DIGITAL PAYMENT: HOW CASHLESS TRANSACTIONS ARE SHAPING MODERN

CONSUMER BEHAVIOR IN NAVAL, BILIRAN

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A Qualitative Research

Presented to the

Laboratory High School

Biliran Province State University

Naval, Biliran

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Requirement for Practical Research

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Christian Jibb N. Perocho

Vince Lyzel C. Sabornido

Jeth Kirby E. Milflores

Brian Zyrex E. Garin

Avrelle D. Patagnan

Danilo Y. Cañezo Jr.

Roy II G. Silvano

Janna Pitao

February 2025
 CHAPTER I

INTRODUCTION

Nature and Importance of the Study

In present times, cashless transactions have overturned the way consumers interact with

their businesses, influencing contemporary buying habits. With the increase in the world’s

population, the emergence of mobile wallets, digital transactions, and online payments

offer unmatched convenience, speed, and security also increases. Consumer behavioral

patterns change (e.g. spending habits) leading them to use cashless payments even

more. However, cashless transactions cannot function without a network and the

Internet. Concerns over cyber-security, data privacies, and financial inclusions are still a

top priority for money safety in our e-wallet. This study explores how digital payments

regulate consumer behavior, the economic impact of a cashless society, and the future of

financial transactions in an increasingly digital world.

Digital payment studies have been are done mostly in gilts while rural areas such as

Naval, Biliran are still lacking in research (Arevalo et al., 2024). Understanding spending

psychology, trust in digital payments, and the challenges of unbanked people is still

perplexing (FDIC, 2024). There is a lot of research done on cyber-security, but there is

very limited research on consumer confidence and financial management within a

cashless economy (Widayani et al., 2022). Barriers to digital adoption are common with

smaller scale entrepreneurs but their plight is quite understudied. Filling these gaps will

aid in understanding the repercussions of digital payments across various types of

consumers.

Furthermore, while much has been said about the action by governments to advance

cashless economies, there is limited work done on internet security, privacy, and

consumer protection on these changes. Filling these gaps will create a more holistic how

the case of digital payments influences consumer behavior, across different

methods of enabling systems, apparatuses, and secure payment transactions as an

electronic payment system, and ways to share secure documents through a mobile

device, for example a mobile telephone, smartphone, cellular telephone, other wireless

device, Near Field Communications (NFC) devices, or the like.

Liébana-Cabanillas, F., ET. Al (2018), in their study mentioned that there are 3

dimensions in cashless payment, psychological dimension (social image and subjective

norm), perceived benefit and perceived risk.

Studying how people use cashless payments is important because digital transactions

are becoming a big part of everyday life. Understanding consumer behavior helps

businesses make digital payments easier, safer, and more accessible, while also

encouraging more people to use them.

Some people still hesitate to go fully cashless because of security concerns or a lack of

trust in the technology. Researching these concerns can help companies and

policymakers find better ways to address them, whether through stronger security, better

education, or more user-friendly payment options. Digital payments also change how

people manage their money, so it’s important to develop tools that help them budget and

spend wisely. Parhonyi et al. (2005) mentioned 2 dimensions, technical (ease of use

and convenience, scalability, anonymity, reliability, interoperability security) and non-

technical dimension (privacy concern and security coverage). Venkatesh et al. (2003)

proposed a fundamental model for factors in user technology acceptance where he

expressed Individual’s reaction to use information technology which is influenced by

actual use of Information technology and individual reaction to use information

technology will further lead to Intention to use information technologies.

Looking at how people use digital payments also helps predict future trends, like the rise

of mobile wallets and crypto-currency. Businesses and policymakers can use this insight

to stay ahead of changes and create solutions that work for everyone. Studying
consumer behavior also highlights barriers that might prevent certain groups from

accessing cashless payment options, helping governments create fair policies that

protect users and support innovation.

In the end, understanding how people interact with digital payments makes the shift to a

cashless economy smoother. It allows businesses to improve their services, helps

policymakers set fair regulations, and empowers consumers to make smart financial

choices. As digital payments continue to grow, keeping an eye on consumer behavior will

be key to building a financial system that is secure, efficient, and accessible to everyone.

Objectives

This study examines the behavior of individuals using cashless transactions in Naval,

Biliran, focusing on consumer decisions, financial habits, and trust in technology. It

explores psychological, social, and economic factors influencing digital payment adoption

and aims to provide recommendations for businesses, financial institutions, and

policymakers to improve accessibility, security, and user experience.

