THE IMPACT OF E-PAYMENT SYSTEM ON CUSTOMER SATISFACTION OF THE
SELECTED STUDENTS IN SECTARIAN SCHOOLS IN DAVAO CITY
: BASIS FOR AN ACTION PLAN
A Business Research Paper
Presented to the
Faculty of College Accountancy, Business and Education
University of the Immaculate Conception
In Partial Fulfillment of the
Requirement for
RES12B
Ibañez, Jolina
Indino, Kariel A.
Ingente, Charmaine
Llena, Rhone Mar M.
Magallon, Faye Elaine T.
May 2021
Chapter 1
Introduction
Background of the Study
Providing customer satisfaction is always becoming the focused of every
organization (Amin et al., 2017) but meeting the customer in the 21 st century with
various demand and yet knowledgeable is far too challenging (Muhammad et al.,
2016). If a customer does not satisfied with the products or services, they will easily
switch to other brands and it gives an advantage to other brands to stand out in
the market competition (Hassan et al., 2019). Hassan et al. (2019) also reported that
customer normally will tend to behave like what others customer do, it could be both
positive and negative behaviour. The negative behaviour as they see among their close
family members and friends not keen of a product, as a result they will have the
tendency not to purchase and consume that product (Razak & Shamsudin, 2019).
Customer satisfaction is one of the high affecting factors on any product or
service, which is important because it provides marketers and business owners with a
guide to manage and improve their businesses (Beard, 2014). Customer satisfaction
will help a lot the business to stand out of the competition (Hasim et al., 2018).
Delivering superior customer value and satisfaction is crucial to firm competitiveness
(Deng et al. 2013). Chui et al. (2011) reported that the findings of Customer Satisfaction
Index (CSI) studies can serve as predictors of a company’s profitability and market
value. Moreover, several reviews by past researchers stated that customer’s satisfaction
affect the organization such as satisfied customers will buy more (Davras & Caber,
2019; Gerdt et al., 2019); satisfied customers are loyal as they trust the organization
(Hasim, Shamsudin, Ali, & Shabi, 2018); they are willing to pay more or paying in
premium as they are satisfied (Shamsudin, Ali, Wahid, & Saidun, 2019); they help to
gain more clients by recommending the company’s product of good and services
towards their family and friends (Shamsudin & Razali, 2015).
The previous studies revealed that there is a relationship between e-Payment
System and customer satisfaction. According to Chavosh et al., (2011) e-payment as a
fast, convenience and modern means of doing bank transactions can be utilized by
banks in order to facilitate payment procedures and consequently increase customers’
satisfaction. Investigating customers’ satisfaction with electronic payment systems is of
great importance to bank managers in order to improve their systems and services and
adapt them with their customers’ needs. Furthermore, a wide spectrum of financial
services is provided by banks through the internet and banks have initiated an intense
competition in being equipped with up to-date e-payment systems to provide their
customers with better service and improve their satiation (Roozbahani, Hojjati & Azad,
2015).
Most of the research conducted regarding e-Payment System were focused on
the analysis of adoption and satisfaction. The intensive review of the literature reveals
the increasing usage of e-Payment System, that is continuously being embraced and
adopted in the financial system of schools with a view to simplify and ease payments in
business transactions. Also, many scholars have studied electronic payments and
customer satisfaction in a wide range, but they have paid little attention to its impact on
customer satisfaction in single coverage in the sectarian schools sector. Therefore, the
researchers intend to know the impact of e-Payment System on customer satisfaction of
the selected students in sectarian schools in Davao City.
This study aims to address the impact of e-Payment System on customer
satisfaction of the selected students in sectarian schools in Davao City. This study is a
basis for an action plan that would help in assessing the selected respondents in
sectarian schools in connection with their perception and satisfaction using the ePayment System. The researchers plan to disseminate the copies of this study to the
selected students in sectarian schools in Davao City who participated and to the library
of the University of the Immaculate Conception. In addition, the researchers will present
this study in research congresses both national and international after this study is
being accomplished, since the findings will be in use if disseminated. Lastly, these
visions and the completion of this study within the school year 2020-2021 will be carried
out through the help of Researchers’ Professor.
Statement of the Problem:
1. What is the status of e-Payment System on Customer Satisfaction of the
Selected Students of the Sectarian Schools in Davao City?
2. What is the status of Customer Satisfaction in terms of the Selected Students of
the Sectarian Schools in Davao City?
3. Is there a significant relationship between e-Payment System and Customer
Satisfaction?
