Customer and Merchant Acceptance of Electronic Cash: Evidence from Mondex in Hong Kong

J. Christopher Westland, Mandy Kwok, Josephine Shu, Terence Kwok, and Henry Ho
International Journal of Electronic Commerce,
Volume 2, Number 4, Summer 1998, pp. 5.

Abstract: Since the beginning of the 1990s, more than fifty electronic-cash (e-cash) pilot trials have been conducted around the globe. Mondex electronic payments card launched its largest global pilot to date in Hong Kong on October 17, 1996, one of the world’s most cash-intensive and technologically savvy consumer marketplaces. Hong Kong, where payments in currency comprise 80 percent of all transactions and 70 percent of total money spent, provides an ideal venue for the study of e-cash.

Our research investigated the adoption of e-cash technologies by Hong Kong with the intention of avoiding the inherent biases in industry studies conducted by or on behalf of stakeholders in a particular product. An unbiased assessment of the worth of e-cash is important for designing e-cash products and investigating claims about the benefits of e-cash.

This research found that merchants believed user acceptance of Mondex e-cash was low, user attitudes were negative, and customers had not perceived the advantages of Mondex’s e-cash. The research suggested that the barriers to adoption are those that normally impede the diffusion adoption of new technologies, and it emphasized in particular the importance of education and change in payment habits in gaining acceptance. Acceptance of credit and debit cards has been incremental, and thus it should not be surprising that e-cash faces similar skepticism and slow adoption.

Key Words and Phrases
: diffusion of technology, e-cash, electronic cash, electronic money, Mondex, pricing strategy, technology adoption