Law Research paper, UM, Malaysia What is the relationship between perceived easiness and excessive spending behavior among young adult by using e-wallet payment method

University Universiti Malaya (UM)
Subject Law


The purpose of this study is to investigate factors influencing excessive spending behavior among young adult by using e-wallet payment method. The digital economy has altered the way individuals conduct business and live their live. The global trend toward attaining a cashless society is cashless transaction via electronic media. However, the long-term viability of the mobile e-wallet user is in doubt.

There is no guarantee that these new mobile e-wallet users will continue to utilize mobile e-wallet payment when the incentives have run out or the pandemic has passed. Thus, this research is to discover Malaysian consumers’ true intention for signing up for an e-wallet and to identify the factor that influence young adult excessive spending behavior. Hence, this research has 80 questionnaires had been gathered from the young adult by convenience sampling method. Besides that, the quantitative data analysis will performed via SPSS program to test the hypothesis of the research and data collected will be analyzed by using SPSS software to description analysis, correlation analysis and multiple regression analysis.

Abstrak (BM)

Tujuan kajian ini adalah untuk menyiasat faktor-faktor yang mempengaruhi tingkah laku penggunaan berlebihan golongan muda menggunakan kaedah pembayaran e-dompet. Ekonomi digital telah mengubah cara individu menjalankan perniagaan dan hidup. Trend global ke arah masyarakat tanpa tunai ialah transaksi tanpa tunai melalui media elektronik. Walau bagaimanapun, daya maju jangka panjang pengguna e-dompet mudah alih boleh dipersoalkan. Tiada jaminan bahawa pengguna dompet mudah alih baharu ini akan terus membayar dengan dompet mudah alih selepas insentif habis atau wabak berlalu.

Oleh itu, kajian ini bertujuan untuk mengetahui niat sebenar pengguna Malaysia untuk mendaftar untuk e-dompet dan mengenal pasti faktor yang mempengaruhi tingkah laku berbelanja berlebihan golongan muda. Oleh itu, kajian ini mengumpul 80 soal selidik daripada golongan dewasa muda dengan kaedah persampelan mudah. Selain itu, analisis data kuantitatif akan dilakukan oleh program SPSS untuk menguji hipotesis kajian, dan analisis deskriptif, analisis korelasi dan analisis regresi berganda akan dilakukan ke atas data yang dikumpul menggunakan perisian SPSS.

  • Introduction

This initial chapter of the study includes background of the study, problem statement, research question, research objective, significance of the study, scope of the study.

  • Background of the study

Smartphone is a cell phones that allows us to touch screen, browse via internet and run software program as the computer or laptop. The development of smartphone had change the world today. There are broad range of task or activities that able perform by smart phones such as E-wallet. E-wallet is a payment app of purchase goods, services, make safe transaction without the physical money by scanning a QR code and it’s tremendously used in worldwide. E-wallet is very popular among the youngers and the tech savvy users.

By comparing the age range, young adult is the most active E-wallet user. According to the survey of Oppotus (2020) in below Figure 1.1, there is 71% of Young adult used the E-wallet in Q32020. It is because young adult is the generation that they growth up together with technology since beginning of their live and they are ready to adopt the new technology such as the E-wallet. Thus, young adult is the important customer segment to E-wallet.

To align with Malaysia Vision, which is to build up the cashless society, there are a few programme promotes by government among the Malaysian Youth during Covid 19 pandemic such as eBelia programme. This programme is to moderate the financial burden of Malaysian Youths age within 18 to 20 Years old and full time students by providing them RM 150 E-wallet credit from Touch n Go E-wallet, ShopeePay, BigPay and Boost (The Star, 2021). Therefore, E-wallet have bring a significant change during the Covid 19 pandemic. E-wallet usage statistic in Malaysia from year 2018 to 2021 shown in Figure 1.2.

According to the Figure 1.2, it shown the Malaysians used e-wallet in last 3 months. In 1Q20, e-wallet usage impale to 62% due to the government introduce Movement Control Order (MCO) 1.0, where is the outbreak of pandemic that lead to speed up in e-wallet adoption in Malaysia. To achieve Malaysia vision of building cashless society, Malaysian government take initiative to encourage e-wallet usage by provide incentive RM30 and RM50 during the first and second half of year 2020 (Ong, 2020).

