The effects of subjective norm and knowledge about riba on intention to use e-money in Indonesia

Abstract

Purpose Prior studies in the context of electronic money have examined the effect of social pressure [subjective norm (SN)] on usage intention, but the results are found inconclusive. Individual factor is said to be one of the reasons. Therefore, this study aims to propose knowledge about riba (KR) as the individual factor that might explain the inconsistent previous findings. Design/methodology/approach A total of 253 responses are collected using online questionnaire. The data are examined by using structural equation modeling (SEM). The interaction moderation technique is used to investigate the moderating role of KR on intention to use e-money. Findings The results show that SN significantly influences customers’ perceived usefulness (PU), ease of use (PEU) and intention to use e-money (INT). PU is also proven as a direct predictor of INT. On the contrary, PEU does not significantly influence customer INT, providing support for the indirect effect of hypotheses between PEU–PU–INT. Furthermore, KR is found moderate in the link between PU and INT. Interestingly, the moderating effect of KR does not exist in the relationship from SN and PEU to INT. Research limitations/implications This study has a limitation in terms of the samples that are mainly dominated by students. Students’ perception might be different from practitioners’. Practical implications The results indicated that Indonesian customers are getting aware and knowledgeable about riba. It weakens the effect of PU on INT. SN as a social factor has also a strong effect on INT. As a practical implication, this paper suggests the government to develop and regulate a more Sharia-compliant business model for e-money. The public must be well informed and also well educated. The socialization and education must be included in any Muslim communities. In addition, given the fact that the chip-based e-money products in Indonesia are owned by conventional banks, it is going to be a wise idea if the government can partner up with the Islamic banks to design and develop the Sharia-compliant e-money. Originality/value This paper contributes to the electronic money and internet banking literature by considering Islamic principle factor, that is the rise of public KR. This paper show that inconclusive previous findings might be depended on the public KR.