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Background

The rapid progress in the development of new technologies over the last three decades such as the Radio-Frequency Identification (RFID) payment technology, which is used in banking and other industries have dynamically shifted to the digitalised systems. For example, in the last few years, Radio-Frequency Identification (RFID) payment technology has widely been integrated into credit and debits cards payment methods (Hossain &Prybutok 2008). The technology has been used in Smartphone retail technologies to enhance payment, which is the next step high-techs payment generation. The technology enables a direct interface with a miniaturised chip, which consists of interrogators and tags (Thiesse 2007).

Google Wallet is an example of Smartphone retail payment system and Geld Karte, Oyster and Octopus are prepaid payment cards used in the UK, Germany and Hong Kong respectively. The technology is the latest in the banking system. However, it has spread rapidly and has penetrated different other industries (Shin, 2009). Statistics show that the UK alone has more than 20 million contactless cards. However, the level of awareness of contactless cards is about 80% because of the presence of multinational institutions advocates of the technology. For instance, retailers such as Marks & Spencer, Waitrose, the Co-operative and Boots actively promote the technology to increase awareness (Angeles 2013). In addition, retailers such as, McDonalds and Eat food chains are offering services based on contactless cards. Thus, the acceptance of the technology seems to be progressing every year.

It is worth noting that the level of acceptance of the technology in the UK is considered moderate. Despite the presence of this technology and companies offering its service, it is surprising that the payment method is not the norm in the country. The reliability and performance of the card have been tested and the results show that the card performs twice as faster than the conventional cards (Pramatari&Theotokis 2009). There are more than 20 million contactless cards issued to consumers in the UK and the awareness level of more than 80% has been achieved by 2014, yet little changes in the method of making payment have been observed. Typically, most consumers still prefer to use the conventional cards and cash methods. However, it is interesting to understand the future of this new technologys product development.

Research problem

The major question in this phenomenon regards the inability of the RFID payment cards to penetrate the market as expected. For instance, it is not clear why the cards have not become a popular method of payment, and this product in future (Lee, Park, Yoon &Yeon 2012). Secondly, various questions have been raised about the privacy as well as security of the RFID card method of payment. Is RFID payment method worth the risks involved?

Evidently, there is inadequate research information available to address these questions. In particular, information regarding consumer behaviour and how they are embracing the new technology in payment system is lacking. In fact, most studies have attempted to determine various aspects of consumer behaviour in embracing other payment methods, which have been enhanced by technology. For instance, consumer behaviour and its impact on acceptance of such payment technologies as online, mobile and Smartphone payment technologies have been studied. Nevertheless, information about the impact of consumer behaviour and trust towards RFID-enhanced contactless cards is greatly lacking (Sarma, Weis & Engels 2013). It is quite possible that the low level of acceptance and embracement of the technology among the consumers in the UK results from inability to consider and address the issues related to consumer trust and behaviour towards the new technology.

Aim and Objectives

The aim of the proposed research study is to understand more clearly the technology adaptation process of product development. The method used is to review different concepts, methodologies and theories from studies that are relevant to the subject within this sector. The aim of this project is to investigate how new technology acquire or adopt product services and the factors surrounding the process. The project also highlights the enablers as well as the inhibitors that affect the change process.

In addition to new-technology adaptation process of products, the study investigates (as a case study) on the phenomenon and novel payment method that has resulted from RFID technology Contactless Payment. Particularly, contactless payment will be able to increase the likelihood of success in the adoption process. From the review, concepts and perspectives are identified that will help to forecast future of the development of contactless payment based on its lifecycle.

Beside the drivers of technology adoption, many studies have argued that there are other factors that contribute to the adoption process. The key factors that directly contribute to the changes in the organisation are management characteristics and consumer behaviours and trust in the technology. This project does not cover all aspects of the literature and does not claim that the frameworks are relevant for all businesses industries, however the study acknowledges that it depends on the circumstances of the sectors where the technology is applied and will focus on the case study that is Contactless Payment.

The study seeks to achieve the following objectives:

1. To review the relevant literature of the adoption of adapted new-tech product towards consumer behaviour of consuming the Contactless Payment and the relevant issues
2. To find consumer trust and behaviour at the moment and in near future with regards to technological changes such as the mobile technology advancements
3. To investigate the relevant factors which contribute to new-technology product preferences and its concerns
4. To classify prediction of contactless innovation in the future and its lifecycle
5. To explore the personal trust and behaviour of the consumers to Contactless payment.
6. To understand to what extent consumers use Contactless Payment for their payment and will use in future.