4. Based on the findings of the study, what action plan can be proposed?
Review of Related Literature
This chapter will review the relevant literature on E-payment system and
costumer’s satisfaction reviewed by the researchers from various sources such as web
articles, journals, studies, and books.
Electronic Payment System
An E-payment system is a way of making transactions or paying for goods and
services through an electronic medium without the use of a check or cash (WrobelKonior, 2016). E-payments have become progressively popular because of the use of
online banking and shopping services (Square, 2017). Furthermore, Israni (2018) stated
that electronic payment has revolutionized business processing by reducing paperwork,
transaction costs, and labor cost. Being user-friendly and less time-consuming than
manual
processing,
helps
business
organizations
to
expand
their
market
reach/expansion.
As the world advance more on technology development, a lot of electronic
payment systems and payment processing devices have been developed to increase,
improve, and provide secure e-payment transactions while decreasing the percentage
of check and cash transaction. (Wrobel-Konior, 2016). According to Hord, (n.d.) an
electronic payment is any kind of non-cash payment that does not involve a paper
check. Methods of electronic payments include credit cards, debit cards, and the
ACH (Automated Clearing House) network. The ACH system comprises direct deposit,
direct debit, and electronic checks (e-checks).
According to DPO (2017), using online payments is far more convenient for both
students and parents paying school fees. Adding on, as schools embrace alternative
learning methods, with cashless payment solutions online and in-school, providing
students a safe and convenient way to pay for enrollment fees and other educational
expenses (NewsbytePH, 2020).
Furthermore, Major learning institutions such as the Ateneo De Davao
University (ADDU), Don Bosco Technical Institute of Makati Inc. (DBTI-MAKATI),
Nord Anglia International School Manila (NAIS Manila), Malayan Colleges Mindanao
(MCM), University of Immaculate Conception (UIC), La Salle Green Hills, among
others are beginning to adopt PayMaya’s end-to-end digital payment solutions such
as the PayMaya’s Online payment gateway for their online channels and the One by
PayMaya Point of Sale (POS) device for school cashiers (Hilario, 2020).
Hilario (2020) believes that cashless payment solutions play a critical role in the
schools’ shift to blended learning while at the same time helping keep school personnel
safe by eliminating risks of cash handling in light of the current public health situation.
Customer Satisfaction
The rendering of the expected value in the competitive business sphere in the
concentration of quality of service is an important element for business success, and
experts concur that the most powerful competitive tool currently reshaping marketing
and business strategy is service quality (Eraghi & Atharinejad, 2012). Customer
satisfaction is the key to creating a long-term relationship with your customers. If you
think back to the dating analogy, going through the sales process is just like wooing
your prospect to turn them into a customer (Chambers, 2020).
Customer Satisfaction is a crucial factor in getting people to recommend your
brand (Critzr, 2020). According to Parihar (2018), satisfied customers are more loyal,
buy more and add significantly to the company’s revenue. Customer satisfaction is
therefore a very important domain in marketing and self-assessment of a company.
Gauging it tells the concerned company how well its product or service fared in the
consumer market.
Nowadays, there is a tight competition in higher education not only for the local
market but also the international one. To reach a big market share, student satisfaction
needs to be maximized and one of the strategies is providing high-quality service
(Chandra et al, 2018). According to (Sultan & Yin Wong, 2012), studies on education
service qualities are considered new in the commercial sector. Hence, it becomes a
national priority.
Students as consumers prefer higher education that provides better service
quality and student satisfaction which either directly or indirectly affects student loyalty
(Annamdevula & Bellamkonda, 2016). Understanding student satisfaction was highly
related to service quality. Satisfaction is a customer response to the service provided
(Chandra et al., 2018).
According to Chandra et al., (2018), customer satisfaction is fair due to its value
paid. Consumers can feel both satisfaction and dissatisfaction due to the service
provided and the money paid. Customers are satisfied whenever services provided are
more than the price paid, and they are dissatisfied whenever services provided are less
than the price paid. Additionally, customer satisfaction does not always relate to
complaints meaning that consumers who never complain do not necessarily mean that
they are satisfied (Kitapci & Taylan, 2011). In higher education, the studies on student
satisfaction are few due to its complexity (Chandra et al., 2018).
Relationship between variables
Nikghadam, et al (2011) observed that there is a significant relationship between
using e-payment services and customer satisfaction. In the digital revolution, the E-
payment system has paved its path. This revolution has emerged with e-banking, eregistration, e-shopping, e-payment, e-learning, e-library, etc. To satisfy our needs with
ease of time, comfort, and convenience the users have to be tech-savvy (Krishna &
Shanmugam, 2020).
