Perceived Barriers Towards Adoption Of Internet Banking Among Non-Metropolitan Internet Users Of Pakistan

Abstract

Internet banking is a vital component of E-banking flourished rapidly in developed countries unlike developing countries. This paper provides recommendations for the banks offering internet services after examining the barriers in adoption of internet banking perceived by the active internet users living in non-metropolitan areas of Pakistan. Various, significantly perceived barriers identified by previous studies are presented after an extensive literature review in order to form a basis for developing questionnaire and comparing the findings. Data were collected from 520 customers of the banks offering internet services. The respondent’s selection criteria was being active internet user and living in non-metropolitan area of Pakistan. Findings show that the loss of personal service and one to one relationship with bankers, low perceived value of internet banking as compared to traditional banking and lack of knowledge, information are perceived to be the most significant barriers in adoption of internet banking among respondents. Unlike other studies lack of security, risk of hacking, fear of incomplete transactions and high financial risks are perceived to be moderately significant barriers. The study recommends that the banks should identify the information needs of the customers and establish the effective information channels to communicate the benefits and uses of internet banking services and develop long term relationship.