Factors Affecting Security of Electronic Payment Systems

Abstract

The high rate of development of electronic payment systems (EPS) has raised the issues of security and safety of users. This paper discusses the issues that influence the security of electronic payment system as viewed by users. A structured questionnaire based on the use of Google Forms was used to gather primary data consisting of 386 respondents. The questionnaire was able to capture five major factors which included technological factor, regulatory factor, human factor, security and trust factor, and user intention factor. The answers were noted using five-point Likert scale. To define the underlying factor structure, exploratory factor analysis was used. The constructs’ reliability and validity were evaluated by the address of standard measures. Confirmatory factor analysis was then undertaken on the results as a measure of model validation and model fit. The findings validated the fact that all the five factors have significant impacts on the perceived security of the electronic payment systems. Regulatory guidelines, technological controls and user awareness were identified to have a significant contribution in mitigating security risks. The issue of security and trust became a crucial connection between system characteristics and intent of the user. The results can be valuable to banks, payment service providers and regulators. Payment system security can be strengthened by enhancing the use of technology, better enforcement of regulations and increasing awareness of the users. The research also provides a model of validated measurements that can be implemented in future research related to the field of digital payment security.