Exploring merchants’ adoption of mobile payments A qualitative study on Swedish merchants’ perspectives

Abstract: People have increased their usage of mobile devices in many aspects of their daily lives, especially within mobile payments. Mobile payments are expected to pave the way for an emerging cashless society. Merchants are considered those that create the market for other stakeholders by offering mobile payment instruments and services. Thus, it is of importance to avoid the chicken-and-egg scenario, where merchants are reclusive and cautious to adopt mobile payments unless customers’ demands for it, and vice versa. Although Sweden has shown a decrease of cash payments and is considered as successful regarding mobile usage, there has still been a modest adoption of mobile payments from the merchants. The purpose with this thesis is to get a deeper understanding of Swedish merchants’ perspectives regarding mobile payments in order to identify the key mechanisms for an adoption. The study has approached these issues with a qualitative study and formed a theoretical framework consisting of the topics of installed base, network effects, digital platforms, multi-sided markets, lock-in effects, path dependency, barriers to the adoption of mobile payments and capturing value from mobile payments, to examine 14 Swedish merchants. The findings suggest that knowledge is required to pass the instep threshold, taking advantage of each other’s installed base, acting on their own behalf to increase customer base, expenses rather than profitability, enables implementation of loyalty programs, enables conversion of physical cards into virtual, perceive barriers as low and perceive enough values are the key mechanisms for merchants to adopt mobile payments within the Swedish market.