Significance of the Study

The aim is to develop knowledge on the inability of the RFID contactless payment method to achieve wide and massive usage based on a cases study of the contactless payment technology, despite having more gained an 80% awareness regarding its efficiency, quality and security. To address the problem, the research will limit its scope to the nature and impact of consumer trust and behaviour towards technology, focusing on the RFID contactless cards. Therefore, this information will be important in addressing the problem. In addition, it will be useful in both academics and business fields. The RFID card makers, marketers, banks as well as corporations offering the services to their customers will find the information useful in developing effective business strategies. Moreover, the information is expected to act as a part of the guidelines needed in policy making at both the corporate level and the exchequer.

Study hypothesis

This research proposal believes that the problem of low level of acceptance and embracement of the contactless payment cards in the UK is partly caused by various aspects of consumer behaviour and trust towards a new technology, despite the availability of information regarding the system.

Review of Literature

Adoption of adapted new technology towards consumer behaviour and trust

Different studies have attempted to investigate and explain the adoption of adapted product development and the effects on consumer behaviour. This research has attempted to establish an in-depth understanding of consumer behaviour and trust towards various payment methods in various parts of the world (Prahalad & Ramaswamy, 2000). In the UK, adequate information is available to explain the relationship between consumer acceptance of various methods of payment and consumer behaviour and trust. For instance, online payments, mobile and conventional cards and bank-to-bank methods are intensively studied (Lee, 2009).

At the root of the new technology adoption process are the drivers of IT. Moreover, technology enhanced methods such as; online payment systems have recently received a lot of attention from researchers. As it can be seen from figure 1, the drivers include technology-push and market-pull, internal pressure and external pressure together with competition and innovation (Citrin, Sprott, Silverman & Stem Jr, 2000). These reasons can be exemplified in an adoption technology model, which was derived from selected sources. Beside the drivers of adoption, many studies have suggested that there are other factors that contribute to the adoption process. The key factors that directly contribute to the changes in the organization are management characteristics and behaviours, the firms culture, external network, external resources or professional expertise and the innovation itself. Using the innovation adoption model, the author incorporates the key factors and proposes a framework that conceptualises the IT adoption process (Nguyen, 2007).

Adhiarna, Hwang, Park and Rho (2013, p.45) views the factors, which influence the adoption of new technology to be within the organisation and among the customers. Within the organisation, internal and external factors play a significant role and within the customers, environmental and individual factors play a significant role. Within the organisation skilled expertise make positive contributions to the adoption process because their skills enhance the adoption process. According to Adhiarna, Hwang, Park and Rho (2013, p.3), the other factors include information technology and its capabilities, the experience people posses in using the technology, market pull and push and the maturity of the technology.

Issues

However, the adaptation of the new technology is a critical point of concern by different firms because of different issues that have been raised, which include the specifications of the technology and how it fits into the organisations infrastructure (Avoine 2005). In addition, the characteristics of the user, institutional culture, psychological factors, and information technology are other contributing factors to technology adoption (Mukherjee &Nath 2003). On the other hand, the cost of the technology is a significant point because it involves determining the cost benefits of implementing the technology. Other issues include the capability of the organisation to accommodate the new technology.

The new-tech adaptation such as the RFID provides users and the organisation with the ability to enhance the supply chain of the products and services they have to offer to the customers (Boye 2008). Here, the system enables the users to be able to track the movement of products in the provision of services to the customers and to make precise predictions about the future demand for the products and services, the sales levels and to track the inventory levels and establish the tends in consumer behaviour. Here, organisations understand the potential cost implications (Nemoto, Vasconcellos & Nelson 2010). According to Baude, Ender, Haase, Kelley, Muyres and Theiss (2003, p.40), adapting to the use to use contactless payment systems have raised different issues, which include the security of the system, intrusion into the potential privacy of the consumers or the customers, and other relational costs. It has been established that when the financial privacy of the customers is violated, the implications become even more expensive and the resulting implication become even more crucial for the firm in terms of confidence and compensations costs (Ngai, Suk & Lo 2008).

Perceived security

Wal-Mart is one of the examples, which provide a platform for using the RFID system, which raises security concerns, which arise because of the use of the system. One example of concern is the use of the illicit movement and access of RFID tracking tags. Accesses to such tags, which are easily readable, pose serious threats to the security and privacy of personal data (Chen 2008). Google wallet is another example of contactless payments systems, which are vulnerable to brute force attacks. However, standards have been developed to secure applications and ensure that security holes are completely removed. Secure elements make it difficult for applications to be compromised and one example is the SIM Alliance developed the Open Mobile Application Programming Interface (API) (Chen 2008).

