Factors Influencing Adoption of E-Payment System in Kenyan Public Transport Sector: A case of Matatu Plying Nairobi-Kitengela Route.

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.