Thus, Digital wallet such as BOOST, Grabpay and Touch n Go was encourage during covid-19 pandemic period through via e-Tunai Rakyat Campaign to claim the RM 30 offered by Malaysian Government. In 2Q20, the usage of e-wallet slightly dwindled to 49% but increase again in 3Q20 to 60% due to campaign of E-Penjana. For this campaign E-Penjana, it only offered to individuals who is qualified by verified accounts an additional RM50 of e-wallet credit. There is slightly decrease in 4Q20 to 56% for usage of e-wallet due to another lockdown with reason rising the Covid 19 cases. Thus, it cause the consumer-spending cut down.

According to the survey of Oppotus (2020) in above Figure 1.2, it shown that the usage of e-wallet in 1Q21, it increase back to 67% due to confidence of consumer has restore its highest point in the past two years due to Malaysian’s optimism about the future as well as the launch the programme of National Vaccination. At this point, the high usage of e-wallet reflects an improvement in the financial situation of Malaysians who are also spending more than in the past year. Hence, the usage of e-wallet in 2Q21 was impact by Enhanced Movement Control Order (EMCO) and Movement Control Order 3.0 (MCO 3.0). It is because of Standard Operating Procedures (SOPs) are more stringent compared to other MCOs as the cases in Malaysia reaches alarming highs in Malaysia.

Malaysian quickly lost the confidence they show in 1Q21 due to the daily cases of Covid 19 reached to the 5 digits, so Malaysians forced to be cautions about their spending and stay at home. In 3Q21, Malaysia entered into Phase 4 of the National Recovery Plan. Malaysia fully reopened population of Malaysian ready to go out and support living in the era of the “new normal”. Thus, the usage of e-wallet once again rising rapidly to 67% due to consumer confidence has grown.

According to Figure 1.3, it shown the Mobile payment among the e-wallet, Boost, Grabpay, Maybank pay and bigpay (Fintech Malaysia,2021). Among the 4 mobile payment, the number of players in e-wallet is the top higher which is over 15 millions. The second higher of the number of player among 4 mobile payments is the Boost, the next us the Maybank pay which is 1.9 million player and the last is bigpay which is 1.4 million among the 4 mobile payments.

However, E-wallet are gaining more prestige in Malaysia especially during period Covid 19 pandemic. Previous researcher mostly focus on topic of payment via digital wallet among customers regarding spread (Humbani and Wiese, 2018) activities related to crime which included account take over inveracious transactions, theft and breach data (Marria, 2018) and E-wallet adoption and readiness (Singh and Sinha, 2020).

There is also have the research regarding the payment of credit card encourage the user to expend more (Trinh et al., 2020). But, there is limited study of how e-wallet can affect excessive spending behavior among young adults. Thus, this study will explore the factors influencing excessive spending behavior among young adult by using e-wallet payment method to fill up the gap.

  • Problem Statement

 E-wallet make the young adults suffer from “illusion of liquidity”, a false assumption of having liquid money which encourage excessive spending (Soman, 1999).

It is because E-wallet is the less transparent mode payment and able tie together with the credit card, the actual cost transaction is blurred, so consumers have relatively not experienced the pain of payment (Raghubir and Srivastava, 2008). However, Liu and Dewitte (2021) stated that an obvious difference between the cash versus E-wallet payment mode and spending amount. It is because E-wallet is convenience and efficiency as it can make payment via the smartphones. Therefore, it will influence the young adult excess spending.

Excessive spending via E-wallet which tie together with credit card may cause many issue such as high debt, bankruptcy and lower the living standard. However, our Financial Miniters stated money issue might cause to the social issues such as theft, engaging in gangsterism, selling drugs and even suicide (Kurukullam, 2019). Therefore, young adult spending behavior is playing an important role in a nation.

Spending behaviour of young adult via E-wallet and tie together with credit card leads to increase in bankruptcy and social issue among younger generation in Malaysia which are always related with their financial ability (, 2018).

