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UGANDA CHRISTAIN UNIVERSITY, MUKONO

FACULTY OF BUSINESS AND ADMINISTRATION

E-BANKING SERVICE PERCEPTION: AN EVALUATION OF AUTO TELLER

MACHINE (ATM) USAGE IN UGANDA

BY

ASERE GLORIA SANDRA

(S10B05/029)

A dissertation submitted to the faculty of Business & Administration in partial

fulfillment of the requirement for the Award of Bachelors of Business Administration

degree of Uganda Christian University- Mukono.

2013


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DECLARATION

I ASERE GLORIA SANDRA declare that this research report is my original work and to the

best of my knowledge has never been submitted to any institution for any academic award.

NAME: ASERE GLORIA SANDRA

Signature

Date :.


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APPROVAL

This is to certify that this research report by ASERE GLORIA SANDRA was done under my

supervision and is now ready for submission with my approval to faculty of Business andAdministration.

Signature .Date.

Dr.OLOBO MAURICE


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ACKNOWLEDGEMENT

I take this opportunity to thank the Almighty God for having given the gift of life plus my

parents who bare me and also gave me a chance in life to attain all the benefits of my courseat Uganda Christian University.

I appreciate the efforts of all my respondents who offered me all the assistance I needed while

I was doing my research especially the students (my class mates). My God reward them for

their kindness and the spare time offered.

Among all is my supervisor Mr. OLOBO MAURICE for giving me all the maximum

attention and having patience when there was a delay and above all for the excellent guidance

that was needed to complete my research smoothly.

I am also indebted to send my special thanks to the following people; My parents for all the

support they gave me while I was doing my degree; my sister and brothers for the help they

gave me while I was doing this work; My friends Maling Samuel, Nambozo Faith,

NamukobeBarbra, WeragireDarion, Brenda .A, Alice M and many others who gave me a

hand while I was doing this work.


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ACRONYMS

P.U - Perceived Usefulness

PEOU - Perceived Ease of Use

B.I - Behavioral Intention

TRA - Theory of Reasoned Action

TAM - Technology Acceptance Model

ATM - Auto Teller Machine

St.D - Standard deviation

SA - Strongly Agree

A - Agree

NS - Not Sure

D - Disagree

SD - Strongly Disagree.


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LIST OF TABLES

Table 4-1: Back Ground Research Data ..................................................................................29

Table 4-2: Perceived Usefulness of Auto Teller Machines (ATM) ............................................30

Table 4-3: Perceived Ease of Use of Auto Teller Machines (ATM) ...........................................31

Table 4-4: Behavioral Intention to Use Auto Teller Machines (ATMs) .....................................32

Table 4-5: Bank Policy on ATM Usage ....................................................................................33

Table 4-6: Internet Accessibility .............................................................................................33

LIST OF FIGURES

Figure 1-1: conceptual frame work....5


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TABLE OF CONTENTS

DECLARATION ........................................................................................................................... i

APPROVAL .............................................................................................................................. iii

DEDICATION ........................................................................................................................... iv

ACKNOWLEDGEMENT.............................................................................................................. v

ACRONYMS ............................................................................................................................. vi

LIST OF TABLES ...................................................................................................................... vii

ABSTRACT ............................................................................................................................... xi

CHAPTER ONE; ........................................................................................................................1

1.0 INTRODUCTION .................................................................................................................1

1.1Background of the study .....................................................................................................1

1.2 statement of the problem ..................................................................................................2

1.3 The purpose of the study ...................................................................................................2

1.3.1 The specific objectives ....................................................................................................2

1.4 Research Questions ...........................................................................................................3

1.5 The scope of the study .......................................................................................................3

1.6 Significance of the study ....................................................................................................3

1.7 The limitations of the study ...............................................................................................4

CHAPTER TWO. .......................................................................................................................6

LITERATURE REVIEW ................................................................................................................6

2.1. Introduction ......................................................................................................................6

2.2. Perceived usefulness, Perceived ease of use and Behavioral Intention to use on ATMs ....7

2.3. Perceived usefulness and behavioral intention to use ATM ............................................11

2.4. Behavioral intention and ATM System ............................................................................13

2.5. Perceived ease of use and perceived usefulness .............................................................15

2.6. Perceived ease of use and behavioral intention to use ATM ...........................................21


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CHAPTER THREE ....................................................................................................................24

3.1 Introduction .....................................................................................................................24

3.2 Area of Study ...................................................................................................................24

3.3 Research Design...............................................................................................................24

3.4 Target Population ............................................................................................................25

3.5 Sampling Method / Sampling Size ....................................................................................25

3.6 Data Collection Methods .................................................................................................25

3.7 Data Collection Instruments.............................................................................................26

3.8 Research Procedure .........................................................................................................26

3.9 Data Analysis and Presentation ........................................................................................27

3.10 Ethical Considerations ....................................................................................................27

3.11 Limitation of the Study...................................................................................................27

CHAPTER FOUR .....................................................................................................................28

4.1 Back ground data of the Respondents..............................................................................28

4.2. Response on Perceived Usefulness of the Auto Teller Machines (ATM)...........................30

4.3. Perceived Ease of Use of Auto Teller Machine (ATM) ......................................................30

4.4. Behavioral Intention to Use Auto Teller Machines (ATMs) ..............................................31

4.5. Bank Policy implication on Auto Teller Machine (ATM) Usage .........................................33

4.6. Assessing the level of Internet Accessibility.....................................................................33

CHAPTER FIVE .......................................................................................................................35

5.0 INTRODUCTION ...............................................................................................................35

5.1 DISCUSSION OF THE FINDINGS .........................................................................................35

5.2 CONCLUSIONS .................................................................................................................37

5.3 RECOMMENDATIONS ......................................................................................................37

5.4 AREAS FOR FURTHER RESEARCH ......................................................................................38

REFERENCES ..........................................................................................................................39


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APPENDICES

QUESTIONAIRE FOR AUTO TELLER MACHINE (ATM) USERS/ HOLDRES..............................42

Introductory letter...46


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ABSTRACT

The study examines E-banking service perceptions; An evaluation of Auto Teller Machine

(ATM) usage in Uganda. Itsexpected that once customers perceive the ATM system to be

useful, this consequently influences their Behavioral Intention to use the system. Further their

Perceived Ease of Use influences their Perceived Usefulness leading to Behavioral Intention

to use the ATM system. A conceptual frame work was developed relating to Technology

Acceptance Model (TAM).

Most Technology Acceptance Model studies have been empirical investigations, using the

survey approach with great success. TAM is a mature model and has been validated in the

different contexts. The study used Statistical package for Social Scientists (SPSS v 16.0)

which was used for data analysis, Questionnaires and Observation during data collection was

used during the field work study.

Here, different levels of variance analysis on the TAM construct in the context of Auto Teller

Machine (ATM) banking acceptance has been applied. The findings suggested that male or

female, old young, ATM banking customers conceptualized the TAM construct in very

similar ways. These findings allowed us to understand TAMs validity in Technology

Acceptance research in relation to ATM banking in Financial Institutions.


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CHAPTER ONE;

INTRODUCTION AND BACKGROUND OF THE STUDY;

1.0 INTRODUCTION

This study is intended to ascertain e-banking service perceptions; an evaluation of ATM

usage in Uganda. This chapter presents the background of the study, the statement of the

problem, the objectives of the study, research questions, and significance of the study, the

scope and limitations of the study.

1.1Background of the study

In the traditional methods of banking, the use of bank tellers was the way to provide one on

one contact with the customers. However, the need to provide a 24 hour continuous service

and reduction of congestion in the banking hall,the ATM was brought on board as a way of

improving these services. The need for cost reduction in the use of back-office staff also

prompted the introduction of the ATM service. This brought about a lot of expectations from

both the bank and the customers on the performance of this self-service technology.

Globally ATMs (Automatic Teller Machines) first came into use in December 1972 in the

UK. (http:Wikipedia.org/wiki/automated-teller-mechanic). In Uganda, ATMs were

introduced in the banking sector in 1990s; the first ATM was brought in by SCI/NCR for

Standard Chartered bank in September, 1997 (www.enteruganda.com).

