Debit card purchases and Internet banking – Perception, planning and implementation

Chapter 1: Introduction

Over the years, the financial industry has undergone tremendous changes in its operation methods, with banks experiencing the most considerable impact relating to financial reporting and changes in the method of service delivery (Ray & Ghosh, 2017). The continuous shift in the market is the main contributor to these changes, with significant factors including the rising competition by non-banking institutions, customer banking preferences and tastes, shifting demographics, and technological development and innovation. Revolution in banking was initiated with the developments in technology leading to online modes of banking and centralized operation of the branches of financial institutions. Internet or online banking is facilitated with the electronic system of payment enabling the customers to conduct multiple kinds of financial transactions like deposits, balance enquiry and funds transfer using the website of the financial institution (Alalwan et al., 2018). Revolution in the banking industry can be attributed to the enhancement and development of new technology in the domain of information processing and telecommunications leading to a seamless banking experience.  The Internet has greatly influenced the delivery channels of banks as financial intermediaries can now get access to geographically distant and diversified markets (Steinbock, 2005). Core banking operations through the establishment of a connection with the centralized server have been possible due to the internet allowing the transition from traditional branch banking.

Communications over the internet have sped up the interactions between customers and banks. Innovations in information and communications technology have enabled e-channels to execute banking services that were previously strictly conducted over the counter (Alsayed & Bilgrami, 2017). Such advancements and digitalization of the banking operations have minimized the waiting times for the customers in the banks and enabled them to receive fully automated services at their convenience using internet banking facilities (AlMohaimmeed, 2012). These developing trends of online banking raise critical matters in users’ banking choices and behaviours. For instance, in the previous years, the customers had to physically visit a bank to apply for a mortgage or make a deposit. However, loans can now be applied from the comfort of one’s home using a smartphone or a computer connected to the internet.

Internet banking and the use of digital cards like debit cards and credit cards have increased the convenience for banking consumers to make purchases in retail stores and online marketplaces (Alalwan et al., 2018). Besides, to improve the quality of service and reduce the time and cost of operations, the banks have initiated the use of online systems and card purchases. As per Mukhtar (1970), online banking was initiated in the UK in 1982 through the partnership of the Bank of Scotland and British telecom for launching the Nottingham Building Society’s Homelink services. This enabled the electronic transfer of money among accounts and payment of bills by using the Prestel view link.

At present, the debit cards used by the bank customers can be used as an ATM card to withdraw cash along with being used at the POS of retail stores and online purchase transactions (Namahoot & Laohavichien, 2018). Online banking involves creating a website or application that eventually provides information about the various banking and financial services that can be used by the consumers including their flexibility of real-time operations. Consumers have access to various card products and accounts such as deposit accounts, prepaid and debit cards, gift, and loyalty cards. Services like transfer of funds, account management, and statement payments are also offered online (Mukhtar, 1970). ‘Banks’ view of online banking has been positive as it reduces congestion in service delivery, reduces costs around operating a physical bank, and ultimately the additional revenue source.

The acceptance of debit cards and online banking is influenced by the trust factor of the consumers regarding electronic finance. This is due to the existence of interdependence along with risk and uncertainty. On the other hand, consumers experience different reactions on the matter of internet banking (Tan & Anchor, 2017). The common answer most users provide for why they prefer online banking is convenience. The perception of business entities towards internet banking and debit card purchase includes the delivery of greater convenience to the customers and increasing the volume of sales. This is due to the psychological aspect of tending to spend more money in shopping by making payments through debit cards and online banking in comparison to using cash that may not remain available and remain present in limited quantities (Van Winkle, Bueddefeld, Halpenny, & MacKay, 2019). However, the use of debit purchases and e-banking involves more than just convenience. Comparing the amount of profit brought in from online transactions versus other sources clearly shows that less income arises from e-transactions. This indicates that despite the narrative of growth in internet banking, there still a good percentage of people not ready to shift. This is due to the trust factors of the banking customers concerning the safety and reliability of online banking transactions. The charges levied on debit cards and internet banking charges are not well accepted by a portion of the population due to being charged for using their own money. Additionally, there remain concerns regarding the security of transactions and the protection of their data.

Most customers use online services for non-profitable activities such as checking account balances. Online banking creates the opportunity for more non-profit customers to join the bank rather than committed customers (Wheelock & Wilson, 2012). Consumers who have a very sceptical perspective about online banking use base their arguments mainly on security concerns. Moreover, some clients feel that online banking is inconvenient as it lacks personal banker relationships, is affected by technology interruptions, and has limitations to deposits (Koshae., 2019). With widespread hacking cases, the fear of losing money from online platforms is still a driving factor. Ironically, some customers perceive that to be the bank’s problem and will continue to participate in online banking and debit purchases services (Carretta, Farina, & Schwizer, 2017). The factors influencing the use of debit cards and internet banking despite the implementation of additional charges by the banks include the hassle-free nature of transactions without the requirement of carrying and counting cash along with the convenience of safekeeping a card in comparison to bundles of currency notes (Pal, Khethavath, Chen, & Zhang, 2017). The topic of the research is to evaluate the perception of business entities and consumers regarding purchases made with a debit card and internet banking along with examining the factors influencing such decisions.

Statement of the Problem

As per Rahi et al., (2020) internet application in the banking industry and online purchases has been rapidly increasing in the past decade offering numerous services in real-time across any geographical location attracting millions of users. The proliferation of developments in the domain of information and communications technology has been integrated into the banking and financial systems resulting in the formulation of digital methods of transactions using debit cards and credit cards along with the wide acceptance of internet banking services (Alsayed & Bilgrami, 2017). However, the perceptions regarding the use of debit cards and internet banking for purchases along with their influencing factors remain different for business organisations and online consumers. This is mostly due to the difference in the interest of both the parties along with the concerns regarding the implementation of surcharge and additional charges for maintaining and operating the debit cards and availing internet banking services.

The research problem spans the predominant concerns regarding the use of debit cards and internet banking services by the consumers include trust factors concerning the security and reliability of the model of the transaction along with the protection of the personal banking details. The increasing instances of online banking frauds and social engineering for hacking the personal and banking details of the customers have raised alarm among the banks and clients alike (Carretta, Farina, & Schwizer, 2017). This has also resulted in second thoughts for the consumers regarding the use of the digital mode of payment along with creating confusion regarding the accountability of the customers in the banks in case of fraudulent occurrences. Additionally, with the internet application being open-source, its application within the banking sector and debit card purchases are prone to various risks and security threats. These risk factors are perceived differently by individual customers, limiting their usage based on the services provided.

The PayPal fraud incident between October and December 2019 resulted in a loss of almost 2 million dollars. The individual who was majorly targeted by the fraudsters were sellers who sell households, furniture, phones, vehicles, and electronics on the available online platforms (Pal et al., 2017). The incident occurrence triggered the fear and negative perception of many PayPal users. This led to the organization improving its security features and policies to win back its users’ trust, especially the affected ones, and offer competition to its competitors. This also made the company work closely with regulatory bodies and law enforcement agencies (ACTION FRAUD, 2020).