The security of the contactless systems such as online systems has been researched on and has been established to be a crucial element of the systems (Prater, Frazier & Reyes 2005). Threats such as unauthorised access to private data and intentional access or modification of network data may lead to the loss of availability, confidentiality, and availability of information (Pramatari &Theotokis 2009). For example it is possible for one making some payment using the online payment system to have their information accessed by a third party such as an hacker using software tools, or someone using phishing to access the credentials of the user by gaining access to an online account (Pikkarainen, Pikkarainen, Karjaluoto &Pahnila 2004).

Security is a major concern in the adoption of the contactless payment systems because the threats negatively influence the perceptions of the security of the payment system (Domdouzis, Kumar & Anumba 2007). Researchers have conducted detailed studies on the perceptions and influence of security and established that circumstance, condition, or event with the potential to cause economic hardship to data or network resources in the form of destruction, disclosure, modification of data, denial of service, and/or fraud, waste, and abuse constitute the security of the contactless payment system (Puliafito, Cucinotta, Minnolo & Zaia 2010). If the perceptions that the system is insecure, the use of the system or its adoption is likely to suffer a blow and the consequences, which include financial loss are likely to cause a negative effect on test adoption (Dubinsky 2012).

To address the consumer dilemma on the adoption of the contactless payment system and improve customer satisfaction and acceptance relies on the ability to create positive perceptions about the use of the system and the benefits accruing from its use compared with the risks associated with the adoption of the technology (Dubinsky 2012). In addition, companies such as Wal-Mart use the anti-employee-theft and anti-shoplifting technology to track and items, which are stolen or lost. Once an item has been stolen, it passes through the exit scanners, which raise an alarm if the item was not registered and having existed legally from the system (Dubinsky 2012).

Perceived Privacy

Perceived privacy is the extent to, which a consumer has the right to control the collection and use of his/her personal information via RFID technology. RFID-based application systems pose various threats to personal information privacy (Shin 2009). For instance, it is possible for someone to eavesdrop on the purchasing patterns and behaviour of a customer, and develop a profile of the customers private life (Dubinsky 2012). Such profiles can be accessed by a third party, which is directly related with the leakage of private data of a customer (Shin 2009). Privacy issues, which include the ability to track the customer and access to the private information of the customer, contribute to the privacy issues of adopting the new contactless payment system (Henrici & Muller 2004).

Financial implications

A range of financial implications, which have been noted to exist on the use of contactless payment systems have not been documented so far and the relational costs have not been fully documented (Roussos 2006). In additions, the implementation of the contactless payment system is rooted in the relationship between the consumer and the organisation. Here, the issues, which arise, include consumer privacy, the relationship between the consumer and the business organisation offering the products and services, the security of the payment system, and the use of the contactless payment system to financially compensate for the services and products being offered by the companies (Roberts 2006). While the concerns have raised the stakes of the lawmakers to protect consumers and their privacy such as using privacy policies to inform the users of the contactless payment system on their roles and responsibilities to protect the systems and mitigate the perceived threats and adverse effects, which result from the implementation of the system, the use of the contactless system has always been positively perceived (Rogers, Jones & Oleynikov 2007).

Here, it is critical to note that many organisations use the RFID technology to determine the customer behaviour and attitudes towards adopting the use of the technology and to determine the purchasing behaviour of the customers (Reyes & Frazier 2007). In addition, the contactless system enables the consumer based companies to understand the how customers respond to the use of the RFID technology by collecting data from different sources based on market oriented perspectives (Hossain & Prybutok, 2008). Typically, the perceptions of the consumer towards their privacy, the extent the consumer is able to sacrifice their privacy, the level of personal tolerance to exposed data, and the performance of the system to guarantee the privacy to the customer influences the sacrifice a customer can make in adopting the technology (Hossain & Prybutok, 2008).

Consumer Behaviour of using Contactless Technology now and future

According to Meyer, Germano and Perriard (2010, p.45), consumer behaviour is influenced by a host of factors, among which include the level of acceptance of the technology, market orientation, persuasive communications, privacy expectation, security, trust, commitment, threat severity and susceptibility, positive word of mouth, and repurchase intentions (Rao 2002). However, is crucial to note that the slow rate of adoption of the technology is because companies, which have adopted the technology fail to consider certain aspects of consumer behaviour, which negatively affect their trust in the specific payment method (Zmijewska 2005). For instance, consumers have always known the existence of online and mobile payment methods (Roussos 2006). As large number of consumers decide to go for the technology, but their ability to use or preference on the methods are limiting (Jonker 2007). The primary explanation given by various studies is that consumers have information about the presence, effectiveness or benefits of the methods, yet they lack information on how to use the technique. According to Pikkarainen, Pikkarainen, Karjaluoto and Pahnila (2004, p.7), the customers tend to shy away from applying the method.

