Exploring the Effects of Value Added Services on Perceived Value of Mobile Payment in the UK

Abstract

Mobile payment (m-payment) apps have been introduced as an innovative alternative payment method that extends in-store payment options available to consumers. Despite being marketed as convenient and secure, recent research reports that m-payment uptake has gone far below earlier forecasts. This is due to consumers perceiving little added value relative to existing payment options, such as contactless cards. Augmenting m-payment with value added services (VAS) has been suggested as a way to add value to m-payment and boost demand. However, empirical investigation about the role and effect of VAS on consumers’ perceptions of m-payment value remains scant. This study attempts to fill this gap by employing a deductive qualitative approach through the lens of perceived value theory, extended with perceived trust and risk. A total of 23 interviews were conducted with UK adopters and nonadopters of m-payment. The findings suggest that the perceived added value of the augmented m-payment service was mainly derived from utilitarian values associated with the additional functionalities offered by VAS. Additionally, the augmentation of m-payment has enhanced perceptions of trust in the service provider as a result of integrating additional features that tackle issues associated with the payment experience. This study advances knowledge of the concept of added value in the m-payment context and provides practical suggestions to m-payment providers for increasing the consumer perceived value.