Purpose of the Study

This research paper aims to determine how business organizations and online consumers perceive debit card purchases and internet banking and examine the factors that result in the implementation of debit card purchases and internet banking. This research intends to provide more information regarding the perspectives of the consumers and business entities regarding purchases made through online banking and debit cards along with properly identifying the risk factors that are inherent to the use of internet banking and debit cards for making purchases. Undertaking the activities in this investigation has also contributed towards the identification of the perceptions of the customers and business entities regarding the internet banking and debit card purchases along with the democracy of use of the transaction mechanism. Solutions and recommendations are also offered in the research for improving the trust of the consumers and minimizing the risks of digital modes of payment. The research also has the purpose of evaluating the risk perception of banking customers that signifies their intent to accept and use a debit card and online banking for purchase. This is to be identified through the administration of an interview during data collection containing open-ended questions.

Introduction to Theoretical Framework

The two theoretical concepts that are to be used for the accomplishment of the investigation include the “perceived risk theory” and “unified theory of acceptance and use of technology 2 (UTAUT 2)”. The perceived risk theory had been formulated by the research of Bauer (1960) during the evaluation of the risks that are associated with the behaviour of the consumers. This theory explains the reason for the consumers to not move from the state of desire to act or identifying the need for a product but not making the final purchase decision. The UTAUT 2 theory had to the analysis of the consumer perceptions considering the instances of adverse outcomes that are recurrent. This has been done by evaluating the decision making associated with a and the future likelihood of purchase by the consumer (Dowling, 1986). Perceived risk is a component of the theory of consumer behaviour indicating the decision making and thought process of the consumers while making a purchase decision. The use of the perceived risk theory is crucial for businesses to identify the strategies that can be taken for overcoming the issue of trust and dilemma of the consumers leading to a halt in their purchase decision. This theory can be associated with the perceptions and concerns of the risk of the consumers regarding the use of debit cards and services related to internet banking. The types of perceived risks of the customers involved functional risk along with physical and financial risks. According to Tian-Que (2012), the functional risk indicates the concerns of the customers regarding the functioning of the product whereas the physical risks integrate the doubts of the customers regarding the safety of use. Financial risk concerns of the customers translate to their concerns regarding the return on investment after purchasing the product whereas the social risk means the customers are hesitant to purchase from a brand having a lower reputation in the market for the products being surprised at the economy. Time risk of the customers translates to the expenditure of time during the purchase of a new product.

The consumers have been identified to tend to seek external support while making high-risk purchases like large appliances and electronics, jewellery etc. This is done to guide their decision regarding the purchase (Dowling, 1986). The multiple categories of perceived risk determined by the theory include functional, physical and social/psychological risks along with time-related and financial risks. All of these risks categories have the capacity to the consumer behaviours as a standalone entity or in combination with other types. It is this last type, (i.e., financial risk) that serves as the focus of the current research. Financial risk is associated with the potential losses that are perceived to occur following an investment. There is evidence of the presence of research stating the application of this theory to online banking. This has displayed showing the likelihood of potential hazards related to online transactions. A relationship has been established about this phenomenon with the probability of utilization of this service by the consumers.

            The UTAUT 2 theory was developed by Venkatesh, Thong, and Xu (2012). The theory was developed as an extension to the unified theory of acceptance and use of technology (UTAUT). The second iteration of the theory continues to apply its principles to a consumer-based context. As per Van Winkle et al., (2019) UTAUT 2 theory has been made applicable in the domain of business administration and finance research. This has been done to understand how likely a consumer base is to adopt a particular technology.  The main components of the theory which influence the likelihood and rate at which technology is accepted and adopted include (1) performance expectancy; (2) effort expectancy; (3) social influence; (4) facilitating conditions; (5) hedonic motivation; (6) price value; and (7) habits (Chang A., 2012). As applied to this research, the presence of each of these components should be evidenced in participant responses. The underlying logic for designing and conducting this study is to generate an understanding of the perception of risk associated with online banking and debit card purchases, and these factors should help categorize participant beliefs about these activities. The perceived risk theory and UTAUT 2 are related in terms of signifying the perceptions of risks while using the digital transaction methods of debit cards and internet banking for making purchases based on the expectancy of seamless payments and security.

Introduction to Research Methodology and Design

 Based on the recommendations by Kujur and Shah (2015) in regards to risks associated with electronic banking, a qualitative study design has been identified to be the most suitable to handle the research question. This study design was selected due to its scope of facilitating the researcher to collect the relevant data to achieve the research purpose (Cresswell, 2007). A quantitative design was not chosen in this study as it was not determined to be optimal considering the research question. This is because this research does not concern with relationships between variables and/or the effects of one or more variables on others (Silverman, 2016). The mixed-method uses quantitative results and qualitative findings. It is portrayed as equal parts of analysis in the report, but rather a deliberate effort is made to integrate the conclusions at some point to create new and more vibrant understandings of the answers to the questions formulated to direct the investigation (Bryman, 2012). A qualitative study involving experiences of online banking customers was determined to be optimal to assess the perception of risk that occurs concerning 100% online banking transitions.

The methodology to be employed for this investigation is that of the case study. This is relevant to the already existing phenomenon (Williams, 2011). This methodology is justified as the research questions intended to evaluate the insights of banking staff and customers regarding the online banking hazards (Bryman, 2012). This research did not determine the alternative qualitative methodologies like phenomenology to be fit for executing the analysis due to the absence of integration of first hand and lived experience (Silverman, 2016).

This qualitative research’s main objective is to determine the various perspectives of both consumers and business organizations on online banking and debit card purchases. Other objectives being: To identify the risk factors linked to internet banking and debit card purchases; To examine issues that impact the implementation of internet banking and debit card purchases; To analyse the level of both consumers and business organizations perception about internet banking and debit card purchases; To examine the effect of perceived risk on internet banking and debit card purchases; To determine the effect of demography on internet banking and debit card purchases and determine solutions on factors affecting internet banking and debit card purchases.

Research Questions

            This dissertation has employed a qualitative case study design. The following research questions are proposed:

            RQ1. What are the issues that impact the implementation of internet banking and debit card purchases by the banks?  

            RQ2. What are the perceptions of the consumers and business organizations about internet banking and debit card purchases?

RQ3. What is the effect of perceived risk on internet banking and debit card purchases?

RQ4. What is the effect of demography on internet banking and debit card purchases and what are the solutions on factors affecting internet banking and debit card purchases?

Significance of the Study

The research topic analyses the perceived risks of online banking and the use of debit cards for purchase recommend better ways of ensuring acceptance among users. Previous studies have identified the perceived risk factors of the customers about internet banking adoption to some extent but failed to evaluate and relate the same with the perception of the business organisations. This study intends to expand the knowledge of the past studies and narrow down the research gap regarding the identification of how security risk features impact internet banking adoption and the overall bank performance. The research topic is significant as it provides recommendations to the banks and delivers solutions to improve customer’s trust for accepting debit cards and internet banking as modes of payment. Additionally, managerial recommendations are also provided for the financial intuitions.

Definitions of Key Terms

            Online banking. Online banking is defined as the execution of banking services and transactions and by using the online website or application of the banks with the use of the internet (AlMohaimmeed, 2012). 

            Perceived risk. Perceived risk is defined as the belief of a consumer regarding the potential threats due to the purchase of a product including the return on investment and usage (Dowling, 1986).

            Technology acceptance. Technology acceptance is defined as the rate of adoption and uses the innovations in the domain of machinery, equipment, or service concerning ICT for improving the efficiency of work and operations (Chang, 2012). 