The use of external or internal stimuli to motivate and stimulate a certain response in the consumer to use an online payment system depends on learning outcomes of the use of the technology, the perceptions about the technology, and the beliefs and attitudes about the technology (Meyer, Germano & Perriard, 2010). A consumer who has a positive attitude to a technology is likely to be attracted to the use of the technology and one with a negative attitude is likely to shy away from using the technology. Other factors include self concept, occupation, lifestyle, economic status, personality, family, roles, and the social class system (Meyer, Germano & Perriard, 2010).

Perceived cultural influence

Culture is defined as the beliefs, value systems, norms, or behaviours of a given organisation, or society (Yagi & Jarvenpaa 2005). The perceived culture influence on RFID technology is, therefore, the degree to which an individual believes that his or her societys beliefs, value systems, norms, or behaviours could influence (Weis 2003) the use of RFID technology. Culture is seen from the context of the willingness or intention to use the technology. Culture has a strong influence on the perception of the members of a society on the use of the RFID technology (Bandy & Peeters 2006).

Applying the contactless technology into the framework lead to the issue of consumer behaviour and its relationship with consumer acceptance of online payment methods has been studied (Luarn& Lin 2005). According to Wang, Chen, Ong, Liu and Chuang (2006, p.56), most of these studies indicate that consumer trust and behaviour play an important role in determining the progress, acceptance and applicability of any method of payment available in the market.

Environmental Factors

Research has shown that environmental factors have a strong influence on consumer behaviour. Environmental factors, which are relevant to the adoption of the technology, include security issues (Janz, Pitts & Otondo 2005). Securing the system against vulnerabilities and attacks from external sources is an environmental problem that needs to be addressed (Sharma, Citurs & Konsynski 2007). Another environmental factor that influences the adoption of new technology is the technological environment. It has been established that changes in the technology platform and the effectiveness of the technology is another factor that influences the adoption of the new technology (Jaselskis & El-Misalami 2003). It has been demonstrated that when the technology platform is old and incompatible with new technologies the adoption process slows down for both the consumer and the organisation that uses the technology (Jonker 2007).

Cultural factors

Cultural factors have been shown to positively or negatively influence consumer behaviour. According to Jones, Clarke-Hill, Hillier and Comfort (2005, p.49), the cultural factors include the perceptions, values, and beliefs of individuals and their preferences towards the adoption and use of the contactless payment system. Apart from cultural factors, there are cultural trends, which are influenced or affected by social pressure, equally have a distinct impact on the adoption of the contactless payment system. Here, social pressure results from the dynamic changes and the need to change and adopt new and emerging technologies by all people in the society (Ramchand, Devadoss & Pan 2005).

Social factors

According to Jones, Clarke-Hill, Hillier and Comfort (2005, p.34), it has been established that society is always changing with changing technological, social factors, and culture. For instance, if a member belongs to a certain reference group, which adopts the contactless payment system into their financial transactions, it becomes possible for the other members of the reference group to be influenced into adopting the payment system (Schmitt, Thiesse & Fleisch 2007). On the other hand, aspiration groups can influence a person to adopt the technology even if the person does not belong to a reference group (Scharfeld 2001).

The success of the influence by a reference group depends on different people with different characteristics, which include the initiator, who is the person responsible for suggesting to others to adopt the technology (Juban & Wyld 2004). On the other hand, the decision make is a person responsible for influencing the group on the type of contactless payment system to adopt, and the buyer depends on the influence of the two parties to buy and consume the product (Sarma, Weis & Engels, 2013). Other social factors include the family, the social status, persona factors such as income levels, age, lifestyle, psychological factors such as intrinsic and extrinsic motivation, belief and attitudes, perceptions, and self concept (Juban & Wyld 2004).

Relevant factors to new-technology Adaptation

Despite the security issues such as by pass authentication and brute force attacks and other risks and threats of using the contactless payment systems, different firms have gone ahead and adopted different payment methods depending on the underlying needs and organisational goals and business objectives. According to Karygiannis, Eydt, Barber, Bunn & Phillips (2007, p.76),Google uses the contactless NFC system and the e-wallet, which enables people to carry out online transactions and to make payments for the services and products they enjoy by signing in to their online accounts to access and use their credit card information to make the payments.