Theoretically customers perception of service consists of two dimensions. Berry and

Parasuraman (1991) distinguish a process and an outcome dimension. Of the five dimensions

of quality, reliability is primarily concerned with the service outcome, whereas the rest are

primarily concerned with the service process. However, all the five dimensions emphasize the

customers perception of the service (functional quality) rather than the service providers

view of how the service should be delivered (technical quality).Gronroos (1990) however

makes the distinction between functional and technical quality. The process of functional

quality refers to how the service is delivered, whereas technical quality which is the outcome

refers to what customers receive (the benefits of using the service). In the case of the ATM,

how cash is processed is a functional benefit, whereas effectiveness, less time spent in an

ATM, easy to use and efficiency over the traditional methods are known as technical benefit.
http://www.enteruganda.com/http://www.enteruganda.com/http://www.enteruganda.com/http://www.enteruganda.com/


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Parasuraman, Berry and Zeithaml (1988) categorized service quality in to five dimensions

namely; reliability, tangibles, responsiveness, assurance, empathy. Reliability refers to the

ability to perform the promised service dependably andaccurately. Relates to the ability to

provide a service as expected by customers in terms of speed (how quick the transaction is

performed), accuracy (how correct is the transaction in terms of money withdrawn) and if the

equipment is operational 24 hours as expected.

ATMs provide customers with numerous benefits such as time and cost savings, greater

control over the service delivery ( Meuter and Bitner, 1998), convenience (Kauffman and

Lally,1994), enjoyment (Dabholkar 1996) and sometimes even spontaneous delight (Bitner el

al;2000). Despite these benefits, some consumers consider ATMs threatening (Curran el al;

2003). Anxiety and low-perceived ease of use are two common barriers inhibiting

consumers usage of ATMs (Meuter et al; 2003). Yet, its in the interest of service

organizations to reduce these barriers as ATMs can reduce costs, increase productivity (

Dahbolkor,1996) and improve competitiveness and market share (Bitner, 1998).

1.2 statement of the problem

The ATM system was originally introduced in the banking sector to reduce on the

congestions in the banking hall, since the ATMs were to provide a 24 hour continuous service

to the people. In spite the installation of automatic teller machines (ATMs) by financial

institutions in the bank premises and other strategic locations in the country, there is still

congestion in the banking halls. A study carried out by (Ssenfuma, 2007) on the relationship

between ATM operations on customer service quality, indicated that 12.5% miss the human

teller smile. The study further revealed that over 67.5% of the customers agreed that ATMs

retard customer relationship; this has been caused by the failure of the ATMs to meet the

expectations of the customers and the adoption of ATM usage being affected by the different

service perceptions.

1.3 The purpose of the study

The purpose of this study was to examine e-banking service perceptions; an evaluation of

ATM usage in Uganda.

1.3.1 The specific objectives

The study was guided by the following objectives,


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i) To establish the effect of service perception on behavioural intension to use the

ATM system.

ii)

To establish the relationship between behavioural intention and congestion in the

banking halls.

iii) To examine the influence of the bank policy and internet accessibility on

behavioural intension to use the actual ATM system.

1.4 Research Questions

The study was guided by the following research questions,

i) What is the effect of service perception on behavioral intension to use the ATM

system?ii) What is the relationship between behavioral intension to use and congestion in the

Banking halls?

iii)

What is the influence of the banks policy and internet accessibility on behavioral

intension to use the actual ATM system?

1.5 The scope of the study

1.5.1 Theoretical scope

The study was carried out based on two theories that is Theory of Reasoned Action(TRA) by

Fishbein and Ajezen 1975 and the Technology Acceptance Model (TAM) pioneered by Davis

in 1989. These two theories were used to analyze and evaluate ATM usage in Uganda.

1.5.2 Geographical scope

The study was limited to financial institutions (banks) with in Kampala.

1.6 Significance of the study

This research will help management of the banking sector analyze the importance of service

perception on customersbehavioralintension to use the ATM. since it has got a great impact

on customers usage of the ATM system.

This research will help bring about improvement of the ATM facility as this will enlighten

the management about the importance of service quality improvement in the ATM system.


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This research will help improve on the level of technology being provided by the ATM

service system that is in terms of security and options being provided during the transactions

in an ATM. And in addition improve on the maximum amount of money that is allowed to be

withdrawn with a day by the clients.

1.7 The limitations of the study

The research was limited by the negative attitude of same of the respondents during the

answering of the questionnaires. Same respondents attitude kept changing negatively; hence

this greatly affected their response to the different questions asked, making same

questionnaires invalid and not reliable to the study.

The respondents didnt have the time to answer same of the questions in the questionnaires.This left same of the vital questions un answered during the research study in the field. As,

same of the respondents didnt have the time to answer the questionnaires at all. Thi s reduced

the sample space that was originally planned in the research study.

The different moods of the respondents towards the questions also greatly affected limited the

research. Same respondents have swinging moods depending on the questions asked; this

makes their responses towards the questions unreliable at all, since one is not sure if the

respondent was in his/her mood at that time.


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Fig 1-1: The Conceptual Framework

Source: Researcher

Perceived Ease of use.

Perceived Usefulness

Behavioral

intention

Congestion

Internet accessibility.

Bank policy

Power availability


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CHAPTER TWO.

LITERATURE REVIEW

2.1. Introduction

This chapter presents a review of related literature on the study variables especially perceived

usefulness, perceived ease of use and behavioral intention to use.

The Technology Acceptance Model (TAM) is an information systems theory that models

how users come to accept and use a technology. The model suggests that when users are

presented with a new technology, a number of factors influence their decisions about howand when they will use it.

Technology Acceptance Model (TAM) posits that two particular beliefs, perceived usefulness

and perceived ease of use, can predict ATM actual use. Perceived usefulness and ease of use

are meant to be fairly general determinants of actual use.

According to TAM, perceived usefulness is influenced by perceived ease of use because the

easier a technology is to use, the more useful it can be (Dabholkar, 1996).

The Theory of Reasoned Action (TRA), (Fishbein and Ajezen 1975), posits that perceived

usefulness and perceived ease of use determine an individuals intension to use a system,

with intention to use servicing as a mediator of ATM usage.

According to TRA (Theory of Reasoned Action), the unique behaviour of an individual is

determined by ones behavioral intention (BI) to act on the behaviour, and it is performed in

conjunction with an individuals attitude and subjective norm of the behaviour that is being

performed.

Both the Technology Acceptance Model (TAM) and Theory of Reasoned Action (TRA) have

strong behavioral elements that assume that when same one forms an intention to act, they

will be free to act without limitations.


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2.2.Perceived usefulness, Perceived ease of use and Behavioral Intention to use on

ATMs

TAM has earlier postulated that two beliefs, known as (i) the Perceived Usefulness and (ii)

the Perceived Ease of Use, determine the attitudes of people toward using a particular system.

Such attitudes together with Perceived Usefulness would subsequently determine use

intention and furthermore, this would lead to the actual use of the system. Studies by Agarwal

and Karahanna (2000) and Venkatesh and Davis (2000) both indicate that Perceived Ease of

Use and Perceived Usefulness affect behavioral intentions through direct and indirect

forms. Other researchers like Szajna (1996) posit that Perceived Usefulness has a direct

influence on intention whereas the Perceived Ease of Use has only an indirect effect on

intention through Perceived Use.

This is similar with the findings of Chen et al. (2003), who found that Perceived Usefulness

appears to be the only construct that has a significant direct influence on intention. On the

other hand, Mallat et al. (2006) suggested that the effect of usefulness on use intention is

dependent on situations where a system is used, even though Perceived Usefulness and

Perceived Ease of Usefulness are the primary predictors concerning beliefs about use

intentions. In contrast, a study by Wu and Wang (2005) revealed that ease of use and

usefulness was both significant factors that affect the use of a technology generally. Hence, a

research model and associated hypotheses below were developed to guide this study. In the

Malaysian context, it should be noted that researches on technology use have demonstrated

that the Perceived Ease of Use and Perceived Usefulness are important predictors on the

decision to not only adopt a technology but also to continue to use that technology (Guriting

and Ndubisi, 2006; Ignatius and Ramayah, 2005; Ramayah, 2005, 2006a, 2006b; Ramayah

and Jantan, 2004; Ramayah et al., 2005).