Summary

This segment of the research had emphasized the illustration of the background information regarding the topic of the study and outline the problem being addressed, purpose along with design and methodology. The research chapter summarized the perceived risks of safety and data protection among the banking consumers regarding the use of electronic methods for making purchases along with the additional charges for using their money. The theoretical framework discussed the two theories that are to be used in the research like the perceived risk theory and the UTAUT 2 theory. The specific research problem addressed includes evaluation of the customers’ perceived security risk involving the use of electronic means like debit cards and internet banking technology for purchases along with the inflicting factors. This qualitative and case study based investigation intends to explore the risk perceptions of the consumers regarding the use of online banking and digital transaction cards for making purchases. In regards to risks associated with electronic banking, a qualitative study design will be adopted for its suitability to handle the research question and providing the scope of interviewing with the banking clients. This study contributes to investigating and analysing the perceived risks related to online banking and recommends better ways of ensuring that more users are adopting these services.

Chapter 2: Literature Review

Introduction

Credit cards and debit cards have been introduced in the developed countries decades earlier followed by their acceptance in developing countries. The advancement of technology created a dramatic shift in the financial sector with the development of cashless payment features and internet banking (Alsayed & Bilgrami, 2017). Plastic money is one of the remarkable additions in the banking sector signifying the use of debit and credit cards mirror of hard plastics that can be used for making purchases and transactions in place of actual banknotes. The banks across the developed and developing economy provide the facility of internet banking for transactions leading to the gradual replacement of the traditional system of payment through cash. The banks and financial institutions have become more competitive for attracting customers to use debit cards and internet banking facilities by improving their services (Kujur & Shah, 2015). The consumer preference regarding the use of plastic money is also increasing gradually as people have begun to replace cash with cards while travelling as they keep them in their wallets for convenience.  This research paper evaluates the perception of businesses and online consumers regarding debit card and internet banking for making purchases.

Carrying cards in the wallet offers more convenience than large volumes of cash for monthly shopping or making payments. Also, the debit cards minimize the possibility of cash shortage for the consumers while making payments in the cash counters of retail stores. Plastic money offers convenience to the consumers but also influences excessive spending due to a lack of physical count of the amount that is spent (Van Winkle, Bueddefeld, Halpenny, & MacKay, 2019). However, consumer perceptions regarding using the digital modes of payment vary across the countries and sections of the society due to safety concerns. This is also similar for the businesses as they intend to offer the convenience of payments to the customers by accepting payments made through debit cards and internet banking but also have to include the charges of maintenance and transaction processing fees.

The literature review evaluates the risk factors that are intertwined with debit card purchases and internet banking along with evaluating its effect on the perceived risk of the consumers and businesses. The literature review has also analysed the past studies concerning the issues impacting the implementation of debit cards and internet banking for purchases by the banks along with analysing the perceptions of consumers and businesses about the modes of payment. An evaluation of the impact of democracy on internet banking and debit card purchases has been made along with an analysis of the solutions on factors that are affecting the purchases made by the digital payment methods. Multiple perspectives of the consumers and the businesses have been evaluated pertaining to the use of online banking and debit card purchases.

Risk factors linked to internet banking and debit card purchases

As per Soeng, et al. (2019), the development of internet-based digital technologies has changed the traditional method of services and delivery in the financial sector. According to Ray & Ghosh (2017), the process of delivery of banking services to the customers has been widened and made accessible across the clock. The banks of becoming more reliant on information technology strategies for remaining competitive. Internet banking services have enabled banking institutions to save costs as well as deliver better quality of customer service. However, the rate of customer adoption concerning internet banking is far ahead of the stage of acceptance in developing countries.

According to Sultana & Hasan (2016), consumers across developed and developing countries are aware of the risk factors of using internet banking services. This has impacted their attitude towards banking by using the internet due to the digital footprints and potential threats of malicious hackers. Consumers remain highly cautious regarding their online transactions made through the internet despite the growth of the domain due to multiple kinds of risks. This includes the inability of the consumers to try to execute financial transactions using the internet due to the lack of relevance to the traditional banking mechanism (Aboobucker & Bao, 2018). The inability of the consumers to evaluate the transaction physically and have access is one of the factors of risk for debit card and internet banking transactions. As per Alwan & Al-Zubi (2016), the inability of the online consumers to handle or try the transactions before decision making also leads to the inadequacy of transaction among the bank and the website that is different from the direct banking experience. The direct banking experience for the consumers increases their belief and attitude towards the clarity and authenticity of a transaction. Direct banking experiences are capable of influencing banking consumers to a greater magnitude compared to online transactions and banking. Risk factors of internet banking include operational threats like incorrect processing of transactions along with the scope of deduction of money from the bank account without the overall transaction taking place (Tham, Ab Yazid, Khatibi, & Azam, 2017). The risk also includes compromising the integrity of the data due to unauthorised access and the violation of privacy and confidentiality of the personal details of the users.

As per Alwan & Al-Zubi (2016), there are also risks of unauthorised access to the banking systems by hackers and non-accessibility of contracts. The risk factors in online banking also include human errors and negligence from the customers and the employees along with technological errors (Chiu, Bool, & Chiu, 2017). There also chances of employee frauds that create operational risks for Internet banking and debit cards. According to AlKailani (2016), there metre security risks involved with Internet banking and using debit cards for transactions. The consumers provide the highest priority to the confidentiality of the transactions. Due to the presence of the information related to banking present in the online domains, there is a scope of unauthorised retrieval and device use of the information. The threats of hacking and unauthorised access of the banking systems also increase the risks. There are also security risks associated with the system architecture and design of the online banking systems as the banks have inadequate control processes (Namahoot & Laohavichien, 2018). The context of the use of an outdated system by the bank increases the risks of transaction failures and the inability to handle huge amounts of customer data.

According to Ngugi, Sawe, Nguyen, & Bertsch (2020), debit cards are interlinked with the bank account of the consumers that lets them use the money that is available in their account for transactions and payments. The banks and financial service providers remain trying to offer debit cards to the consumers and require service charges for annual maintenance. The risks of debit cards for purchases include the possibility of fraud and unauthorised access by hackers if the card is lost or stolen (Rahi & Ghani, 2018). The debit cards have very strict guidelines that put the entire burden of accountability on the banking consumers in case of any fraud or unauthorised transactions. The debit cards offer minimum protection to the consumers while they have to pay for using their own money. The risks of debit cards for the consumers also include the lack of restriction on spending. Some of the risks of making purchases with debit cards include the lack of fraud protection and the inability to offer the scope of building credit (Ling, Fern, Boon, & Huat, 80-85). There are also two threads due to merchant disputes as the point of sale transactions are subjected to human errors. There is also a scope of being overcharged by the banking service providers.

The effect of perceived risks of internet banking and debit card purchases on the business and customers

According to Akgül, Öztürk, & Varol (2019), the strategic risk of the consumers using internet banking for making purchases includes higher costs against the potential return on investment. The businesses face the risk of being unaware of the characteristics of the consumers using internet banking for making payments. The transactional risks due to system processing errors and frauds along with other categories of disputes discourage businesses and consumers alike from using debit cards and internet banking for making a purchase. Many local businesses prefer cash over digital payment modes due to the reliability and physical evidence of the transaction. The acceptance of internet banking and debit cards increases the cost for the businesses along with the complexity of the operational processes as they are required to procure the supporting technology and improve the expertise of the staff (Ab Hamid & Cheng, 2020). The cost involved in processing the transactions discourages the businesses to accept digital payments despite having the infrastructure. The involvement of merchant fees for transaction processing is the loss of profit that the businesses have to bear for customer satisfaction and convenience (Pal, Herath, De’, & Rao, 2018). Most of the debit cards are processed by MasterCard and Visa and the businesses are required to pay a percentage of the transaction volume that is executed. This negatively impacts the bottom line of the businesses as their required to increase the prices or reduce the operational costs.

