are witnessing an explosion of innovative players that use technology to deliver customer-friendly banking experiences (Alalwan et al. , 2023; Abdulquadri et al.…”

“…Internet-enabled banking operations have transformed banking practices, shifting how we engage with financial institutions (Nguyen et al, 2022;Fan, 2022;Alalwan et al, 2023). Long gone are the days of physically visiting a high street banking hall; now, everything takes place online (Nguyen and Mogaji, 2022a).…”