A significant body of TAM studies (e.g. Davis, 1989; Mathieson, 1991; Adams et al., 1992;

Segars and Grover, 1993; Sjazna, 1994; Igbaria et al., 1997) has shown that perceived

usefulness and perceived ease of use are determinants of usage. Martocchio (2005) pointed

out that customers system use can be predicted reasonably well from their intentions,

intervened between usefulness and behaviour intention to use. Malone (1990) in her study

proved that perceived usefulness influences ones emerged the major determinant of ATM useacceptance though behavioral intention to use had a significant effect beyond perceived


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usefulness. It has been noted that customers intention to use and ease of use have got a

critical impact on successful use of the ATM system (Venkatesh, 1996). He further asserts

that, if customers are not willing to accept a particular system, it will not bring full benefits to

the bank. The more accepting of a system the customers are, the more willing they are to

make changes in their time and effort to use the system.

The Theory of Reasoned Action (TRA), (Fishbein and Ajezen 1975), posits that Perceived

Usefulness and Perceived Ease of Use determine an individuals intention to use a system,

with intention to use servicing as a mediator of ATM usage. Perceived Usefulness is yet seen

as being directly impacted by Perceived Ease of Use. In a bid to extend the TAM model three

approaches have been taken into consideration, say by introducing additional or alternative

belief factors, by introducing factors from related models and by examining antecedents and

moderators of Perceived Usefulness and Perceived Ease of Use (Wixam and Todd, 2005).

Both the TAM and TRA have strong behavioral elements that assume that when same one

forms an intension to act, they will be free to act without limitation. In reality constraints such

as limited ability, time, environment or organization limits and unconscious habits will limit

the freedom to act. Perceived Ease of Use and Perceived Usefulness predict the attitude

towards the system, which in turn predicts behavioral intention to use the system. which in

turn predicts use of the ATM.

Fishbeins and Azjens (1975) theory of reasoned action provides the theoretical basis for

TAM. Fishbein and Ajzen hypothesized that an individualsbehaviour depends on his or her

intention to use the system. The individuals evaluation with respect to the act, and the

persons subjective norm or perception of the normative pressures regarding the behaviour.

Davis (1986, 1989) adopted the belief, attitude-intention-behaviour sequence to explain user

acceptance of information technology.

According to Davis et al. (1989), TAM was intended to provide an explanation of the

determinants of system acceptance that is general, capable of explaining user behaviour

across a broad range of end-user computing technologies. Davis (1986) proposed that

perceived usefulness and perceived ease of use predict usage of the system. With theoretical

support from various theories and models including expectancy theory, self-efficacy theory,

cost-benefit research, innovation research, and the channel disposition model, TAM


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postulates that computer usage is a function of the end-usersbehavioral intention to use the

system.

Davis and Davis et al proposed TAM to address why users accept or reject information

systems. Their model is an adaptation of the theory of reasoned action proposed by Fishbein

and Ajzen to explain and predict the behaviors of people in a specific situation. TAM is to

provide a basis for tracing the impact of external variables on internal beliefs,attitudes, and

intentions. It suggests that perceived ease of use and perceived usefulness are the two most

important factors in explaining system use.

Behavioral intention was jointly determined by a persons attitude toward using the system as

well as the end-users perception of the usefulness of the system. TAM also postulates that

perceived usefulness is influenced by perceived ease of use and external variables. External

variables that influence perceived usefulness include features of the system, training,

documentation, demographic characteristics of end-users, and end-user support.

TRA and TAM propose that external variables intervene indirectly, influencing attitude,

subjective norms, or their relative weight in the case of TRA, or influencing perceived ease of

use and perceived usefulness in the case of TAM. Behavioral intention to use is a common

construct in both TRA and TAM, and Davis usedFishbein and Ajzens method to measure

them. Davis chose not to keep the variable subjective norms, because he estimated that it had

negligible effect on Behavioral intention. In TAM2, Venkatesh and Davis reconsidered this

choice.

Perceived usefulness, perceived ease of use are strong determinants of behavioral intention to

adopt ATM banking system. Also an indirect effect of computer self-efficacyand prior

general computing experience on behavioral intention through perceived usefulness

perceived ease of use. The Technology Acceptance Model pioneered by Davis (1989)

advances the TRA by postulating that perceived usefulness, perceived ease of use are key

determinants that inevitably lead to the actual usage of a particular system. Perceived ease of

use has a direct effect on both perceived usefulness and technology usage (Adams, Nelson &

Todd, 1992; Davis, 1989).


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Having discussed technology acceptance in light of the TAM model and other modified

theories relating to technology acceptance with all its constructs, its necessary we discuss

why some customers reject ATM system use in Commercial Banks. As regards the review of

some of the most popular theory, the focus is basically on elements that encourage

acceptance of technology. There is scarcity of theory on why customers do not accept ATM

system use. The review of the literature and the theory speaks to the need for further research

in this area and for the need to expand upon current theories which focus solely on

technology acceptance. TAM and TAM2, TRA, and TRB theories, as already described are

the prominent theories which have established a base of academic knowledge on technology

acceptance.

All of the literature is derived from the concept of intention based theory; intention that when

exercised allows an individual to adopt technology. Yet what then is the theory that causes an

individual to reject technology? If intention and attitude remain at the heart of behaviour, we

must scrutinize the motives that result in rejection of technology in order to provide a

balanced view of why someone would reject using ATM banking system. On the surface it is

one of the most logical and convenient technological devices that one could utilize. Ease of

use, convenience and personal security are the hallmarks of ownership of this technology.

Yet there are a proportion of Commercial Bank customers who choose to reject this

seemingly beneficial service. What are the intentions and attitudes that drive the behaviour of

rejection and resentment?

(Goode, 2005) asserts that, acceptance is not the opposite of rejection. Technology rejection,

as a topic, has been largely ignored in the research literature. Goode produced a working

paper that looked at the current literature on technology rejection. He calls for the

advancement of further research in order to develop an adequate understanding of why

organizations and end-users reject information technology systems. From that research,

existing theory can be expanded or new theory developed, as to why technology is rejected.

There exists a general belief in the IT community that technology adoption leads to

organizational success as well as the success of end-users. Yet not everyone adopts

technology and the reasons why do not appear to be well researched or understood. There is a

call for new thinking and new approaches to the adoption problem. Research has overlooked

the thinking that rejection of technology is in fact an alternative to acceptance.


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Understanding why people accept or reject information systems has proven to be one of the

most challenging issues. (Davis et al. 1989) This same statement can apply to individuals

acceptance or rejection of ATM banking system in Commercial Banks.

As Davis (1989) noted, future technology acceptance research needs to address how other

variables affect usefulness, ease of use, and user acceptance. However, factors affecting the

acceptance of a new IT are likely to vary with the technology, target users, and context(Moon

and Kim, 2001). Recent research has indicated that trust has a striking influence on user

willingness to engage in online exchanges of money and personal sensitiveinformation (e.g.

Hoffman et al., 1999; Friedman et al., 2000). Therefore, PEU and PU may not fully reflect

the users intention to adopt Internet banking, necessitating a search for additional factors that

better predict the acceptance of e- banking.

2.3. Perceived usefulness and behavioral intention to use ATM

Perceived Usefulness is the degree to which an individual believes that using a particular

system would enhance his or her job performance (Al-Gahtani, 2001; Davis, 1993; Mathwick

et al., 2001). Another study by Tan and Teo(2000) indicates that Perceived Usefulness is an

important factor in determining the adaptation of innovations. As observed by Bhattacherjee

(2002), a persons willingness to transact with a particular system is already considered as

Perceived Usefulness. It shows that user behaviour is determined by perceptions of

usefulness and the ease of use of the technology (Adams et al., 1992). According to Gong and

Xu (2004) he defines perceived usefulness as the users subjective probability that using a

specific application system will increase his or her expectations. Awamieh R. &Fernandes, C

(2006) added that perceived usefulness is the degree to which a potential customer views

ATM banking as offering advantages over previous ways of performing the banking

transactions.

Behavioral intention to use is the measure of the strength of ones intention to perform a

specified behaviour (Malhotra, Y 1999). According to Chan, (2004) underlying processes in

which a customer engages when he/she adopts induced behaviour may be different.He

presented three different processes that greatly affect customers behaviour: compliance:

when an individual adopts the induced behaviour not because she believes in its content butwith the expectation of gaining rewards; Identification: when an individual accepts influence


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because she wants to establish a satisfying self-defining relationship to another person and;

Internalization, when a customer accepts influence because it is congruent with her value

system. By distinguishing between these processes, one ascertains that behavioral intention to

use a system is influenced by perceived usefulness.