According to Alsayed & Bilgrami (2017), a chargeback is another risk faced by businesses while accepting payments with debit cards. This is because the consumers are capable of initiating a chargeback on a purchase after 6 months of the decision that puts the entire burden of the transaction on the merchant. The inability of the businesses to obtain a digital signature while the consumers make a purchase using debit cards and internet banking is a major risk for the businesses as they become incapable of fighting the chargebacks. This renders the business capable of sending a retrieval request and obtain the fee sent to the merchant account provider (Chang A., 2012). However, there are instances when the service providers take the side of the consumer while they issue chargebacks that make the businesses incapable of recouping the losses. The debit card terminal costs are also some of the risks that have to be borne by the businesses for receiving payments through debit cards. This requires a significant cost for the businesses as they are also required to obtain a merchant account for transaction processing. The perceived risks of using a debit card impact the consumers and their decision to use the method for making purchases (Kissi, Oluwatobiloba, & Berko, 2017). Consumers prefer not to use their debit cards in order to limit their spending and eliminate their liability for fraudulent transactions. The lack of consumer protection mechanisms assuring the solution of any potential issue of fraud and transactional errors also inhibited the choice of using debit cards as the consumers preferred credit cards instead. Consumers who are accustomed to the traditional banking services and transactions option prefer to pay with cash and opt for cash on delivery while making an online purchase.

According to Pal, Khethavath, Chen, & Zhang (2017), many consumers refrain from using debit cards and internet banking for avoiding their digital footprints on the server of the banks due to susceptibility to hacking and unauthorised access. The impact of the perceived risks for the consumers includes the lack of trust while using internet banking services. The desire for higher security and privacy by the consumers aware about the drawbacks of using debit cards prefer only to use the plastic cards for withdrawing money from the ATMs. Despite the ability to provide time-saving and convenience, many consumers prefer to use cash due to their lack of knowledge about the internet and security (Akgül, Öztürk, & Varol, 2019). It has been found under multiple circumstances that the consumers prefer not to use the debit cards associated with a bank account that has a significant amount of financial deposit. Consumers always tend to make purchases from a bank account that has the least amount of money for reducing the intensity of loss in case of any instances of fraud.

Issues that impact the implementation of internet banking and debit card purchases by banks

In accordance with Agrawal (2016), internet banking is convenient and easily accessible 24X7 hours a day through computers and mobile apps on phones. Some issues contribute to the negative aspects of internet banking. However, such disadvantages do not keep a consumer from online banking and debit card purchases, and they must consider the concerns in order to avoid any potential consequences. On the other hand, Shareef et al. (2018) claim that technology and service interruption is one of the major issue contributing to online banking. While using internet service and technology in general, the system’s stability and efficiency play a vital role in the success of bank’s implementation of internet banking and debit card purchases. A person or business is likely to face trouble accessing the accounts online if the internet is not stable and completely unavailable for a while. The author also adds that Castle, et al. (2016) consumers cannot acquire access to their own banking information if the bank’s server goes down or become temporarily unavailable because of scheduled site maintenance. Security and identity theft is a concern or issue in this scenario. It is to mention that online banking apps are secure as their designs are effective in providing end-to-end encryption to personal data. Furthermore, banks are continuously improving their security protocols and making sure all of them are in place. On the other hand, there is no such system that is entirely foolproof, and accounts can be hacked at any time. Hackers can exercise identity theft by stealing login credentials. It refers to few actions required to be taken and followed by existing consumers while using online banking, such as being conscious to ignore networks that are not secure and need to be careful in changing passwords and protecting login information. 

Unlike traditional banks, internet banking does not allow individuals to make more than a certain amount of deposit limit. Following Jagtiani & Lemieux (2018), it is an issue for individuals, but it is a major challenge for businesses as they require to make large deposits online. The trouble is that if the person reaches the deposit limit, it would require a visit to the nearest branch to physically deposit the rest of the amount. Additionally, computer scanning software cannot easily read any checks. Specifically, the online deposit system is likely to decline checks that are handwritten and have a black line on the different side for carbon records. On the contrary Arif, et al. (2020) argue that even though internet transaction is convenient, the issue with fast service is still there, making the effective implementation of internet banking difficult. Users can quickly deposit a check using a mobile application; however, they cannot access the balance right away. On the other hand, it also saves a lot of time that a consumer spends travelling to a branch or waiting in a long queue there. As every deposit requires proper review and accessing funds are also done according to existing policies thus can take nearly three business days based on the deposited amount. The users can tackle the online banking needs by themselves, but the problem is that they will not have any personal bankers in the time of a problem. The consumer service department is there, but a user needs to wait long on a phone call to someone who does not have any information regarding the person’s needs or banking history.

According to Rahi, Ghani, & Ngah (2020), the issues impacting the widespread implementation of internet banking and debit card purchase by the banks include the lack of customer education and awareness about digital technologies and limited understanding of its convenience. The banks have started to provide precedence to internet banking and digital payment modes by introducing new technologies for minimising the queues at the counters of the branches along with reducing the dependence on human labour for maintenance of the records. It is easier for the banks to maintain a centralised server with the information and details of the consumers. This allows the banks to offer seamless and instantaneous services along with minimising the dealers in transactions that can be cross verified by the consumers by checking their account balance and payment history or transactions (Pal, Herath, De’, & Rao, 2018). The traditional banking habits of the existing consumers and the senior citizens are the reasons due to which the banks are unable to implement internet banking on a wider scale. In many countries and developing economy means all the individual customers of a banking institution can’t have access to smartphones and computers powered with the internet that they can use for supervising their transactions and bank accounts. This is also challenging for the banks as many customers lack the education levels and technological know-how for operating internet banking and using debit cards for transactions.

According to Steinbock (2005), the security issues are also impacting the rate of deployment of internet banking services by the banks. The physical security of the banking vaults and surveillance systems across the branches does not pose any difficulty to the online hackers and cybercriminals that can steal the money from bank accounts of individual customers by remaining anonymous. This increases the liability of the banks to compensate the customers due to its lapse of security. The difficulties in transactions leading to the increasing rate of failures and obstruction sir challenging for the banks (Ngugi, Sawe, Nguyen, & Bertsch, 2020). Due to safety concerns, the banks do not permit the withdrawal of huge amounts of money to debit cards to reduce the scope of the fraud. This creates additional convenience for the consumers while making a larger purchase as it might require them to use their debit card multiple times have to wait for the next day for their daily limit to end. The technical issues and the lack of integration after branches of the banks along with insignificant budgets in the implementation of internet banking at a wider scale.