Specifically, it aims to:

1. To explore the spectrum of human behavior in relation to digital payments, including

trust, spending habits, and financial decision-making.

2. To analyze how psychological and social factors influence consumer adoption or

hesitation toward cashless transactions.

3. To examine the impact of financial literacy on consumers’ adaptability to digital

payment systems.

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Theoretical Framework

The analysis of consumer behavior as regards digital payment systems and cashless

transactions relies on concepts from economics, psychology, and technology adoption.

To be more specific, in examining how digital payments change consumer behavior,

factors like trust, technology acceptance, and social supports among others are very

vital. A prominent model is the Technology Acceptance Model or TAM that was

postulated by Davis in 1989. This model explains some of the reasons people choose to

use advanced technologies, in this case with regards to digital payments. The core

premise is that there are two key determinants to technology use: perceived ease of use

and perceived usefulness. For digital payments, this means looking at how simple people

find things like mobile wallets or online banking, and whether they think these systems

will save them time, make their finances easier to manage, or provide more security. In

the case of consumers in Naval, Biliran, TAM will help us understand how they weigh

these factors before deciding to use cashless payment methods. For digital payment

acceptance why are they saying it's convenient and secure in an alternative view? What

holds them in hesitation? The easiness for appraisal or fear of financial risk. UTAUT, in

short, presents a great view of analysis of technology adoption and with this background.

On the other hand, while TAM is centered on an individual user belief-foundation of ease

of use and usefulness, UTAUT broadens this view further layers that encompass social

influence and facilitating conditions. The paradigm of social influence tries to point my

understanding toward how much the decisions of others, be it friends, family, etc.,

influence those of the individual concerned. It, in particular, weighs on younger

generations, particularly Gen-Zs, as such consumers make decisions based on social

media influences and peer trends. Facilitating conditions lean toward external factors

such as access to the internet, availability of mobile networks, and the security
infrastructure surrounding digital payments. Areas like Naval, Biliran, may be benefited

by these factors in the adoption of digital payments, depending on their accessibility. In

turn, UTAUT allows us to explain why some people might be reluctant to embrace

cashless modes of payment when there is difficulty knowing if one will have reliable

access to the internet or when they have doubts about whether online transactions are

secure. These helps us create a composite picture of acceptance of digital payment

through the integration of the position of TAM and that of UTAUT. These theories

highlight how personal perceptions, social influences, and external factors all come

together to shape consumer behavior, particularly among younger people like Generation

Z. By diving into these theories, this study aims to uncover what drives or holds back the

adoption of cashless transactions in rural communities and provide a clearer picture of

consumer behavior as we move toward a more digital economy barriers and enablers of

adoption in rural areas like Naval, Biliran.

METHODOLOGY

The main goal of phenomenological research is the exploration of how specific

individuals experience something. This research attempts to assess digital payments

with regard to consumers and everyday life. By focusing on people's experiences,

feelings, and thoughts not just on numbers and percentages this exploratory study sheds

light on the behavioral and psychological nature of the digital payment experience. This

strategy is backed by recent studies. A study conducted in 2023 argues that mobile

wallets and online banking promote convenience at the cost of unrestrained expenditure

(Propulsion Tech Journal). Also, a 2022 study from Uttarakhand, India shows the

behavioral effects of digital payments on consumer buying behavior. To determine what

drives the use of digital payments, what causes consumer concern and how this

transition in finance affects consumer decision.

Research Design and Sampling

This study will engage in phenomenological research by identifying and understanding

how individuals practice cashless transactions in Naval, Biliran. It sheds light on how the

experiences affect consumer behavior, financial decisions, and perspectives of digital

payments.

Creswell (2013) opined that phenomenology was an effective tool for scholars

researching people's experiences in paying for items: Are customers comfortable in using

it? Are they worried about security? Have they changed in their spending patterns?

Moustakas (1994): `This method allows respondents to speak freely about their lived

experiences, thus providing richer information regarding their concerns and motivations.
Seamon (2023): "Phenomenological methods are important as one approaches people's

ideas pertaining to their payment system." It lets them express their experiences that can

expose some of their concerns and motivations in more detail.

