Determinants of Customer Preference for Cardless Technology Over the Card for Cash Withdrawals in Sri Lanka

Abstract

It may seem contradictory that someone who avoids using a debit card still seeks cash withdrawals and prefer to use their mobile device at an ATM. The purpose of this study is to explore the determinants of customer preference for cardless technology over the card for cash withdrawals in Sri Lanka. The study has been conducted using a quantitative-deductive approach and data was collected from 186 cardless technology users through structured questionnaires. Convenience sampling was employed in this research study. The research employs the Technology Acceptance Model (TAM) as a theoretical foundation, evaluating Perceived Ease of Use, Perceived Usefulness, Perceived Security and Customer Trust as independent variables in this study, with Customer Preference as the dependent variable. Reliability, descriptive, correlation, multiple regression analysis and comparative study were used to analyze the data using the SPSS software. According to the study's findings, all four factors significantly affect customer preference, with perceived usefulness and customer trust emerging as the most impactful variables. Independent variables are less correlated with each other, as per the results of the inter correlation matrix, tolerance values, VIF and Cronbach alpha values demonstrate the data are more reliable. The analysis also highlights the comparative adoption rates between two major banks, People's Bank and Sampath Bank, providing insights into their customers' perceptions. The study concluded that cardless technology not only enhances customer perceptions of security and ease of access but also holds the potential to revolutionize cash withdrawal practices by eliminating the need for physical cards. Although banking technology in Sri Lanka is advanced and trust issues appear minimal, banks must continue to communicate and educate customers on the benefits of adopting cardless services. The findings of this study highlight the potential for banks to leverage cardless technology as a secure, convenient and cost-effective solution to meet the evolving needs of customers. This study is subjected to several limitations. First, the sample was limited to a small group of Sri Lankan banks. Second, reliance on self-reported data may have bias responses. For a detailed analysis of the banking sector as a whole, it is essential for future research to focus on receiving money through this cardless technology, which is also provided by other banks. This can be extended to additional markets, i.e., similar consumer preferences in other regions or different countries, especially in developing economies with growing mobile and digital banking services, can be investigated. Furthermore, future studies can include a broader range of banks and examine the potential environmental benefits of reduced plastic card usage, as well as how sustainability factors may influence consumer adoption of such technology.