Organisational factors contribute a significant deal to the adoption of adapted product development based on technology drivers, which are internal to the business environment. Here, the size of the firm, which is n terms of the people who work in the organisation, the culture identity, behaviour, knowledge, and structure of the firm are organisational factors, which contribute to the adoption of adapted technology (Prahalad & Ramaswamy 2000). The adoption of adapted product development is influenced in the organisation by the above factors, which give the organisation its nature. For instance, developing countries use cooperatives to improve the prosperity of the societies and the resulting financial transactions use novel mobile payment systems such as the QR-Pay system to transaction between customers (Yang 2005).

The organisation, which integrates the technology into its operations and the approach the organisation uses to integrate the technology into its operations influence the adoption of the adapted technology into its transactions. Here, the management factors such as behaviour and the type of people who work for the organisation are some of the organisational factors, which affect the rate and degree of adoption of the technology (Yang, 2005). In addition, it has been established that the decisions made by the top management influence the outcome of the adoption process, because the management decisions influence or affect the way organisations make their adoption decisions (Gregory, Kuhn & Sines 2000). In addition to that, other organisational factors that influence the adoption and innovation process include the applied research and the marketing and manufacturing of the technologies (Lin 2009). However, in this study, the focus is on contactless payment card system, which is a technology that has already been created (Yang 2005).

Researchers agree that the involvement and knowledge of employees within the organisation on the current and emerging trends of contactless payment system contribute to the adoption process of the new technology (Ranky 2006). Here, the implementation and adoption of the contactless payment system within the firm becomes successful because the commitment and knowledge of the employees contributes to the generation of new knowledge, which promotes innovation. Management plays a significant role in facilitating the diffusion of innovation within the firm involving the employees of the organisation (Juban & Wyld 2004).

However, it is important for researchers to understand the organisational factors which inhibit the adoption of the new technologies, which include lack of training, lack of understanding, lack of sufficient knowledge and skills on the use of the technology, lack of top management support, and the perceived complexity of the use of the technology (Sorrells 2000). It is important to note that, in the organisational context, users may reject the adaption and adoption of new technology because it is incompatible with their beliefs, values, past experiences, and when the adoption is extended to the consumer, the social systems of the consumers contribute a significant extent to the level of adoption of the new technology, which is demonstrated below by the Rogers innovation adoption curve (Juban & Wyld 2004).

The adoption of adapted new product development has enabled firms to make significant investments to align their businesses to their strategic objectives, which enables them to provide extended contactless payment system quality, functionality, development, and to enable innovation, which reflects the changing consumer behaviour and emerging innovations of the payment system (Sorrells 2000). Many of the firms in the UK have realised the benefits of adopting technologies to address the changing needs of the market and consumer behaviour (Kim & Garrison 2010).

Organisational culture

Employees

Employees are the most crucial in the adoption process of firms of the contactless payment system. Employees; contributions to the firm include their skills and knowledge towards the firms. A firm can rise if the perceptions and attitude of employees are positive and make positive contributions to the firms and that results to positive financial contributions to a firm (Konsynski & Smith 2003). When employees have negative attitudes, it becomes difficult for them to make positive contributions and that can result in financial loss to an organisation. Positive or negative financial contributions result from the success of a firm depends on the ability of the firm to integrate the contactless payment system into its day to day financial transactions. Once the contactless payment system has been integrated into the firms operations, financial transactions are usually done in real time and the cost implications are low as compared to the use of other payment or financial transaction systems (Konsynski & Smith 2003).

Here, it has been established that when employees are made to feel to be part of the team or family of the adoption process, their contributions to the adoption process becomes significant. Here, employees require clear communication, clear knowledge on their status in the firm, clear knowledge of the firms human capital, and need to understand the importance of the adoption and innovation of the contactless payment system in improving the financial system performance of the organisation. It is important to note that involving employees in the change process is crucial in the adoption o adapted technologies and their innovation (Lee & Shim 2007).

Technology Acceptance

Research by Davis (1985, p.34) shows that technology acceptance depends on the perceived ease of use and usefulness, which results to the attitude a person develops towards the technology and the resulting behavioural intentions to adopt and use the technology. New technologies are difficult to introduce into the market and the returns on investment can be slow if the acceptance rate is slow (Venkatesh & Morris, 2000). On the other hand, researchers have realised that effort expectancy, the expected performance of the technology, and the social influence contribute to the degree of acceptance of the technology (Wu & Wang, 2005). According to the research, performance expectanc

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