Previous researches have provided evidence of the significant effect of Perceived usefulness

on behavioral intention to use (Agarwal& Prasad, 1999; Davis et al., 1989; Venkatesh, 1999;

Venkatesh, 2000; Venkatesh& Morris, 2000; Chau& Hu, 2001; Ramayah et al., 2003;

Pikkarainen, et al., 2004). Perceived usefulness has a direct effect on behavioral intention and

above attitude. The perceived usefulnessbehavioral intention relationship is strongly based

on the idea that, people form intention toward behaviors they believe will increase their

system use, over and above whatever positive or negative feeling may be evoked toward the

behaviour. Hence, the Perceived usefulness -behavioral intention relationship in TAM

represents the outcome of direct effect, hypothesizing that people form intention toward using

ATM system based on a cognitive appraisal of how it will improve their ATM system use.

Davis original model explains perceived usefulness and behav ioral intention to use in terms

of social influence and cognitive instrumental processes. The extended model was tested in

both voluntary and mandatory settings. The results strongly supported model and the authors

were able to explain 60% of their adoption model using this updated version of

TAM(Venkatesh and Davis 2000). The study highlights social influence through subjective

norm, defined as persons perception that most people who are important to him think he

should or should not perform the behaviour in question, significantly influences perceived

usefulness. Cognitive factors also play an important role. For example, the greater the

perceived system relevance, defined as the individuals perception regarding the degree to

which the target system is applicable to his or her job) of a new system is, the more

important output quality (defined as the consideration of how well the system performs

those tasks) becomes. (Venkatesh, Davis, 2000).

Venkatesh and Davis (2000) presented theoretical extensions to the technology Acceptance

Model (TAM) (Davis, 1986, 1989). Their new model, TAM2, explains perceived usefulness

in terms of cognitive and social influence processes. Vankatesh and Davis suggested job

relevance, one of the cognitive processes that demonstrated a statistically significant

relationship with perceptions of usefulness of technology and suggested this construct may be


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analogous to construct of person-job-fit (Meyer & Allen, 1991). From its original model,

TAM has evolved over time. The notion of time has also been included in the analysis of the

factors that influence use. Research has shown that the influence of some factors on intention

to use ATM system influence perceived usefulness. Presently, the works of (Venkatesh&

Davis, 2000) on the Technology Acceptance Model (TAM) has focused on developing

theoretical extensions that explain perceived usefulness, in particular, in terms of cognitive

and social influence processes.

2.4. Behavioral intention and ATM System

Technology adoption (or usage) decisions have been typically characterized by a strong

productivity orientation (Venkatesh and Brown, 2001). The Automatic Teller Machine, once

considered a luxury, has become the conventional communication tool. The contents that

used to deliver limited information are now able to provide a variety of information and

banking services such as withdrawing, deposit, inquiries (Cheong, J., and Park, M.,

2005).with the rapid increase of the ATM usage, the growing penetration of wireless devices,

and the rapid technological innovation, wireless technology shifts the world of wired internet

to the wireless mobile internet. ATM is expected to deliver great business opportunities to

market participants. The key factor of the success is dependent on understanding the concerns

of customers and identifying the determinants that leads to individuals behavioral intention

to adopt the ATM.

In TAM, similar to TRA, an individuals belief determines the attitude toward using the

system and, in turn, the attitude develops the intention to use. Finally, this intention

influences the decision of actual system usage. These causalities are broadly studied and

accepted (Chen et al., 2002; Suh and Han, 2002; Morris and Dillon, 1997; Teo et al., 1999).

Actual system use refers to (how often) and the volume ofsystem use (how much) by the

user (Davis, 1989). Davis asserts that ones behavioral intention influences actual system

usage. This is due to the internalization and identification that may influence behavioral

intention directly via compliance. Its further argued that, once end users of the system are

not informed or educated about the need or relevance, this will greatly influence their

behavioral intention to use.


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Technological Acceptance Model (TAM) has been tested in many studies such as (Davis etal,

1989; Mathieson, 1991; Adams et al., 1992; Davis, 1993; Segars and Grover, 1993; Taylor

and Todd, 1995), and it has been found that an individuals behavior to use a system largely

explains their intentions. Consequently, (Methieson, 1991) previous studies have found that

TAM consistently explains a significant amount of the variance in usage intentions and

behaviour. The model puts it that behavioral intention to use has a significant impact on a

users ability to actually use a system. Behavioralintention to use the system is modeled as a

function of actual system use and perceived usefulness (Davis et al., 1989 Taylor and Todd

1995).

The Theory of Reasoned Action has been considered with much attention as it gives a clear

explanation between behavioral intention to use and actual system use with regards to

adoption of technology. Theory of reasoned action (TRA) is a much researched area that has

been applied across a number of areas. The authors, Ajzen and Fishebein ascribe that their

theory applies to behavioral intention to use. Several researchers have used this theory

extensively to better understand users behaviors in technology adoption.

According to TRA, the unique behaviour of an individual is determined by ones behavioral

intention (BI) to act on the behaviour, and it is performed in conjunction with an individuals

attitude and subjective norm of the behaviour that is being performed. Attitude is the result of

what the person believes about the action that is being performed and the expected result.

Subjective norm is the result of an individuals response to the perceived expectations of his

or her peer group and his belief that he must comply with those expectations. TRA addresses

a persons internal psychological variables by which multiple external variables are studied.

Information technology researchers have relied heavily on this theory to lay the groundwork

for a better understanding of why users adopt technological innovations.

Intentions to perform behaviors of different kinds can be predicted with high accuracy from

attitudes toward the behavioral subjective norms and perceived behavioral intentions; and

these intentions, together with perceptions of behavioral control, account for considerable

variance in actual ATM use. Attitudes, subjective norms and perceived behavioral control are

shown to be related to appropriate sets of salient behavioral, normative, and control beliefs

about the behaviour, but the exact nature of these relations is still uncertain by (IcekAjzen

1985, 1987).


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In addition to that, Ajzen theory is rooted in the psychological exploration of human

behaviour and all of the intricacy that is involved in understanding a persons behaviors.

Concepts dealing with behavioral intention to use such as social attitude and personality trait

have played an important role in these attempts to predict and explain actual system use

(Ajzen, 1988; Campbell, 1963; Sherman & Fazio, 1983). Behavioral intention to use the

ATM system is determined by the intention to perform. The behaviour which is predicted by

three factors: attitude towards the behaviour, subjective norms, and perceived behavioral

control that eventually determines ATM system use.

2.5. Perceived ease of use and perceived usefulness

Perceived ease of use refers to how clear and understandable interaction with the system is,

ease of getting the system to do what is required, mental effort required to interact withthe

system, and ease of use of the system (Ndubisi et al., 2003). Rogers (1962) theorized that

Perceived Ease of Use demonstrates the degree to which an invention is seen as being not too

difficult to understand, learn or operate. Perceived Ease of Use in Technological Acceptance

Model has been defined as the extent to which a person believes that using a certain

technology will be free of effort (Davis, 1989). Perceived Ease of Use has been demonstrated

in previous studies to influence behaviour, either directly or indirectly via Perceived

Usefulness.

However, previous researchers have not found conclusive evidence about whether the

construct in TAM would have a significant influence on the PU of technology (e.g. Keiland

Brenner, 1997; Lederer et al., 2000; Straub et al., 1997; Teo et al., 1999). Some studies have

linked Perceived ease of use to the success and quality of an information system (Seddon,

1997) as well as to customer satisfaction (Wang et al., 2001). In fact, Brown (2002) argued

that PU is not a major influence on usage but more on the external variables, which would be

more likely to affect Perceived Ease of Use.

In addition, Davis et al. (1989) proposed that perceived ease of use is an antecedent of

Perceived usefulness. Results from previous research also revealed the significant effect of

perceived ease of use to perceived usefulness (Kleijnen et al., 2004; Wang et al., 2003; Daviset al., 1989). Huang,J. Linn Y., and Chuang S. (2006) posits that two particular


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behavioralbeliefs, perceived usefulness (PU) and perceived ease of use (PEOU), are two

fundamental factors for predicting user acceptance, and that the effect of external variables on

intention are mediated by these two key beliefs (Adams et al., 1992; Davis, 1989; Davis et

al., 1989; Mathieson, 1991). PU is defined as an individuals perception that using a new

technology will enhance or improve her/his performance (Davis, 1989, 1993).

