THE IMPACT OF DIGITAL PAYMENT APPS

AS THE MODE OF PAYMENT IN BARANGAY QUIOT

A Thesis Proposal

Presented to the

Faculty of the English Department

Asian College of Technology

Cebu City, Philippines

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In Partial Fulfillment

of the Requirements for the Subject Practical Research 1

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by

Cabajar, Stephanie

Carpio, Earl James

Catajusan, Trixy

Cuaresma, Kyle Samantha

Guyos, Marie Daffodil

Melendres, John Desiderio

Padasas, Kedia

Tigtig, Jerah Mae Fiel

Tolentino, Kathleen

June 2023
 CHAPTER 1

THE PROBLEM AND ITS SCOPE

1.1 Rationale of the Study

Digital payments were harnessed to respond to the COVID-19 shock, and the crisis

accelerated its use and development. The importance of this study is for the people to

know both the positive and negative impacts of digital payment methods specifically to

the respondents of the Barangay Quiot as their means of paying their electric bills, water

bills, etVBc. This research will help individuals to become more aware and knowledgeable

when using the digital mode of payment. The respondents of the Barangay Quiot are

willing to participate in this research to really know the concept behind this method of

payment. With that said, people will know that this payment method is safe and

convenient to use. The study's focus is on Barangay Quiot, a small area in Cebu City

where cash transactions are still the norm. We seek to provide insights into the potential

advantages and problems of moving to digital payment applications for other comparable

communities by examining the adoption rate, effect, obstacles, and prospective benefits

of these apps in this community.

Digital Technologies like Facebook and Google are very well-known in all parts of the

world. According to a survey done by HootSuite, a social media platform management

company, 4.95 billion people around the world have gone digital as of January 2022–

equivalent to 62.5% of the world’s total population. According to Louis Rossetto, founder

and former editor-in-chief of Wired magazine, no product is made today, no person moves

today, nothing is collected, analyzed or communicated without some ‘digital technology’

viewing bank statements, applying for loans, and conducting fund transfers, it is now

possible through digital means. Understanding the impact of digital payment apps on a

small community like Barangay Quiot is essential in identifying the challenges and

benefits of transitioning to digital payment apps for other similar communities.

Furthermore, this research will also add to the body of information on the effects of

digital payment applications on regional economies and communities by serving as a

basis for further study on the subject. Overall, the results of this study will be helpful for

politicians, companies, and customers who are interested in switching to digital payment

applications in areas like their own.

1.2 Statement of the Problem

As part of the global response to COVID-19, the digital finance industry has played a

key role in developing and providing services and innovations to the people. Digital

payments were able to sustain the imposed protocols in several regions and helped

reduce the spread of COVID-19 as people used this payment method as an alternative

way to run and manage the financial aspects of their lives in light of extended periods of

lockdown, physical distancing, and livelihood disruptions.

This study is focused on finding out the impacts, whether it be positive or negative, of

digital payment methods. Nowadays, we already know this type of payment method

during the start of the pandemic as a way for citizens to pay their fees, bills, etc.

This research will focus primarily on Barangay Quiot citizens and their opinions regarding

this matter. This research will strive to answer the following questions:

● Is the digital payment method safe and secure?

● Is the digital payment method effective and useful?

● Which is a more convenient payment method, digital payment methods or over-the-

counter payment methods?

Despite the recent growth of the digital payment industry, cash transactions still

dominate in the Philippines. The country's low bank population is one factor driving its

slow growth rate (Remo, 2018). However, considering the high percentage of mobile

phone usage in the country, electronic transactions have a lot of potential. Nonetheless,

infrastructure, regulatory issues, and merchant buy-in are all obstacles that must be

solved for the business to become viable. To promote digital payment usage in the

country, businesses must first address and build customer knowledge and trust.

According to the Bangko Sentral ng Pilipinas (BSP) Financial Inclusion Survey 2017, most

Filipinos still have no bank account due to failure to maintain the balance needed for these

accounts. BSP reports that only 15.8 million or 22.6% of the total population own a bank

account, mainly driven by a perceived lack of need, lack of necessary documents, and

high costs.

In the Philippines, most digital payment methods do not require a bank account and

are widely accessible via mobile phones. Filipinos can use digital payment platforms more

easily thanks to applications like GCash and PayMaya. Digital payment systems, which

do not require bank accounts, offer a lot of potential in a low-bank country like the

Philippines. To provide a more adequate explanation of digital payment systems, this

study will be based on the Technology Acceptance Model and the Theory of Reasoned

Action.

According to the Technology Acceptance Model (TAM), two criteria affect whether a

computer system will be adopted by its potential users: Perceived Usefulness and
Perceived Ease of Use. The emphasis on the potential user's perceptions is a

fundamental component of this strategy. That is, while the inventor of a technology

product may believe it is valuable and user-friendly, potential users will not accept it until

they share those sentiments.

The actual system used is the endpoint where people use the technology. Behavioral

intention is a factor that leads people to use technology. Behavioral intention (BI) is

influenced by attitude (A) which is the general impression of the technology. The model

suggests that when users are presented with a new technology, a few factors influence

their decision about how and when they will use it, notably:

Perceived usefulness (U) is "The degree to which a person believes that implementing

a particular method would boost their job performance," according to Fred Davis. It refers

to whether or not someone considers a piece of technology to be beneficial for the task

at hand.

Perceived ease-of-use (E) "The degree to which a person believes that utilizing a

given system will be free of effort," Davis defined it. The hurdles will be overcome if the

technology is simple to use. No one has a positive opinion of something if it is difficult to

use and has a convoluted interface.

