Adoption and Diffusion of in-store Mobile Payment : Lessons from China

Abstract: With the evolution of technology and the Internet, the world is heading to a "cashless society". China has moved towards one solution -  mobile payment in the recent decade. In every corner of urban life, mobile payment has become a favorite way of conducting transactions for merchants and customers. This thesis aims to get a deep understanding of why mobile payment platform has become so widely used in China, and in particular to explore why merchants choose to adopt it. To investigate the issue, this study has formed a theoretical framework including the topics of mobile payment, platform and multi-sided market, network effects, lock-in effect, technology acceptance model, and other influential factors. Based on the framework, a qualitative study was conducted to examine merchants and mobile payment service providers in terms of adoption and diffusion. The findings show that several factors such as customer demands, cost, initial trust and benefits have significant influence on merchant’s adoption of mobile payment. The study implies the provider’s strategies of diffusion largely depend on the cooperation with merchants and having a massive customer base.