Perceived ease of use (PEOU) is defined as an individual s perception that using a new

technology will be free from effort (Davis, 1993). Perceived Ease of Use is hypothesized to

be a predictor of Perceived Usefulness. Moreover, both Perceived Usefulness and Perceived

Ease of Use are affected by external variables (Hu et al., 1999; Venkatesh et al., 2002; Wang

et al., 2003). Furthermore, Perceived Usefulness and Perceived Ease of Use have a positive

effect on attitude. Unlike in TRA, the subjective norm is not a determinant of behavioral

intention in TAM; instead, BI in TAM is affected only by Perceived Usefulness and attitude

(Davis, 1989). Perceived Ease of Use is normally related to the intrinsic characteristics of IT

(ease of use and ease of learning the technology), whereas the Perceived Usefulness to the

user relates to extrinsic factors like efficiency and effectiveness. As noted by Agarwal and

Prasad (1997), previous researchers adopted TAM because of its parsimony and the wealth of

empirical support.

Basing on what previous studies say (Awamleh&Fernandes, 2005) support for one or two of

the constructs was not provided thus a theoretical overlap between these two constructs i.e.(

perceived ease of use and perceived usefulness) whereas factor analyses have provided

support for this conclusion. Perceived usefulness and perceived ease of use significantly

contribute to an individuals behaviour (Hung 2004). According to Rogers (1995) the

perceived ease of use characteristics is supposed to provide the framework of how potential

adopters perceive usefulness of an innovation.

Perceived ease of use is defined as the individuals perception that using the new technology

will be free from efforts (Davis, 1989, 1993). Apply this to this researchcontext; perceived

ease of use is the customers perception that banking using ATM willinvolve a minimum

effort. Whereas perceived usefulness referred to customerspercept ion regarding the outcome

of the ATM banking system, perceived ease of userefers to perceptions regarding the process

leading to the final ATM banking use.According to TAM, ease of use has dual effect, direct

as well as indirect, on customers intention to bank using ATM system. The indirect effect on


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intention is through perceivedease of use and the direct effect is through perceived

usefulness.

By looking at the prevailing theory in the area of technology adoption, The Technology

Acceptance Model (TAM) is an information systems theory that models how users come to

accept and use a technology. The model suggests that when users are presented with a new

technology, a number of factors influence their decisions about how and when they will use

it.

Perceived usefulness defined by Fred Davis as the degree to which a person believes that

using a particular system would enhance his or her performance. Another factor presented

by Davis deals with perceived ease-of-use which is also defined by Davis as the degree to

which a person believes that using a particular system would be free from effort. (Davis,

1989) The technology acceptance model was developed by Fred Davis and Richard Bagozzi.

(Bagozzi et al., 1992; Davis et al, 1989). It was an extension of the work of Ajzen and

Fishbeins theory of reasoned action. (TRA) TRA is an important model from social

psychology that focuses on explaining the relationship between perceived ease of use and

usefulness.

TAM replaces many of the TRA attitude measures with the technology acceptance measures,

ease of use, and usefulness. TRA and TAM, both have strong behavioral elements, assume

that when someone forms an intention to act, that they will be free to act without limitation.

Within the normal operating environment there are many constraints, such as limited ability,

time constraints, environmental or organizational limits, or unconscious habits which will

limit the freedom to act (Bagozzi et al., 1992) The mere fact that new technologies such as

ATM systems are complex and an element of uncertainty exists in the minds of decision

makers with respect to the successful adoption of them, people form attitudes and intentions

toward trying to learn to use the new technology prior to initiating efforts directed at using.

Behavioral intentions to use may be ill-formed or lacking in conviction or else may occur

only after preliminary striving to learn to use the technology evolve. Thus, actual usage may

not be a direct or immediate consequence of such intentions. (Bagozzi, Davis, Warshaw,

1992).


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TAM posits that two particular beliefs, perceived usefulness and perceived ease of use, can

predict ATM actual use. Perceived usefulness and ease of use are meant to be fairly general

determinants of actual system use. Davis et al. (1989) described them as belief sets that are

meant to be readily generalizable to different system use. They argued that the ability to take

well-formed measures of the determinants of user acceptance early in the development

process can have an impact on actual system use acceptance by enabling developers to weed

out bad systems, refine the rest, and generally cut the risk of deliveringfinished systems that

get rejected by users.

Davis provided strong theoretical support for his perceived usefulness and ease-of-use

instrument(s) and used a rigorous development methodology (Davis et al., 1989). The

instruments are widely regarded and have received considerable attention by researchers

(Adams, Nelson, & Todd, 1992; Chin & Todd, 1995; Hendrickson, Massey, &Cronan,

1993; Igbaria, Guimaraes, & Davis, 1995; Mathieson, 1991; Segars& Grover, 1993; Straub,

Limayem, &Karahanna-Evaristo, 1995; Subramanian, 1994). Davis (1989), Adams et al.

(1992), and Subramanian (1994) have suggested that these instruments might be used broadly

within and across organizations to evaluate technologies, make comparisons between users,

and predict actual usage.

Subramanian (1994) found that the perceived usefulness and ease-of-use constructs were

robust and concluded that information systems researchers can use these instrumentsin

varying technological and organizational contexts. Software packages are tools that are used

for the purposes/tasks of the end-user. The concept of "usefulness" implies a purpose.

Applications can be considered "useful" if they contribute to accomplishing the end-users

purpose, and "easy to use" if the effort required to make use of the application is modest

relative to the end-user's frame of reference. Goodhue (1992) referred to purpose as the end-

users task.He argued that task characteristics influence behavioral intention to use and in the

end actual system use.

Past research provides evidence of the significant effect of perceived ease of use on usage

intention either directly or indirectly through its effect on perceived usefulness (Agarwal&

Prasad, 1999, Davis et al., 1989, Venkatesh, 1999; Venkatesh2000; Venkatesh&Morris,

2000; Ramayah&Aafaqi 2004, Ramayah 2006). Information systems that users perceive

easier to use and less complex will increase the likelihood of its adoption and usage (Teoetal.,


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1999). Perceived ease of use has been shown to influence behaviour for example information

technology adoption through two causal ways: (1) a direct effect on behaviour intention and

(2) indirect effect on behaviour intention via perceived usefulness.

Perceived ease of use positively influences behaviour intention. Past research by Hong et

al.,(2001), Gefen et al.,(2003), Heijden (2003), Venkateshet al.,(2003) and Heijden(2003)

also found Perceived ease of use and perceived usefulness to influence behavioral intention .

Perceived usefulness describes the perceptions of an individuals innovativeness. It has been

seen to have a great influence on ones behaviour reflected in terms of compatibility,

feedback, relative advantage and subjective norms. Perceived ease of use however describes

the individuals perception of how easy the innovation is to learn and use. This includes

support, complexity, and change. The model postulates that the users perceptions lead to

adoption behaviors that is an outcome of both perceived ease of use and perceived usefulness

that will eventually determine ATM system use.

Perceived ease of use and perceived usefulness study show that, usefulness makes an

individual underestimate the difficulty associated with using the technology since they simply

enjoy the process its self and do not perceive it to be arduous (Vankatesh, 2000).

In addition to that, studies based on Decis motivational theory (Deci, 1975) or Davis et

al.s work, on motivational model of technology acceptance (Davis et al 1992). The reason

behind this is that, systems that are perceived as easier to use are more likely to be perceived

as useable (Toe et al., 1999). Bandura (1986) shows the relationship between perceived ease

of use and perceived usefulness by showing self-efficacy as having a significant impact of the

effect : therefore , perceived ease of use (self-efficacy) is supposed to have a significant

impact on perceived usefulness.

However, its possible to argue that perceived ease of use influences intrinsic motivation,

rather than intrinsic motivation influences perceived ease of use. Given the focus on the TAM

model, an outcome and process expectancy model, intrinsic motivation is expected to

influence perceived ease of use as well as perceived usefulness (Vankatesh, 2000).

Applying the definition of perceived usefulness to our research context, as new information

systems are being introduced in place we classify ATM banking system, and as the

individuals performance the outcome of the ATM banking system use. Then, perceived


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usefulness refers to customers perception that using ATM as a banking system enhances the

outcome of their banking needs. These perceptions influence customers attitude toward

ATM baking system and their intention to bank using ATM system. TAM posits a weak

direct link between perceived usefulness and attitude and a strong direct link between

perceived usefulness and behavioral intention to use (Davis et al., 1989). This was explained

as originating from customers intending to use ATM banking system because it was useful,

even though they did not have a positive affect toward using it. In addition to that, there is a

very strong link between perceived ease of use and usefulness that d etermines customers

attitude towards using ATM banking system.