Perception of consumers and business organizations about internet banking and debit card purchases

In accordance with Shaikh & Karjaluoto (2016), the biggest misperception regarding the use of online banking and debit card purchases is that it is not as safe as a traditional bank transaction. The issue is ‘perceptions about risk’, which has widely affected internet banking and debit card purchases by banks. The fact is that every bank having physical branches or not uses similar data encryption. Even the electronic protocols and computer systems in both types of branches are the same. Consumers are likely to consider Internet Banking as a form of risk regarding the money transaction. Previous researches by Soni (2019) have identified that cyber threats are the reason why such perceptions have been built among customers. There are high chances of risk due to cyber threats, but banks have done an excellent job blocking such threats. Consumers also think that internet banking is still too new thus can have flaws. But, some online banking operations have been the same for decades, and a significant amount of change and acceptance is there. Due to the advancement of new technological features of mobile technology, banking innovation is now reached frontiers. Day by day, the number of internet banking users is growing in numbers by realizing the benefits of internet banking and purchases through debit cards. Consumers often doubt the convenience level of online banks and consider it less convenient than any neighbourhood bank. Unlike traditional banks, online banks will not offer coffee but offer higher rates and lower fees. It is analyzed by Nazaritehrani & Mashali (2020) that such offers are in place as online banks do not require huge operational costs like traditional banks as they do not have any physical branches, tellers and ATM. The best savings accounts reflect that Internet-only banks are only paying the highest internet rates. Besides such monetary benefits, internet services by banks can be accessed by consumers 24X7. Customers can be view balances and statements and then link activities to the desired finance software program. This contributes to another issue that is widely common among consumers, lack of technical understanding and complexity of banking technology which are still inclined to traditional banks.  

As per Jehan & Ansari (2018), IT fatigue is one of the issues consumers consider to be a barrier in their internet banking and debit card purchases. The issue has made any customers uncomfortable even though Internet Banking can be embraced for low fees and amazing interest. Consumers possess a fallacy that internet banking requires high technical knowledge to be accessed and used properly by customers. However, such an issue is merely turned into an excuse to avoid the ease of banking and shopping in general. The author strengthens the point by stating that banks worldwide have been making changes to debit card purchasing and online banking. Such actions are constantly improving the profitability of banks and consumers. Banks can save money. Fewer consumers visit physical branches for any transactions, and consumers receive benefits by not going to the branch or ATM. Technicality seems to be an ongoing issue towards the effectiveness of internet banking and debit card. At the same time, Soni (2019) argues that internet banking does not operate in a way where consumers can scan cash and the bank deposits the amount in the account. It is an issue that is perceived correctly but consumers and businesses. Businesses require to deposit a lot of money daily, but it cannot be possible with online transactions as it will exceed the deposit limit. Also, the amount cannot be accessible for two-three business days. It is the major drawback of internet banking. A few online banks allow customers to deposit money through online banks, but it also has issues such as jamming bills in ATM counter, deporting the amount in bricks and mortar banks, followed by an ACH transfer. These issues are troublesome to consumers and restrict mostly heavy cash businesses from using online banking services.

The U.S Federal Trade Commission (FTC) has said that credit cards are more effective for safer online purchases than debit cards. The base of such a claim is that cyber-criminals will drain the bank accounts after interrupting with the debit card number. However, banks follow and take every measurement and protocol to ensure such issues do not happen. Yet, the possibilities of losing money are higher while using the debit card as per the perception of the account holders. According to Mothibi & Amali (2018), the perception of individuals does not focus on phishing emails or unauthorized emails which claim to be received from authentic sources. The issue of cyber-hacking of the bank details can be accomplished if customers access such mails. These mails lead a user to install malware that can read client information, including passwords and pins. On the other hand, Pathak (2016) says a virus called “Trojan” can be installed while browsing secured websites. The malware can assess the online activities and sensitive data. Therefore, lack of knowledge regarding online threats has created a misconception among potential online banking users. The technological advancements simplify the banking transaction through online facilities, yet people still consider online banking as a complex process and can cause a financial issue. The chances of losing money are higher than traditional banking. These are issues that have impacted banks’ operations in implementing internet banking and debit card purchases.

Effect of demography on internet banking and debit card purchases and determine solutions on factors affecting internet banking and debit card purchases

As per Akgül, Öztürk, & Varol (2019), the technological advancements in the last two decades in the domain of telecommunications and computer technology have significantly altered the medium of delivery of products and services. The level of awareness of the consumers impacts acceptance of using internet banking and debit cards for making purchases and mediating online transactions. The other factors like the user-friendliness of the internet banking set up of the service providers along with low charges of the debit cards also influence the use of such medium for payments (Alsayed & Bilgrami, 2017). The level of response of the banks and security levels offered for Internet banking and debit card for purchases are also the contributory factors of acceptance and use among the consumers across various demographics. The gender and education levels of the consumers along with their age and income levels are also significant factors that influence the use of internet banking services for transactions and payments.  

The ability of the banks to deliver proper assistance for using the website affects their rate of using the electronic medium for completing transactions. Across the various age groups of consumers, teenagers and young adults have been found to be mostly using the electronic modes of payment due to the convenience and their ease of using the technical platforms (Arif, Aslam, & Hwang, 2020). The trust perceptions of the younger users are higher in comparison to the elderly population. The security issues and problem-solving attitudes of the bank employees influence the speed of adoption of internet banking by the users. As per Castle, Pervaiz, Weld, Roesner, & Anderson (2016), the real-time accessibility of the internet banking features along with the instantaneous and seamless payments from any convenient location attracts the young adults and some part of the working-class population to use debit cards and internet banking for making online and offline purchases. Middle-age customers have the perception of the safety of debit cards over credit cards as they cannot fall into a debt trap as long as they use their own money. This has increased the acceptance of debit card use across all the demographics to some extent as the consumers feel less bothered while using their own money. The busy lifestyles of people engaged across the high-profile jobs and having higher income compress them to use internet banking facilities for banking purposes including purchase. The accuracy of internet banking to reflect the credit or debit status instantaneously increases its convenience of use along with dependability by the businesses.

The banks are required to understand the security concerns of the consumers along with their privacy issues for increasing the number of transactions completed with debit cards and internet banking. The ease of navigation of the banking website along with the delivery of continuous assistance is required for making the consumers accustomed to the internet banking facilities and enabling them to understand its convenience (Mothibi & Amali, 2018). The gender, age and income levels along with the educational background of the consumers influence their rate of adoption of different banking technologies. The determinants of acceptance of internet banking and use of debit cards for purchases include performance expectancy. The perception of the consumers regarding the usability of the digital services to be more effective and convenient compared to the branch banking method for using cash influences their decision making and acceptance. The effort expectancy includes the magnitude of ease and convenience enjoyed by the consumers while making payments using internet banking. The usability of the internet banking websites also determines if the aged demographic is able to use the technologies and their benefits. The degree of social influence influences the use and acceptance of the digital services as the friends and family members of a consumer using similar services can impact their decision to use the same for making purchases (Van Winkle, Bueddefeld, Halpenny, & MacKay, 2019). The recommendation of using internet banking services by friends and family members in a social group acts as a desirable channel for adopting and performing internet-based banking transactions.

According to Sultana & Hasan (2016), it has been found that the consumers of young age with high paying jobs are most likely to use internet banking services in their busy lifestyle and it is easier for the young adults to get influenced by their friends and family members using digital services. The attitude of the consumers pertaining to the use of internet banking services along with the perceived benefits influences the rate of acceptance of plastic cards as a means of transactions. The demographic and income attributes significantly impact the payment behaviour of consumers. Consumers with lower income and education levels are less likely to use internet banking and digital payment systems than their counterparts (Alsayed & Bilgrami, 2017). It is also found that main tend to carry and use cash at the point of sales and even off for payment on delivery in comparison to women who use less cash but more debit cards and cheques for payments. The characteristics of payment instruments concerning internet banking and debit cards include cost and convenience along with the security that is offered which influences the payment behaviour. The socio-economic attributes of the consumers also have a significant impact on their levels of variation in payment behaviour. The younger consumers have been recorded to use debit cards and internet banking compared to the elderly population as they prefer convenience and speed.