External variables such as social influence is an important factors to determine the

attitude. When these things are in place, people will have the attitude and intention to use

the technology. However, the perception may change depending on age and gender

because everyone is different. TAM is one of the most influential extensions of Ajzen and

Fishbein's Theory of Reasoned Action (TRA) in the literature. Davis's Technology

technology. It was developed by Fred Davis and Richard Bagozzi. TAM replaces many

of TRA's attitude measures with the two technology acceptance measures—ease of use,

and usefulness. TRA and TAM, both of which have strong behavioral elements, assume

that when someone forms an intention to act, they will be free to act without limitation.

The Technology Acceptance Model is significant in our study because it is used to

better understand the views of people using digital payment methods. Technology has

evolved into a tool that encourages access to and use of up-to-date information resources

to increase productivity and development. The capacity to successfully use technology is

critical in the 21st century for efficient access and usage of information resources. The

inability to demonstrate expertise in this area can contribute to people avoiding

technology, which has been identified as the primary barrier to embracing new

technology. Understanding technological acceptability will help forecast how new

information resources will be used.

Theory of Reasoned Action (TRA)

The TRA presupposes that the conduct being investigated is under volitional control,

meaning that people feel they can carry out the behavior whenever they want. The TRA

began to be utilized more frequently for the research of behaviors in which control was a

variable component throughout time. The TRA was supplemented with a component

called perceived behavioral control for this purpose. This idea describes the amount to

which people believe they can undertake the behavior because they have sufficient

talents and/or opportunities, or because they lack them. Because many behaviors require
specific abilities or external facilities, it is easy to understand how this element might

significantly improve the model's universality of application.

Developed by Martin Fishbein and Icek Ajzen in 1967, the theory was derived from

previous research in social psychology, persuasion models, and attitude theories.

Fishbein's theories suggested a relationship between attitude and behavior.

The TRA's main goal is to better comprehend an individual's voluntary behavior by

looking at the underlying core motive for doing something. This is what makes this theory

significant in our research: To know the behavior of people when it comes to using digital

payment methods. According to TRA, a person's intention to do behavior is the most

important determinant of whether they do so. Furthermore, whether the person will really

conduct the activity is influenced by the normative component. The notion states that the

intention to conduct a specific behavior comes before the actual behavior. This is known

as behavioral intention, and it arises from a conviction that engaging in the behavior will

result in a specific result. The idea emphasizes behavioral intention since it is "influenced

by attitudes toward activities and subjective norms."

This study can give benefits to future researchers with the necessary information they

will be needing in studying and investigating the effectiveness of digital payment methods

as a means of managing the financial aspect of people’s lives in a very crucial and

turbulent part of history.

Future researchers will provide the necessary information for this study.

Researchers can build upon the findings, refine methodologies, explore additional

variables, and delve deeper into specific aspects of digital payment effectiveness. This

study can be advantageous, especially for individuals who use digital payments. We can

learn how it functions in daily life and what effects it has on our society. Digital payments

can help reduce fraud and increase transaction speed, while traditional payment methods

like paper checks can take days or weeks to process and complete. The recent COVID-

19 pandemic further increased digital payments, especially for merchant payments is one

example of how using digital payment apps has an impact.

Consumers have begun seeking digital payment methods in place of cash for safety

reasons, which has accelerated the popularity of digital payments. This study’s

significance lies in its potential to inspire and guide future research, contributing to the

advancement of knowledge.

Future researchers will find this study as a great help to make them come up with

the idea and information they will be needing in studying the effectiveness of digital

payment methods.
1.5 Scope and Limitation

The scope of this research focuses on the impact of digital payment apps as the mode

of payment specifically in Barangay Quiot. It investigates the community's adoption of

digital payment apps, their effects on the local economy, their difficulties, and any

prospective advantages.

Data will be gathered for the study through surveys, interviews, and the examination

of relevant statistical information related especially to Barangay Quiot. It will look at how

local companies, financial institutions, and community people feel about using digital

payment applications. However, it’s crucial to recognize the limits of this study. The study

is restricted to Barangay Quiot and might not offer insights that are relevant to other

neighborhoods in Cebu City or the Philippines in general. The distinctive qualities and

dynamics of Barangay Quiot may have an impact on the findings and conclusions.

Additionally, the technical components of digital payment applications or their

creation will not be included in this study. The socioeconomic effects and difficulties of its

acceptance and use in Barangay Quiot will be the main points of discussion. The study

depends on participants’ self-reports and their subjective experiences, which might

introduce biases and have restrictions on accuracy and generalizability. Finally, the study

only takes into consideration the socioeconomic environment in which it is being

completed, it makes no attempt to predict how technology, laws, or consumer behavior

may grow or alter in the future.

The following technical terms are operationally defined to help the readers

understand the concepts used in this study.

Bank Statements. A list of all transactions for a bank account over a set period, like

deposits, charges, and withdrawals, as well as the beginning and ending balance for the

period.

Digital Financial Services. A type of financial service where payments, remittances, and

credits are accessed and delivered through digital channels, including mobile

devices.

E-Learning. A type of learning conducted via electronic media, typically on the internet.

Impact. It refers to a strong effect on someone or something.

Loans. A form of debt incurred by an individual or other entity

Over-the-Counter Payment. A payment method where customers deposit the money in

person at banks or at retail stores.

Technology. It refers to machinery and equipment developed from the application of

scientific knowledge.

Digital payments. The use of electronic payment methods to transfer funds between

individuals or entities, such as through mobile payment apps, online banking, or digital

wallets.
COVID-19 shock. The economic disruption caused by the COVID-19 pandemic, led to

changes in consumer behavior and a shift toward digital payment methods.