According to TAM, perceived usefulness is influenced by perceived ease of use because the

easier a technology is to use, the more useful it can be (Dabholkar, 1996). There is also

extensive research in the IS community that provides evidence of the significant effect of

perceived usefulness on usage intention (Agarwal and Prasad, 1999; Davis et al., 1989; Hu et

al., 1999; Jackson et al., 1997; Venkatesh, 1999, 2000; Venkatesh and Davis, 1996, 2000;

Venkatesh and Morris, 2000). The ultimate reason people exploit Internet banking systems is

that they find the systems useful to their banking transactions.

Service excellence is the customers appreciation of delivered promises and performed

functions. This is yet another factor to consider in a way that, service excellence operates as

an ideal standard against which judgments are ultimately formed (Holbrook, 1994). If ATM

banking meets this ideal by enabling the customers to accomplish the banking tasks he/she

has set out to perform then customers will judge the ATM banking performance positively

(Mathwick et al., 2002). This leads to positive perceptions regarding perceived usefulness of

ATM banking system.


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2.6. Perceived ease of use and behavioral intention to use ATM

Perceived ease of use of a particular system means a good system in the minds of the

customer, therefore he/she feels good about the system thus influencing the customers

behavioral intention to use it. Gong and Zu (2004) defines perceived ease of use as thedegree

to which a prospective user expects the target system to be free of effort. A system that is

perceived to be easy to use will automatically influence ones behaviour to use it (Succi and

Walter, 1999).

Extensive research over the past decade provides evidence of the significant effect of

perceived ease of use on usage intention, either directly or indirectly through its effect on

perceived usefulness (Agarwal and Prasad, 1999; Davis et al., 1989; Hu et al., 1999; Jackson

et al., 1997; Venkatesh, 1999, 2000; Venkatesh and Davis, 1996, 2000; Venkateshand

Morris, 2000). Moreover, Guriting and Ndubisi (2006) found that perceived ease of use had a

significant positive effect of behavioral intention to use online banking. In order to prevent

the under-used useful system problem, Internet banking systems need to be both easy to

learn and easy to use. Internet technologies that are easy to use are less threatening to the

individual (Moon and Kim, 2001).

Likewise, bank customers are likely to adopt online banking when it is easy to use (Guriting

and Ndubisi, 2006). The study conducted by Ramayah et al., (2003) found that perceived ease

of use has proven to have significant impact on intention to use internet banking. The result

corroborates the findings by Ramayah et al. (2002), Adams et al. (1992) and Davis et al.

(1989).

Considering predictors of ATM usage could serve a number of customers by helping them to

recognize how to promote that usage (Lederer, 2000). The TAM is based on Fishbeinand

Ajzens theory of reasoned action posits that an individuals attitude towards carrying out that

behaviour and an evaluation of the value of each of those outcomes influences behavioral

intention to use the system.


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In the TAM model, perceived ease of use positively affects perceived usefulness. Moreover,

perceived ease of use and perceived usefulness positively affect the attitude towards an

information system, and further, positively affect behavioral intention to use and accept of the

information system. Bandura, (1986) suggests that perceived ease of use plays an important

role in affecting motivation and behavioral intention to use a given system. The individuals

perceived ease of use to attain the standards they have been pursuing has an impact on

individual behavioral intention to use. Therefore, individuals may be more likely to undertake

behaviors they believe will result in valued out comes than those they see as having un

favorable consequences.

Its further believed that for any system put in place, perceived ease of use is an important

determinant of behavioral users intention of acceptance and usage behaviour. In addition to

that, a study by Clarke (2000) shows that, among the factors affecting the use of Automatic

Teller Machine banking system is a persons perceived ease of use thus in the end determines

ones behavioral intention to use. Technological Acceptance Model is believed to be the most

robust, parsimonious, and influential model in explaining systems adoption behaviour in a

way that perceived ease of use serves as a basis for attitudes towards using a particular

system, which in turn determines the intention to use, and then generates actual system use

behaviour.

Although many studies on perceived ease of use have received a fairly attention from

previous researches, there is no research that explores the factors influencing behavioral

intention to use ATM system. Furthermore, the TAM model was originally created toexamine

information system adoption in organizations. Considering Kelmans frame work, Davis et al.

(1986) social behaviour influences may affect behavioral intention indirectly via attitude due

to internalization and identification processes, or influence behavioral intention directly

through compliance.

The most effective tool to describe the relationship between perceived ease of use and

behavioral intention to use the system is Davis (1986). As this model explains usage

behaviour, it further states that beliefs influence attitudes, which further leads to intentions

and finally behavioral intention to use. TAM goes ahead to explain perceived ease of use as

the degree to which a person believes that using a particular system would be free from


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effort. Perceived ease of use is consistently in literature review as a significant factor in

Influencing behaviour intention to use that finally determines actual ATM system use.


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CHAPTER THREE

3.1 Introduction

This chapter is about the methodological research design that was used in the process of

conducting the research study. It specifically identified the processes of gathering, analyzing

of data that were used in the study. This chapter begins with the research design, which is a

description of the research approach. It also looks at the data collection tools that were used

in the course of the research. It also presents the data collection instruments that were used in

the process of data collection and methods that were used to maintain the validity of the

research and interpreting of data going to be used for the research. It also covered the area of

study, research designs, sampling strategy, population of the study of 0.775 and the methodsof data collection.

3.2 Area of Study

The study was held at the financial institutions in Kampala city, namely; Stanbic bank,

Centenary, Equity, Barclays, Standard Chartered, and Baroda among the other banks in

Kampala city. The study aimed at the users of the ATM system in the different banks.

3.3 Research Design

Kothari (2003) defined a research design as an arrangement of conditions for data collection

and analysis of data in a way that aims to combine relevance with the research purpose. Its a

conceptual structure within which research is conducted. Bell (1997), notes that the research

design outlines the basis for making interpretation of data and establishes the format for

detailed steps to follow when conducting the study. It is the plan which shows how data will

be collected and analyzed. The researcher used a descriptive design which helped her to

evaluate ATM usage in Uganda, organize, describe and explain the detailed findings in the

research. The term descriptive research refers to the type of research question, design, and

data analysis that will be applied to a given topic. The type of question asked by the

researcher ultimately determines the type of approach necessary to complete an accurate

assessment of the topic at hand.


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3.4 Target Population

Kombo (2002) defines population as a group of individuals or items which are taken for

measurement. The research targeted 40 ATM holders from the different banks in Kampala as

they were directly linked to the study. They included students, unemployed, employed, and

self-employed ATM holders.

3.5 Sampling Method / Sampling Size

Enron (1998) defines sampling as a deliberate process of selecting apart of population for

study with the intention of generalizing the findings to the whole population. Purposive

sampling was used to collect data from only ATM holders and users. Patton (1990) says that

logic and power lying selecting rich cases for depth study.

The sample size consisted of 31 respondents from the population of over 10,000 ATM

holders. (13 employed 9 self-employed, 2 unemployed and 7 students).

3.6 Data Collection Methods

The researcher used various methods to collect both primary and secondary data for the

study. As such primary data was collected through the use of questionnaires, Interview and

Observation methods and secondary data was collected through the use of Document analysis

method. Under this method both published and grey literature materials such as research

papers, journals and internet resources and related sources was reviewed as explained below.

The methods are as follows;

3.6.2 Questionnaire

According to Mbaaga (2000:25), questionnaires are defined as a set of related questions

designed to collect information from respondents on an intended topic. These maybe

structured or unstructured, or the researcher can decide to use them both. Questionnaires need

factual answers that call for facts as well as for explanation about the usage of the ATM

system. Questionnaires were distributed to employed staff, unemployed, self-employed and

students in the different banks in Kampala.The structure of the questionnaire had a linear

scale of Strongly Agree (5), Agree (4), not sure (3), Disagree (2) and Strongly Disagree (1).


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3.6.3 Observation

Observation can be defined as a purposeful examination of research phenomenon for

purposes of gathering data. It involves the use of sensory organs to make sense of the study

phenomenon. It allows one to collect data in a purposeful and systematic way about the

behavior of an individual or a group of people at a specific time or place.

