The Impact of Perceived Risk and Trust on Adoption of Mobile Money Services: An Empirical Study in Pakistan

In Pakistan, usage of mobile money services is very poor due to several reasons including lack of understanding of services, low financial literacy rate, and fear of losing their hard-earned money. Moreover, the association between perceived risk, perceived trust, and mobile money adoption has not yet been examined comprehensively. Therefore, this study aims to assess the impact of perceived risk and perceived trust on the adoption of mobile money services in Pakistan. This study carried out a cross-sectional survey using a standardized questionnaire to collect primary data from the mobile money users in the Punjab Province, Pakistan. Smart-PLS Algorithm and bootstrapping method were employed to analyze the data. The study found that three dimensions of perceived risk, namely, security risk, privacy risk, and financial risk have a significant impact on adoption of mobile money services in Pakistan. Perceived trust was also found to be a significant factor for mobile money adoption in the country. Moreover, the respondents reported that mobile money services save their time and reduce costs in performing financial transactions. The empirical findings of the study might be useful for the policymakers and service providers in enhancing the usage of mobile money services among financially-excluded segments of society.