According to Rahi & Ghani (2018), the UTAUT 2 represents the rate of acceptance of new technology among the consumers. The recent advances in ICT and the emergence of smartphones as a communication, necessity and entertainment device have altered consumer behaviours. The firm-level issues across the bank are being gradually improved for solving the issue of technical failures and security issues. The individual-level issues of technology adoption by the consumers have transformed to a massive extent due to the increase in digitalisation and the increasing use of smartphones, tablets and phablets (Alalwan, Dwivedi, Rana, & Algharabat, 2018). The banking employees have diverted their attention on bringing customer satisfaction and convenience by sharing the benefits of internet banking and offering personalised support. The perceived use and benefits of debit cards are presently being realised by the consumers as they are able to understand that they do not need to use cash and there are fewer chances of falling short of cash at shopping counters. It has been evaluated that young adults and middle-aged customers have a high tendency of using internet banking and debit cards for making purchases. The female customers have also displayed a higher tendency of using debit cards for mediating online transactions for simplicity in comparison to carrying and handling cash. The educational levels and societal position of the consumers along with the influence of the friends and family members are also the contributory factors for influencing the use of the digital payment methods (Akgül, Öztürk, & Varol, 2019). Access to technology and being aware of the latest technological developments is higher for the young adults and working-class population justifying their use of internet banking and debit cards. The senior citizens have displayed a lesser tendency to use the E-Commerce facilities and hence also so use the debit cards to a lesser extent. In the age group above 60 and lower educational levels among all the demographics, the use of debit cards remains mostly confined towards the withdrawal of cash from the ATMs. The perceived risk theory in consumer behaviour is relatable to the confinement of users of debit cards for withdrawal of cash across the demographics. The perception of risk amounting to potential fraud and theft of money from the bank account hits the use of debit cards for online transactions for the consumers. This leads to the slower rate of adoption of using virtual cards for making transactions.

Various perspectives of both consumers and business organizations on online banking and debit card purchases

Internet Banking is gradually becoming a population due to offering convenience and flexibility. Banks promote online banking services for improving their operations with reduced cost of operations. The perspective of consumers and business organisations online banking and debit card purchases can be discussed with the theory of reasoned action (TRA) (Venkatesh, Thong, & Xu, 2016). Researchers have proposed this theory to explain consumers’ behaviour regarding internet-based services such as online banking and debit card purchases. As per the theory, the intention is the originator of the behaviour. The majority of the behaviours have evolved from social relevance under violent control. Two factors determine behavioural intentions, such as attitude towards behaviour and personal perception of social factors. Previous researches have analysed the impact of internet services on the effective delivery of banking services. There are various dimensions of service quality of Internet Banking such as accuracy, quality, convenience, complaint management, feedback, accessibility, efficiency, customisation and queue management. They influence the acceptability of internet banking services. On the other hand, Marakarkandy, et al. (2017) pointed out that internet banking is implemented in various countries. It is successful in some nations because of factors such as risk factors and technical development. Internet banking facilitates customers in professional and daily life through funds transfer, paying bills and internet shopping. 

Mansour (2016) has conducted a study regarding customer’s perception towards internet banking and found several factors affecting internet banking. Important factors that influence customer perception towards internet banking are customers’ experience in internet banking, perceived risk in internet banking, perceived uncertainty in internet banking and perceived easiness in internet banking. Following the perceived risk theory, users are often discouraged from using internet banking. It is a complex technological system to them, and they do not get any physical support while making a transaction (Chang, Fu, & Jain, 2016). These two reasons restrict the bank account holders from the desired stage to the action stage. The service dimensions of internet banking ensure the customer’s perceptions towards it. On the contrary, the study by Raviadaran et al. (2019) concludes that majority of the online users do not use internet banking due to its inaccurate security mechanisms and preference to use face to face banking services, lack of knowledge of online banking, banking website’s issue to become user friendly. A less amount of people do not use online banking because the bank does not offer it. In the study, many of the participants also showed a lack of interest to consider internet banking services in the future. The age group 25-35 years old is the major customer of the internet banking services, and most of them are males.

There are several critical incidents that customer positive and negative perceptions of internet banking. According to Chen et al. (2017), business to business companies is likely to use technology-based services. The business that sells products to customers is less likely to use internet banking as the businesses are cash-oriented. On the contrary, Larivière et al. (2017) identify that technical services are increasing rapidly in business to business transactions. Oertzen & Odekerken-Schröder (2019) have researched to explore consumers’ perceptions towards online banking and drivers of internet banking. The Unified theory of acceptance and use of technology (UTAUT) refers to a technology acceptance model that explains the intentions of the user for using the information system and following practice behaviour (Sarfaraz, 2017).  Education, gender and income of customers determine the use of internet banking. However, the customers will perceive internet banking solutions as effective if the particular banking quality is improved. Following the theory, some customers are likely to use internet banking and make debit card purchases due to cost efficiency, convenience and time-saving. Internet banking can be accessed by all, anywhere and anytime and cost less. Besides, it is self-accessible, so anyone can make transactions from their homes and offices rather than going to banks by themselves. People who are working and have no time to visit branches physically and to stores prefer online Better efficiency and ease of delivering online banking services also leads to forming a loyal customer base.

Customers avail of internet banking services as these are available 24 hours a day and 7 days a week. In the studies of Marafon et al. (2018), the growth of internet banking is the outcome of behaviours, attitudes and perceptions of customers. Banks have shown major interest in considering offering internet banking services as it reduces the costs that are derived from paperwork, quick response and efficient service delivery. However, some customers prefer telephone banking and ATM, making it difficult for marketers and bankers to understand the critical factors associated with the influence of internet banking by customers. Malaquias & Hwang (2016) claim that trust plays a vital role in shaping customers’ perceptions regarding online banking services. It is usually low as concerned two parties do not maintain face-to-face communication during any internet transaction. Trust between these two parties ensures a successful transaction and also a long-term relationship. Avoidance of internet banking is because of the uncertainty in consumer’s minds as per the security of online banking services that reduces the trust. It can be characterised as high risk, security and uncertainty in online transactions. Trust not only guarantees the internet banking service provider is dependable but also points out that the transactions that are proceeded and carried out are also trustworthy and have been accomplished using the web. Customer’s trust should be built by banks covering their trust towards web and internet banking service providers. It is required that those service providers should there design an online system in terms of customer requirements and concerns about risk factors and uncertainty.