3.7 Data Collection Instruments

Several research instruments were constructed to aid the researcher to collect data

3.7.1 Questionnaire guide

The questionnaire is the most widely used technique in data collection. It consists of written

questions to which the respondent responds to in writing (Busher and Hunter, 1980). The

guide was used to find out the users perceived usefulness and perceived ease of use, of the

ATM system. (See Appendix )

3.7.2 Observation guide

It constituted several guidelines which the researcher used to assist herself in observing all

the details concerning the research. The researcher used her naked eyes to examine the

phenomena and hence recorded the findings accordingly.

3.8 Research Procedure

A research procedure refers to a particular course of action intended to achieve a research

result. Bell (1997), states that whatever procedure for collecting data is selected, it should

always be examined critically to assess what extent it is likely to be reliable and valid. An

introductory letter from UCU, Faculty of Business and Administration, was obtained to

authorize the researcher to conduct research at the different financial institutions (banks). The

researcher re- tested the instruments to see if they can collect the right information before a

full scale data collection exercise was embarked on.


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3.9 Data Analysis and Presentation

Data analysis is the process which involves the way data will be presented, coded and

collected in an understandable, systematic and clear way. All data collected was edited to

ensure accuracy and consistency. It involved preparation of the collected data into useful,

clear and comprehensive information. It was based on the researchers objectives and

questions the data was presented in form of explanatory notes. The researcher used SPSS data

analysis software to analyze quantitative data.

3.10 Ethical Considerations

Mbaaga (2000) considers ethical considerations as explanations of how the study will be

conducted according to the accepted norms and regulations of the discipline of the researcher.The information taken from the respondents was strictly confidential and it was used only for

purposes of this research. The researcher got permission from the respondents before writing

down what they had mentioned. The research was also strictly for educational purposes.

3.11 Limitation of the Study

The researcher faced one limitation;

The time constraint: the researcher was limited by the time as well as the respondents delay in

filling out the questionnaires however this did not prevent the study from being carried out.

In this chapter, the researcher discussed the area of study, the research design, the target

population, the sampling method, the data collection methods and instruments, data analysis

and presentation and the ethical considerations.


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CHAPTER FOUR

Response rate of the study;

The study had a response rate of 0.775. This was a combination of both male and female,

working class and the unemployed in Uganda. And this consisted of respondents between the

ages of 20years and above.

4.1 Back ground data of the Respondents

The study analyzed the back ground composition of respondents. The back ground

composition included, age, sex, marital status, education level, employment status, how long

one owned an ATM, type of account held and the type of bank one went to for his/her

transactions.


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Table 1-4: Back Ground Research Data

VARIABLE FREQUENCY PERCENTAGE (%)

Age 20-29

30-39

40 and above

21

5

5

67.7

16.1

16.1

Sex Female

Male

16

15

51.6

48.4

Marital status Married

Not married

12

18

38.7

58.1

Educational level Secondary

UniversityTertiary

Others

4

195

3

12.9

61.316.1

9.7

Employment status Employed

Self-employed

Un employed

Student

13

9

2

7

41.9

29.0

6.5

22.6

How long have you owned

your ATM

1 year

2 years

3 years

4yrs and above

2

8

4

17

6.5

25.8

12.9

54.8

Type of account held Current

Saving

Fixed

Others

5

20

5

1

16.1

64.5

16.1

3.2

Where do you carry outyour transactions

CentenaryStanbic

Equity

Barclays

Standard chartered

Others

510

3

5

3

5

16.132.3

9.7

16.1

9.7

16.1

Source: primary data

The study revealed that majority of the respondents where in the age bracket of 20-29 years-

67.7%, of these 51.6% were female and 48.4% male and 58.1% were not married.Furthermore educational level, employment status, access to ATM, account and where the


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transactions are made (banks), was evaluated and the findings were as following 61.3%,

41.9%, 54.8%, 64.5% and 32.3% respectively.This indicated that majority of the respondents

are youths who are determine in pursuing their careers rather than getting married.

4.2. Response on Perceived Usefulness of the Auto Teller Machines (ATM)

The table 2-4, below shows how the respondents perceived the usefulness of Auto Teller

Machine (ATM) system/ technology in their day to day life.

Table 4-2: Perceived Usefulness of Auto Teller Machines (ATM)

Variables SD f (%) D f (%) NS f (%) A f (%) SA f (%) Mean St.D

ATM enables me to utilize banking services more quickly 0 0 2(6.5) 7(22.6) 22(71.0) 4.65 .608

ATM enables you to bank or withdraw money manytimes as one wishes

0 5(16.1) 4(12.9) 11(35.5) 11(35.5) 3.90 1.076

ATM has reduced the burden one encounters in the bank 1(3.2) 0 1(3.2) 9(29.0) 20(64.5) 4.52 .851

ATM is rigid and inflexible to interact with 11(35.5) 7(22.6) 4(12.9) 5(16.1) 4(12.9) 2.48 1.458

Using ATM is better than going to the counter 0 1(3.2) 3(9.7) 9(29.0) 18(58.1) 4.42 .807

ATM simplifies life and the way of doing business 1(3.2) 1(3.2) 3(9.7) 11(35.5) 15(48.4) 4.23 .990

ATM offers freedom, flexibility and convenience in the

time of banking

2(6.5) 2(6.5) 2(6.5) 10(32.3) 15(48.4) 4.10 1.193

ATM provides reliable security controls I need 1(3.2) 5(16.1) 5(16.1) 12(38.7) 8(25.8) 3.68 1.137

ATM enables me save money 6(19.4) 9(29.0) 3(9.7) 6(19.4) 7(22.6) 2.97 1.494

Source: Primary data

From table 4-2 above, the study revealed that, most respondents acknowledged the

importance of technology (ATM) and how it has influenced service delivery or interface with

the bank (Mean=4.65; StD=0.68, Mean=4.52;StD=0.85, Mean=4.42;StD=0.807; Mean=4.23,

StD=0.990, Mean=4.10, StD=1.193; and Mean=3.90, StD=1.076). However there was

concern on the flexibility of ATM services offered by the bank. Such flexibility were in terms

Money deposits, money savings (Mean=2.48; StD=1.458; Mean=2.97, StD=1.494). Due tothis itspossible that this could be the probable course of long queues in the bank.

4.3. Perceived Ease of Use of Auto Teller Machine (ATM)

The table 4-3 below represented the composition of the different responses from the

respondents on how ease it was for them to interact with the ATM system in their banks. This

was guided by the structured questions that are found in the table 4-3 below.


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Table 4-3: Perceived Ease of Use of Auto Teller Machines (ATM)

Variables SD f (%) D f (%) NS f (%) A f (%) SA f (%) Mean St.D

Its easy to use an ATM 1(3.2) 0 2(6.5) 6(19.4) 22(71.0) 4.58 .765

You never feel nervous when using an ATM 5(16.1) 3(9.7) 3(9.7) 12(38.7) 8(25.8) 3.48 1.411

Using ATM does not require a lot of training 2(6.5) 1(3.2) 1(3.2) 12(38.7) 15(48.4) 4.19 1.108

ATM is easy to use even by people without prior computer

knowledge

4(12.9) 1(3.2) 2(6.5) 14(45.2) 10(32.3) 3.81 1.302

ATM is user friendly 0 0 2(6.5) 15(48.4) 14(45.2) 4.39 .615

ATM enables my ability to bank 1(3.2) 2(6.5) 1(3.2) 15(48.5) 12(38.7) 4.13 .991

ATM enables me to access all my accounts in the bank 1(3.2%) 2(6.5) 5(16.1) 10(32.3) 13(41.9) 4.03 1.080

ATM enables me do transactions anywhere around the

country

2(6.5%) 0 2(6.5) 5(16.1) 22(71.0) 4.45 1.091

I find it easy to do what I want with an ATM 1(3.2) 2(6.5) 7(22.6) 11(35.5) 10(32.3) 3.87 1.056

My interaction with ATM is clear and understandable 0 0 1(3.2) 14(45.2) 16(51.6) 4.48 .570


The study further evaluated the ease of use of ATM services to the respondents. The findings

shown in table 4-3above revealed that the respondents agreed to the friendly nature of the

Auto Teller Machine (ATM) because of its clear and understandable instructions and how

easy it was to use it since it didntrequire a lot of training . (Mean=4.58; StD=0.765;

Mean=4.48; StD=0.570; Mean=4.45; StD=1.091; Mean=4.39; StD=0.615; Mean=4.19;

StD=1.108).This revealed that all the respondents found it easy to interact or operate the

ATM since majority of the respondents were youths (20-29 Yrs.).