It is because they are lack of financial knowledge which caused by their poor financial management. Thus, it cause them on excessive spending, risk of bankruptcy, debt and financial crisis. (Bidwell, 2015). For instance, the poor financial planning has led to 85000 Malaysians below age 25 were declaring bankruptcy between 2015 and 2019 due to over spend and unable pay back (Sinaran Harian, 2021).

According Liew Vui Keong who is to minister of Prime Minister’s Department, there were 13,036 cases in 2013, 13,098 cases in 2014, 11,277 in 2015, 11,875 in 2016, and 11,106 in 2017 were reported bankruptcy (Carvalho et al., 2018). However, Bank Negara Malaysia (BNM) Assistant Governor who is Nazrul Hisyam Mohd Noh stated for year 2018, there have 47% of young adult have high credit card debt (New Straits Times, 2021). It is because they unable to sustain debt made of installment purchases, personal load and credit card debt from the root cause of lacking financing knowledge leads them to a huge amount for bankruptcy.

In addition, the bankruptcy issue among the young adult view by government as a serious issue as not only impact to individual but also loss to the country. The young adult spend without considering the financial ability of themselves and spend the money on some luxury goods to satisfy their own demand such as gold.

This leads to the issue of increasing burden of debt. For example, fresh graduate student have started pay their PTPTN once graduate and this leads to increased debt loads as they may not have enough knowledge to manage their credit well and cause financial problems.

Agensi Kaunseling Dan Pengurusan Kredit (AKPK) pointed out that in the last six months of 2014, 18% of fresh graduates in Malaysia were overspending and had no savings. It also highlighted that 28% of 3,540 people between the ages of 20 need to borrow money from the AKPK survey to buy essentials (Ram, 2018). This because the young adult nowadays do not have enough of self-control on financial management that leads to overspending.

  • Research Questions

 Based on the problem statement, the research questions as below:

RQ 1: What is the relationship between perceived easiness and excessive spending behavior among young adult by using e-wallet payment method ?

RQ 2: What is the relationship between promotional discount and excessive spending behavior among young adult by using e-wallet payment method ?

RQ 3: What is the relationship between self-control and excessive spending behavior among young adult by using e-wallet payment method ?

  • Research Objectives

Based on the research question, the specific objectives of this study as below:

RQ 1: To examine the relationship between perceived easiness and excessive spending behavior among young adult by using e-wallet payment method

RQ 2: To examine the relationship between promotional discounts and excessive spending behavior among young adult by using e-wallet payment method

RQ 3: To examine the relationship between self-control and excessive spending behavior among young adult by using e-wallet payment method

  • Significance of the study

This study will able to explore the factors influencing excessive spending behavior among young adult by using e-wallet payment method. This study will bring valuable to E-wallet user. It is because the result can help them to identify the effect of E-wallet bring on the users, and there after either change or shape the user’s attitude toward the E-wallet.

In addition, this study also may create valuable reference to the researchers. It is because they can have the better understanding about the factors influencing excessive spending behavior among young adult by using e-wallet payment method.

Lastly, this study also create valuable to the Malaysian. It is because this study is focus at Malaysia and respondents from Malaysia only and the result will contribute to the existing domain of digital and mobile payment system in Malaysia.

  • Scope of the study

The scope of this study is only covered young adult that is age range from 18 to 25 year old in Malaysia (A. Rae Simpson, 2018). Young adult that is age range from 18 to 25 year old will be choose in this study because there is limited researcher to focus on E-wallet usage affect various type of users in Malaysia which can be categorized according to the age, genders and income level of users. Besides that, this study is only covered in Malaysia. So, all the respondents are Malaysian. In addition, the scope only limited to three independent variable which influence exceed spending behavior among young adult by using e-wallet payment method that are perceived easiness, promotional discounts and self-control. It is because these independent variable was used in the study of payment of credit card encourage their users to spend more (Trinh et al., 2020) and there is limited study explore in these three variables for E-wallet. However, others variables may influence the exceed spending behavior among young adult by used e-wallet payment method are not considered in this study.

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