Following Al-Sharafi, et al. (2016), reliability and security are the two factors that effectively determine if a customer can trust internet banking. Security is the most crucial factor as it can change the feeling of unwillingness to adopt internet banking services. Due to the flaws in the security mechanisms, customers are less likely to adapt to online banking. Reduced risk, as well as high security, make customers consider internet banking as an accessible and secure delivery channel. Consumers have the perspective of achieving higher convenience and seamless payments while making online purchases while using internet banking facilities. The consumers use the facility for ensuring that they make use of their productive times by using debit cards for making transactions and withdrawing money from the ATM rather than queuing at the banks. The business organisations have also adopted internet banking and debit card facilities for accepting payments from the customers for eliminating the delays at the counters and avoiding the hassle of accepting cash payments from the E-Commerce deliveries. The use of digital modes of transactions increases the transparency for the businesses amounting to a reduction in losses due to mishandling of cash and employee fraud (Mothibi & Amali, 2018). Despite the initial investment required for the businesses along with the training needed for the employees to use the software and debit card transaction machines, the businesses have profited from the use of the technology. By accepting debit cards and internet banking methods for online purchases the businesses have been able to register higher volumes of sales and revenue from single customers. The lack of foundation of having adequate quantities of physical currencies has also contributed towards an increase in consumerism leading to more purchases by the customers. The use of transaction and payment technologies is beneficial for both the consumers and the businesses leading to better time utilisation for both entities.

Research Gap

The research gap represents a segment of the investigation that is not answered by the existing studies. This research topic is based on the evaluation of the perception of the businesses and online consumers regarding the use of debit cards and internet banking for making the purchase. the resources also examine the factors that contribute towards the implementation of digital banking means. There have been multiple studies in the past concerning the acceptance of internet banking and debit cards by consumers referring to the security loopholes and lack of awareness. Considerable efforts have also been put in the domain of understanding the democracy of the consumers who are accepting internet banking and debit cards for transactions and other banking purposes. The individual perspective of the businesses has also been evaluated concerning the acceptance of internet banking and debit cards for payments along with offering convenience to the customers. However, there is a deficiency in research concerning the joint perspectives of businesses and online consumers regarding the use of internet banking and debit cards influencing their implementation by the banks. This research has made efforts to understand how the dilemmas of the consumers and the businesses can be overcome by the banks and financial institutions to normalise the use of internet banking and debit cards.  

Summary

The literature review analysed the risk factors that are intertwined with debit card purchases and internet banking along with evaluating its effect on the perceived risk of the consumers and businesses. The banks have taken the assistance of information technology for remaining competitive as Internet banking services have enabled them to save costs and deliver better customer service quality. The customer adoption rate for internet banking is less in developing countries. The risks of internet banking and using debit cards include unauthorised access by hackers, human errors, negligence from the customers and the employees. The technological errors and transaction processing complications are also the reasons for delayed implementation by the banks. The instances of employee fraud also create operational threats for Internet banking and debit cards. The cost of processing the transactions discourages businesses to accept digital payments despite having the infrastructure. Many consumers refrain from using debit cards and internet banking for avoiding their digital footprints on the internet due to the susceptibility to hacking and unauthorised access. Consumers and businesses alike are likely to face trouble accessing the accounts online if the internet is not stable and completely unavailable for a while. The banks have started to provide precedence to internet banking and digital payment modes by introducing new technologies for minimising the queues at the counters of the branches along with reducing the dependence on human labour for maintenance of the records. Consumers also think that internet banking is still too new thus can have flaws. Businesses require to deposit a lot of money daily, but it cannot be possible with online transactions as it will exceed the deposit limit. It has been found that the consumers of young age with high paying jobs are most likely to use internet banking services in their busy lifestyle and it is easier for the young adults to get influenced by their friends and family members using digital services. Education, gender and income of customers determine the use of internet banking.

Chapter 3: Methodology

Introduction

The methodology chapter in a research project consists of a detailed and in-depth analysis of the methods, techniques, and strategic approaches followed to conduct the study. The selection of these methods significantly depends on the research objectives, purpose, and scope of the study. Moreover, the success of the study also depends on the selection of the most suitable methods and their appropriate implementation. The following chapter is going to discuss the methods selected by the researcher to identify the major factors that impact the implementation of internet banking and debit card purchases. Explanation of every individual selected method will be supported by proper justification.

The fundamental knowledge and idea about the research methods have been developed based on the availability of resources, and scope of their utilisation to ensure the best possible results. Primarily, the chapter will exemplify the main purpose of the research study, which will be supposed to provide direction regarding the selection of methodological framework. Furthermore, research philosophy, approach, design, and strategy will be explicated followed by data collection and analysis methods. The ethical aspects related to the data collection process and reliability and validity of the dataset will also be contextualised in this chapter.

Research Purpose

The present research study sheds light on the innovations and changes in information and communications technology, which is enabling several e-channels for executing banking services. The selection of the research methods has been influenced by the key purpose and objectives of the research. Throughout the study, the researcher has tried to align the discussion with the research objectives so that the objectives can be fulfilled successfully. Along with meeting the research goals, the researcher has also focused on maintaining clarity and transparency while using data. Selection of the research methods is also concerned while collecting data for securing reliability and safety factors that are associated with online banking transactions.

Besides, the methodical framework selected by the researcher aims to continue the study based on the problem statement. The purpose of this study is to resolve the key problem of the study and interpret the main subject of interest of the study. Moreover, through a detailed description of the research methods, the present study also aims to determine the success of the data collection and analysis procedure. Thus, a detailed and insightful analysis of the selected methods along with proper justification can support the successful completion of the study by detailing the risk perception of the consumers and businesses towards internet banking.

Research Philosophy

The key concept of research philosophy is centralised on the complex and abstract conceptualisation and presentation. According to the viewpoint of Crossan (2003), philosophy is sometimes termed logical reasoning although the modern concepts of research have changed this idea. The nature and context of the social sciences and social studies also play an important role in key determinants while selecting and applying research philosophy. With the selection of philosophy, a researcher can develop the idea regarding the overall methodical process and the suitable systematic approach to carry out the study. Positivism, interpretivism, realism, and pragmatism are some of the most common research philosophies that are used in academic research studies.

Positivism philosophy mainly relies on collecting factual knowledge and it involves using scientific methods for data interpretation, which ensures reliability and validity at a higher level. On the other hand interpretivism, philosophy is more likely to focus on in-depth analysis of any data related to research phenomenon through critical interpretation. Therefore, an interpretivism philosophy is more suitable for analysing non-numeric or qualitative and subjective data set while positivism helps in interpreting statistical data. Realism philosophy mainly includes natural phenomenon to answer the research questions while pragmatism philosophy mainly focuses on practical instances and their consequences.

In this present research study, interpretivism philosophy has been selected and it has helped the researcher to avail sound knowledge of the main topic variables as well as various relevant aspects related to the main subject of interest. Interpretivism has been the most suitable choice for the qualitative dataset in this study and the selected philosophical approach has also helped to critically interpret certain significant elements related to the research topic (Ryan, 2018). So, an advantage of using this philosophy is that it has helped to enhance the knowledge and understanding by a more detailed analysis through expanding the area of discussion and data analysis.

Research Approach

The overall plans and procedures of doing a research study are determined at the time of selecting the research approach. Bloomberg & Volpe (2008) have firmly stated that research approaches and all their related methods and techniques range from certain broader assumptions to a detailed discussion of selected methods for collecting, analysing, and interpreting data. Sometimes, the research approach determines the thorough system of selected methods as well as the rules that can facilitate the data collection and analysis process. Deductive and inductive are the two most common research approaches that ensure successful completion of data collection and analysis procedures thereby answering the research questions properly. 