4.4. Behavioral Intention to Use Auto Teller Machines (ATMs)

The table 4-4 below, represented the data of the respondents on their intention to use an Auto

Teller Machine (ATM) that is what their motivation to use the new technology was.


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Table 4-4: Behavioral Intention to Use Auto Teller Machines (ATMs)

Variables SD f (%) D f (%) NS f(%) A f (%) SA f (%) Mean St.D

I intend to use ATM more frequently for all money

deposits

3(9.7) 5(16.1) 8(25.8) 10(32.3) 5(16.1) 3.29 1.216

I intend to use ATM only if there is a long queue in the

banking hall

8(25.8) 9(29.0) 7(22.6) 2(6.5) 5(16.1) 2.58 1.385

I intend to use ATM to access all my bank accounts 2(6.5) 3(9.7) 2(6.5) 10(32.3) 14(45.2) 4.00 1.238

I intend to use ATM for cheque deposits only 13(41.9) 10(32.3) 3(9.7) 4(12.9) 1(3.2) 2.03 1.169

The reason I prefer to use ATM is because the bank

encouraged me to do so

11(35.5) 7(22.6) 4(12.9) 6(19.4) 3(9.7) 2.45 1.410

I intend to use ATM because I feel sense of

personal ownership

3(9.7) 0 4(12.9) 10(32.3) 14(45.2) 4.03 1.224

I intend to use ATM because my colleagues talk up the

issue as a great use

14(45.2) 8(25.8) 3(9.7) 5(16.1) 1(3.2) 2.06 1.237

Unless am rewarded for using ATM in same way I seeno reason to spend extra effort in using it

21(67.7) 7(22.6) 1(3.2) 2(6.5) 0 1.48 .851


The research analyzed the composition of the different respondents and revealed that majority

of the respondents intended to use the ATM service because they felt the sense of personal

ownership and to access all their bank accounts (mean=4.03; stD=1.224;

mean=4.00;stD=1.238). However other respondents declined to them using the technology

because of their colleagues talking it up to be of great use, being rewarded for using it and

only if there was a long queue in the banking hall,(mean=1.48;stD=0.851;

mean=2.06;stD=1.237;mean=2.58;stD=1.385). Furthermore the respondents declined to use

the ATM service for all money deposits (mean=3.29;stD=1.216). This indicated the

likelihood of the banking hall being congested since people would prefer lining up in the

banks then use ATMs.


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4.5. Bank Policy implication on Auto Teller Machine (ATM)Usage

This table represents the banks policy on how to use an ATM. These policies may include;

the maximum amount to be withdrawn, policy on how to change pin and replace the lost card

Table 4-5: Bank Policy on ATM Usage

Variables SD f (%) D f

(%)

NS f (%) A f (%) SA f (%) Mean St.D

I know my banks policy on how to use an ATM 0 0 0 13(41.9) 18(58.1) 4.58 .502

I know the maximum amount of money that I have

to withdraw from my account when using an ATM

0 0 1(3.2) 12(38.7) 18(58.1) 4.55 .568

Its very easy for me to change my pin code 4(12.9) 3(9.7) 5(16.1) 8(25.8) 11(35.5) 3.61 1.407

Its fast for me to replace my ATM in my bank 6(19.4) 8(25.8) 3(9.7) 4(12.9) 10(32.3) 3.13 1.586

I love my banks policy 2(6.5) 0 5(16.1) 12(38.7) 12(38.7) 4.03 1.080


Table 4-5 revealed that the respondents knew their banks policy on how to use a the

technology, the maximum amount to be withdrawn and they loved their bank policy

(Mean=4.58;St.D=0.502; Mean=4.55;stD=0.568;Mean=4,03;St.D=1.080). However the

policy on the replacement of the ATM card (Mean=3.13;St.D=1.586) indicated the probable

cause for congestion in the banks since it take quite long for one to replace his/her ATM card

once lost.

4.6.Assessing the level of Internet Accessibility

The table 4-6,analyzed the opinions of the different respondents on the accessibility of

internet in the ATM system of their banks.

Table 4-6: Internet Accessibility

Variables SD f (%) D f (%) NS f

(%)

A f (%) SA f

(%)

Mean St.D

I find it easy to access internet all the time 7(22.6) 5(16.1) 4(12.9) 6(19.4) 9(29.0) 3.16 1.573

My banks internet is very fast via the ATM point 5(16.1) 4(12.9) 6(19.4) 8(25.8) 8(25.8) 3.32 1.423

The ATM of my bank does not use internet 17(54.8) 5(16.1) 6(19.4) 2(6.5) 1(3.2) 1.87 1.147

The ATM of my bank is always down in my area of

residence

13(41.9) 7(22.6) 3(9.7) 8(25.8) 0 2.19 1.250

Its difficult to access internet in my area 12(38.7) 8(25.8) 3(9.7) 6(19.4) 2(6.5) 2.29 1.346



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Table 4-6 evaluated that the respondents declined to the ATM of their bank not using

internet, the system being down all the type and the difficulty to access internet in their areas

(Mean=2.29;St.D=1.346;Mean=2.19;St.D=1.250;Mean=1.87;St.D=1.147). However

respondents had augments on how fast the internet was via the ATM, finding it easy to access

internet all the time (Mean=3.16; St.D=1.573; Mean=3.32; St.D=1.423). This indicates the

likelihood of congestion in the banking hall.


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CHAPTER FIVE

DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS;

5.0 INTRODUCTION

This chapter presents the discussions of the major research findings presented in chapter four,

which are guided by the research questions. It also presents conclusions, recommendations

and suggested areas for further research.

5.1 DISCUSSION OF THE FINDINGS

The findings of the study indicated that majority of the respondents are youths (67.7%), of

which 22.6% are students. This showed their great use of the ATM (Auto Teller Machine)

since they use it most for banking their school fees and tuition in their respective banks,

32.2% of the transactions being in stanbic bank.

The study further more revealed that 41.9% were the employed youth at university level; this

showed how the youth are more flexible to technology compared to the other age groups.

This is probably due to the curiosity among the youth to adventure on whatsalways new in

the market.

In addition to the above, the employed youth use the ATMs for business transactions, paying

of the utility bills due to them since the ATM is quick and fast at withdrawing the money.

This revealed that the youth believed in the usefulness of the ATM since it offers freedom,

flexibility and convenience in the time of banking (Mean=4.10; St. D=1.193), and has also

reduced the burden they encounter in the banking hall (Mean=4.52; St. D=0.851).

This implies that the more the bank ensures that customers perceive the system is applicable,

flexible and interactive; the more customers behavioral intentions to use will change by

identification, internalization and compliance.

These revelations further confirm studies by Pikkarainen, et al; (2004) which support the

view that stressing a perceived usefulness leads to behavioral intention improvements. The

managerial implication of these findings seem clear, the changes of behavioral intentions of

customers can be enhanced through the adoption of particular system that the customers are

willing to use for the transactions. Another study by Tan and Teo (2000) indicates that


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perceived usefulness is an important factor in determining the adoption of innovations. As

observed by BhattaCherje (2002), a persons willingness to transact with a particular system

is already considered as perceived usefulness. It shows that user behaviour is determined by

perceptions of usefulness of the technology (Admans et al; 1992).

Findings that customers perceived ease of use of the system, that is, its easy to use an Auto

Teller Machine (Mean=4.58; St. D=0.765) and Auto Teller Machine (ATM) being user

friendly (Mean=4.39; St. D=0.615) is essential for long-term growth of banks.

This findings concurs with the study conducted by Davis et al ;( 1989) which showed that

Perceived Ease of Use (PEOU) of the firms system which affects its long-term viability and

Perceived Usefulness. Results from previous research also revealed the significant effect of

Perceived Ease of Use on Perceived Usefulness (KleiJnen et al; 2004; Wang et al; 2003;

Davis et al; 1989).

Huang ,J.Linn Y; and Chaung S. (2006) posits that to particular behavioral beliefs, Perceived

Usefulness (PU) and Perceived Ease of Use (PEOU), are two fundamental factors for

predicting use, acceptance, and the effect of external variables on intentio

asere sandra

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