Preliminary sampling will be done on purpose, focusing on people that use mobile

wallets, do online banking, or book services online. Elder LaTour (2019) propounds that

younger professionals and other middle aged consumers need to be included in the

sample as a proportionate depiction of digital payment usage is important. Participants

will be sampled using in-depth interviews and will be prompted to share their thoughts

and experiences. Understanding these narratives will render key themes useful to

businesses, financial institutions, and even policymakers for the enhancement of quality

in the digital payment system.

Data Collection Procedures

Before conducting the interview with the research participants, the researcher will initiate

this study with a permit from the administrators of the Biliran Province State University.

The researcher shall retrieve the letter of request and begin a thorough interview with the

participants in the study while following the rules and regulations that is stated.

Interviewee will be selected by purposive sampling to ensure that their experiences have

relevance in the society.

This study aims to understand how residents of Naval, Biliran engage with cashless

transactions using systematic methods of data collection. The first stage of the research

participant’s identification involves purposive sampling where citizens of Naval, Biliran

who actively engage with mobile wallets, online banking and payments are targeted.

Participants will be briefed on the study’s purpose which ensures confidentiality will be

respected. Following this, semi-structured interviews will be conducted exploring the

participants’ perspective on usability, safety, and changes in spending patterns. The

interactions and other relevant details.

The data will be arranged and cleaned for any inaccuracies before analyzing the data to

capture important themes and patterns. This step will ensure that the data is credible and

the participants received the opportunity to modify their initial responses. Lastly, the

analysis will be done on the how consumers’ spending behaviors, decision making, and

trust in cashless digital payments system is shaped.

Data Analysis

In phenomenological research, data is analyzed with a focus on the participants’ lived

experiences.

Step 1: Bracketing (Epoche)

In Moustakas’ theory, barriers must be created to restrict the influence of one’s imposing

biases on the interpretation of the experience, in order to maintain as much objectivity as

possible. This eliminates the influence of preconceived ideas during the data collection

process.

Step 2: Transcription and Familiarization

Van Manen points out that it is equally important to transcribe data and pay close

attention to the verbatim rendition of a participant’s story. Repeatedly reading the text

transcends capturing the sentiments and patterns surfacing underneath the surface of

the text.

Step 3: Horizontalization

Giorgi states the equal consideration of all statements offered by an interviewee, and

their subsequent elimination until the core statements that reflect the phenomenon under

study are left, reminiscences of the importance of texts offered in greater settings.

Step 4: Clustering Themes

participants’ texts. Using thematic analysis makes it possible to classify data into

categories that have meaning.

Step 5: Textural and Structural Descriptions

Moustakas in his modified Stevick-Colaizzi-Keen method insisted on making a textural

description of what the participants went through and a structural description of how this

was done. One struggles to make sense of these two forms of descriptions which simply

make sense of the phenomenon under study.

Ethical Consideration

When conducting the interview, the researcher will remind participants of the study's

intention, research procedures, anticipated benefits, their right to withdraw from the study

at any time, and confidentiality security as the first step in the interview process.

Participants will also be asked if they have any concerns about the research study or the

research process by the researcher. The researcher will also share personal information

in order to interact effectively and gain their trust (Patton, 1980).

Arevalo, J., et al. (2024). Exploring Digital Payment Adoption in Rural Areas: Addressing

the Research Gap. Journal of Financial Technology & Society.

Creswell, J. W. (2013). Qualitative Inquiry and Research Design: Choosing Among Five

Approaches. SAGE Publications.

FDIC. (2024). Understanding Financial Inclusion and the Adoption of Digital Payments.

Federal Deposit Insurance Corporation Report.

Giorgi, A. (2009). A Phenomenological Approach to Understanding Human Behavior.

Journal of Phenomenological Psychology, 40(1), 35-58.

Kerridge, K. S., & Gillen, J. (2013). Strengthening Security in Electronic Payment

Transactions. Journal of Financial Security and Mobile Payments.

Liébana-Cabanillas, F., et al. (2018). Psychological Aspects of Cashless Payments:

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Moustakas, C. (1994). Phenomenological Research Methods: Exploring Lived

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Patton, M. Q. (1980). Qualitative Evaluation Methods: Gaining Deeper Insights into

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Propulsion Tech Journal. (2023). How Mobile Wallets and Online Banking Influence

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Seamon, D. (2023). Examining Consumer Experiences with Digital Payments through a

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Widayani, A., et al. (2022). Trust and Financial Management in a Cashless Economy:

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