The deductive theory is closely associated with scientific investigation and it carries on the discussion by testing hypotheses. Therefore, the application of the deductive approach is quite pertinent for analysing qualitative data. On the other hand, the inductive approach is more suitable in qualitative research and it involves the process of moving towards broader generalisations from specific observations. This method follows a systematic process for data analysis guided by particular objectives of the evaluation. The biggest difference between the inductive and deductive approaches is that the former one focuses on developing new theories while the other approach allows understanding by testing existing theories (Overmars & Verburg, 2007).

Hypotheses are not developed in this study, so an inductive approach has been selected to interpret the qualitative data set to derive a meaningful conclusion. The use of the inductive approach has allowed the researcher to rely on relevant examples to generate new concepts for an in-depth understanding of a particular topic. Moreover, while a deductive approach exponentially focuses on testing and explicating the hypotheses, the inductive approach has helped the researcher in making broader assumptions, which has explored the scope of gaining idea and knowledge. Therefore, it can be stated that the selection of inductive approach has been certainly perfect for this study.

Research design

Myers, Well, & Lorch (2010) have defined research design as a methodical framework that includes the tools and techniques selected to conduct a research project. Research design provides a logical and succinct plan of doing the research that can fulfil the research aim. Although it is not associated with any specific data collection or analysis technique rather it determines the implementation process of the other research methods. So, the identification of the most suitable research design assists in continuing the research by applying the other selected methods in the appropriate ways. Usually, the research is classified into three categories such as descriptive, explanatory, and exploratory. 

Descriptive research design ensures the application of a systematic procedure to describe the situation, population and research phenomenon by investigating the research variables. On the other hand, an explanatory design emphasises connecting various ideas to get a deeper insight into the cause and effects of certain occurrences, while an exploratory design helps to research based on a topic that has not been explained before in detail (Stebbins, 2001). So, the scope of exploring new areas of knowledge and understanding is mostly provided by exploratory design, and it is also suitable for a subjective qualitative dataset while descriptive and explanatory designs are commonly used for analysing quantitative data.

In order to explain the way online consumers and business organisations perceive debit card purchases and internet banking, the researcher has selected an exploratory research design. The selection of this method has been significantly triggered by the identification of a gap in existing literature regarding specific areas related to the research topic. Exploratory research design provides immense flexibility to the researcher and changes can be made in the application of methods as required. In addition to that, exploratory design has also helped to address the research problem along with exploding the area of discussion and obtaining sound knowledge about the topic variables.

Research strategy

Research strategy encompasses a plan of a systematic process for conducting the research study including various consecutive stages such as planning, execution, monitoring, data collection, and interpretation of the data. In order to answer the research questions and fulfil the research objectives, a researcher needs to rely on critical analysis and interpretation of the collected data (Pepper & Wildy, 2009). Moreover, the nature, quality and quantity of the data are also the key determinants of the success of the entire study. Apart from myriad statistical methods, questionnaires, interviews and others are some of the effective research strategies used for primary data collection. On the other hand, data extraction from books, journal articles, websites, and other online sources by using keywords is the strategy of secondary data collection.

In this present study, the researcher has decided to collect a qualitative, non-numeric data set and the qualitative analysis method is also applied to complete the study. This is action-oriented research, where the researcher has progressed with a secondary qualitative method along with a semi-structured interview instead of following a quantitative survey method.  

Data collection methods

This research has made use of both primary and secondary data sources (Maxwell, 2012). The data collection procedures of this investigation include the reference of qualitative information. The secondary data sources comprising of the academic books journal articles and reports had been used for the development of the in-depth literature review. The primary data in this study was collected from the customers of four different banks in the UK with the instrument of an open-ended interview with semi-structured questions. 20 customers of banks including HSBC Holdings, Barclays Bank, Royal Bank of Scotland, and Lloyds banking group have been interviewed virtually with video conferencing. The interview questions have been asked to the customers regardless of prior information about their use of internet banking and debit card facilities. This had ensured that the interview is able to generate good quality answers regarding the risk perceptions of consumers regarding the use of digital transaction methods. The inclusion criteria of the interview participants intruded on mandatory banking experience for the last five years. The exclusion criteria of the interview included the known adult banking customers of age less than 18 years. The secondary data considered in this investigation included the previous studies of authors and other significant research work that has been conducted by eminent scholars (Olsen, 2011).

Data analysis

Data analysis is the process of evaluating the available information by using logical and analytical reasoning (Blair & Blair, 2014). This research has been conducted by collecting both primary and secondary information followed by an analysis of the same. Multiple techniques have been applied for the evaluation of the collected data for deriving the findings and inferences. The qualitative data collected through the interview of the banking customers were analysed using the thematic analysis method. The common themes were identified and evaluated using secondary information sources based on the common occurrences in the responses of the interview participants. This had resulted in the extension of the existing literature review through the incorporation of new information from new sources based on the codes and themes that had been generated from the results of the interview. The themes had been shortlisted based on the topic sentences from the interview responses.

The findings from the thematic analysis had also been subjected to comparison and evaluation against the literature review that was previously formed by using the secondary information sources. Combining the inferences from the thematic analysis with the qualitative data of the literature review resulted in the formulation of the conclusions based on which the recommendations were also provided.

Reliability and Validity

The reliability and validity of an investigation represent the quality of the research along with the precision of measurement by the chosen techniques. The research findings are reliable and valid as it ensures the consistency of measure through the open-ended and semi-structured interview (Salkind, 2012). The thematic analysis method was chosen for the evaluation of the findings from the interview also represents the accuracy of the measure is it uses new secondary information sources for extending the literature review. The reliability of the investigation had been insured by validating the sources that have been used in the literature review. A test is valid when it is capable of doing what is supposed to measure proficiently. In this case the research questions and interview questions by design by integrating the research topic and with the motive of generating answers for the research problem (Baumgarten, 2013). Research is valid as the participants provided their individual opinions regarding their perception of internet banking and debit cards.

Research Ethics

As this research included primary participants, the ethical guidelines of the university were followed. This was done to ensure that the participants were made fully aware of the participation in the interview in advance (Wiles, 2012). It was also ensured that the participants had provided their consent before appearing for the interview and they have not been asked any personal questions. They were also provided with the freedom to leave the procedure at any point in time.

Accessibility issues

There were some accessibility issues faced while conducting this investigation due to the widespread restrictions implemented to curb the spread of the coronavirus. The researcher had to use his personal contacts and references for scheduling the appointments for the interviews with the banking customers (Karlsson, Andersson, & Norman, 2015). This was due to the unavailability of banking representatives and their contacts due to maximum accounts of work from home and limited attendance services. Some of the accessibility issues in this research included the lack of access to banking data including the percentage of customers having debit cards and the actual number of people using the same for their daily transactions.

Summary

The research has been conducted with the purpose of analysing the perception of businesses and online consumers towards purchases through internet banking and debit cards along with the factors that influence the implementation of the technologies. The research has been conducted by following the interpretivism philosophy as it corresponds with the notion of in-depth analysis that has been adopted in the research. The research has been preceded by selecting the inductive approach due to the absence of any formulation of hypothesis for testing in the research. The exploratory research design has been selected for explaining the perceptions of businesses and online consumers towards debit cards and internet banking purchases due to the gap in the existing literature. The research strategy selected for this investigation is qualitative for integrating non-numerical data. The data in this research has been collected from both primary and secondary sources for the selection and analysis of qualitative data. The primary data collection included a semi-structured interview conducted with multiple customers of banks through video conferencing containing open-ended questions. The responses of the interview participants had been analysed by using the thematic analysis technique.

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