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ADOPTION OF PAYMENT
SYSTEMS IN TEN COUNTRIESA CASE STUDY OF DIFFUSSION
GROUP MEMBERSAARUSHI JAIN : SMBA12001
SHIVAM GOYAL : SMBA12029
ABHIMANYU JATANI : SMBA12039
GEORGIE JACOB : SMBA12052
MANOJIT SASMAL : SMBA12057
YOGESH SINGLA : SMBA12077
Consumer personality trait (Innovativeness)
Brief about adoption of various payment systems
in different countries
Discussing adoption pattern using various
hypothesis and research discussed in the case
DIFFUSSION OF INNOVATION
A theory that explains how, why and at what rate
new ideas and technology spread through cultures.
2 stages included are as follows DIFFUSSION PROCESSIt is a macro process concerned with the spread of a
new product from its source to the consuming
public. It is concerned with how innovation spreads.
ADOPTION PROCESSIt is a micro process that focuses on the stages
through which an individual consumer passes when
deciding to accept or reject a new product.
Consumers engage themselves in extensive
Products are constantly evolving.
Companies are making innovations on the
previously developed models for easy adaptability
by the market.
Here, we talk about the payment systems adoption
from a list of countries during 1988-1996.
Relative advantageExpresses to what extent the new product is better
then the one its replacing
CompatibilityLevel of innovation which fits into the specific
ComplexityIt is the extent of how difficult it is for an adopter to
understand and use an innovation
DivisibilityDegree to which a new product is capable of being
tried on a limited basis
CommunicabilityEase with which a product’s benefits can be
observed, imagined or described to potential
Firm oriented innovationTreats the newness of the product from the
perspective of the company producing or marketing
Product oriented innovationFocuses on the feature inherent in the product itself
and on the effects these features are like have on
consumers established uses patterns.
- Continuous innovation
- Dynamically continuous innovation
- Discontinuous innovation
Market oriented innovationJudges the newness of the product in terms of how
much exposure consumer has to a new product.
Consumer oriented innovationNewness is based on the consumer perception of
the product rather than the physical features or the
CHANNELS OF COMMUNICATION:
How quickly an innovation spreads through the
market depends on the communication between
marketer and consumer as well as communication
among the consumers.
Correct communication channels used during the
process of diffusion, oriented towards behavior and
preferences of the target category of adopters.
Impersonal sources like advertising and press
coverage and inter personal sources like sales
Internet, TV, Radio, banners, SMS, Newspapers,
Diffusion of new product usually takes place in a
Social system = Physical + Social + Cultural
May influence entire society to accept or reject the
Characteristics of Modern Social System Positive attitude of members of the social towards
Positive attitude towards science and education
High level of homogeneity
Rational relationships then emotional ones
Proper timing of introduction of innovation into the
market is very important.
Time is the main constituent of diffusion process.
1. This is the total time that elapses between
consumers initial awareness of the new products
and the point at which he/she accepts/rejects it.
2. It is important because the average time the
consumer takes to adopt a new product will be
the precursor to the overall length of time it will
take for widespread option.
RATE OF ADOPTION
How long it takes for the consumers of the social
system to adopt the new product.
SIGMOID CURVE (S Curve)With successive groups of consumers adopting the
new technology, its market share will eventually
reach the saturation level.
F(t)= Introduction of the innovation
t= Time lapsed since the innovation
B= Reflex speed of adoption
A= Constant reflecting the location
MANAGEMENT DECISION PROBLEM:
Understanding the rate of adoption of Smart Cards
MANAGEMENT DECISION PROBLEM:
a. Effect of Adoption of previous payment systems
of new innovations.
b. Estimation of external and internal influences
from the social aspects of payment systems.
OBJECTIVE OF THE ANALYSIS
To understand the rate of adoption of various
payments systems that are existing with
respect to diffusion of innovation.
THE EXISTING PAYMENT
A cheque is a document that orders a payment of
money from a bank account. The drawer writes the
various details including the monetary amount, date,
and a payee on the cheque, and signs it, ordering
their bank, known as the drawee, to pay that person
or company the amount of money stated.
A credit card is a payment card issued to users as a
system of payment. It allows the cardholder to pay
for goods and services based on the holder's
promise to pay for them.
An automated teller machine (ATM) is an electronic
telecommunications device that enables the clients
of a financial institution to perform financial
transactions without the need for a cashier, human
clerk or bank teller.
A Bank Card is a plastic card issues by a bank to its
clients that may perform one or more of the
following servicesa. ATM Card
b. Debit Card
c. Credit Card
A smart card, chip card, or integrated circuit card
(ICC) is any pocket-sized card with embedded
5. The Netherlands
SECONDARY DATA RESOURCES
Banks of international
H1: The speed of adoption(B) of a recent
payment innovation will be higher than that
of past innovations.
H2: The internal influence (q) on the speed
of adoption of payment systems is higher
than the external influence (p).
H3: The innovation coefficients (p)
regarding different innovative payment
systems are positively correlated across
H4: The level of adoption of the current
systems X at a time t is positively related
to the speed of adoption of a new payment
system Y introduced at a time t.
Adoption of newly evolved payment systems is
accepted quickly based on adoption rate of the
Adoption process of payment system is mainly
driven by internal influencer q (social learning).
The external influencer had less or no impact of
the rate of adoption.
Marketing manager can develop strategies to
develop adoption rate by practicing social learning
through word of mouth, reference group & social