Abstract:
This study is on factors influencing adoption of e-payment system in public transport sector in
Kenya with specific focus on matatus operating the Nairobi-Kitengela route. The Matatu is the
most widely used mode of public transportation business in Kenya. It is very important to the
economy as one of the sectors that is widespread in the country that offers employment to
thousands of Kenyans. Whereas the investments into the industry run into billions of shillings,
they face serious management issues relating to corruption and financial losses, hence the need
to adopt e-payment system. The study contended that the introduction of cashless payment
system in the matatu industry in Kenya to enhance accountability by removing direct cash was
not successful. The matatu owners and other stakeholders through a legal injunction,
successfully petitioned the Government to delay implementation of the e-payment system. Ever
since, it was not clear to what extent matatu stakeholders have implemented the e-payment
system for the same reasons cited by the Government or for other reasons. The study was
guided by the following objectives; to determine the extent to which staff skills and
competence, evaluate the cost of ICT, and analyze compatibility of technology used or to be
used, influenced adoption of e-payment by matatu plying Nairobi-Kitengela route. The study
was guided by three theories and models: technology acceptance model; diffusion of innovation
theory; and technology, organization, and environment context theory. The study utilized
descriptive research design. The total population of the study was the stakeholders in the public
transport sector in Kenya, whereas the target population was the operators of companies and
Savings and Cooperative Societies (SACCOs) operating public transport business on the
Nairobi-Kitengela route. A sample size of 195 respondents was chosen for this study,
representing 25% of the target population, with 85% response rate registered. Simple random
sampling procedure was used to select the general respondents. Key informants who comprised
20 representatives of the matatu management were purposively sampled. An observation
checklist was used to determine any evidence of adoption of e-payment system. Statistical
Package for Social Sciences (SPSS) version 24 was used to analyze the data which was then
presented using percentages, frequency distribution tables, charts and graphs. Finally, linear
regression analysis was used to explain the relationship between the dependent and independent
variables. The study found out that; knowledge to maintain and adopt technology on e-payment
was necessary towards its acceptance and use in the industry, the cost of acquiring e-payment
technology was substantial and that most matatu operators could not manage to raise, and that
there was registered technological incompatibility towards adoption of e-payment system in the
public transport sector. The research sought to test the hypotheses in order to fulfill the
objectives of the study, by using linear regression model and applying t-test to test the
significance in the relationship. All the null hypotheses were rejected on the basis that the
significance of the t-statistic was less than p-value 0.05 set for the study. Therefore, staff skills
and competence, cost of ICT, and compatibility of technology had an impact on adoption of e
payment system in the public transport sector in Kenya, specifically in the case of matatu plying
Kitengela-Nairobi route. The study made some recommendations that included training of
stakeholders on the need for e-payment system, need to introduce incentives towards
implementation of the e-payment system such as zero-rating taxation on the gadgets, and a
sector-wide review of the matatu industry with target on policies and systemic issues,
preventing adoption of e-payment system.