Krishna & Shanmugam (2020) proposed that download speed is one of the
determinants of customer satisfaction. Timothy (2012) also proposed that the potential
of a user-oriented organization can be raised only through user satisfaction. Hence the
user’s needs should be identified and act accordingly to fulfill them thus the customers
can be retained. Bagheri, et al (2013) suggested that the strategies to retain the
customer’s and their sustainability is to ensuring novel services and paved the way for
the organizations to come out with strategies not only to retain the existing consumers
but also to enthrall novel consumers.
In the research findings of Ghasemi, S. & Radgohar, H., (2011) e-payment is one
of the most important pillars of e-commerce without it, e-commerce is not whole. Thus,
payment systems are very important for implementing effective monetary policies using
the transactions of the money market and their influences on the financial and economic
activities of the whole country.
Also, the development of payment systems is a vital component in the process of
payments with cards. E-payment service providers not only promote the usage of card
acceptance services, but also perform many other tasks, including the acceptance
commitment of the receiver, routing requests to grant permissions for transactions, and
providing receipts, and they are considered as another group of information services
(Abili & Jafarnejad, 2014).
As Zafar et al. (2011) identify the dimensions of service quality is positive and
effective in increasing customer satisfaction. Therefore, He concludes an action plan to
increase the customer satisfaction level regarding the e-payment system and motivating
them to utilize the following tools: Improving the telecommunication infrastructures of
the company to increase the speed of the lines and eventually enhance the speed and
efficiency of the tools; using information security management systems to increase the
information security; increasing users’ trust in the case of contradictions and account
deficits and also holding periodic training sessions to introduce the facilities of epayment tools; increasing the features of e-payment system that obviate the customers’
need to be present and lead to competitive advantage.
As the researchers conducted the literature review through diverse web articles,
journals, and e-books, the researchers were able to find modern bits of knowledge and
extended their information and viewpoints on the matter being considered. Furthermore,
the researchers investigate the variables of the study and were able to find the
instruments that will address the impact of the e-Payment System on customer
satisfaction among students in sectarian schools in Davao City and educate them.
Theoretical Framework
This study will be anchored on The Value-Percept Theory of Bryan Locke.
According to Smolarczyk (2018), this theory assumes that individuals form expectations
and contrast them with the actual product or service attributes. Also, this model of
theory asserts that satisfaction/dissatisfaction is an emotional response triggered by a
cognitive-evaluative process in which the perceptions of (or beliefs about) an object,
action, or condition are compared to one's values (or needs, wants, desires). Mill (n.d.)
states that customers often make some judgments about a product, its benefits, and the
likely outcomes of using the product. Also, Ad Wahid (2015) supported that customer
satisfaction is defined as the pleasurable emotional state resulting from the evaluation
of service that satisfies customers’ values.
Also, this study adopts based on proposition of Information System Success
Model by DeLone and McLean. As Alzahrani et al. (2019) showed, the quality factors of
digital library systems have a strong influence on satisfaction, behavioral intention, and
variance in actual use. Alzahrani et al. (2019) also reported that user satisfaction and
behavioral intention to use the system also have a strong positive relationship with the
actual use of a digital library system.
Zha et al. (2015) addressed affinity as a construct that boosts students’
information-seeking behavior and found that information quality, system quality, and
service quality are strong predictors of the affinity of the students. Shaltoni et al. (2015)
also used a similar model to evaluate the web portal used by the top five universities of
Jordan and found a significant effect of service availability and quality on students’
satisfaction with the system.
Conceptual Framework
This study will be comprised of the independent variable which is the e-Payment
System. E-payment systems are important mechanisms used by individual and
organizations as a secured and convenient way of making payments over the internet
and at the same time a gateway to technological advancement in the field of world
economy (Slozko & Pello, 2015). In addition, it has also become the major facilitating
engine in e-commerce through which electronic business success relied upon.
Electronic payment system had also brought about efficiency, fraud reduction and
innovativeness in the world payment system (Oladeji, 2014). On the other hand, the
dependent variable of this study is the Customer Satisfaction. Lobzhanidze (2021)
stated that customer satisfaction, or CS, is a measurement that quantifies the level to which
a customer is pleased with a provided product, service, or experience. To make things
simpler, customer satisfaction tells a business how happy the customer is when interacting
with their company. Moreover, customer satisfaction comes when clients can feel the
benefits and the value that they are paying for, and the spending costs of doing
businesses, for example, time, effort and money spent at a firm (Ganiyu et.al 2012).
Generally, electronic payment can be defined as a platform used in making
payments for goods/services purchased online through the use of internet. In addition,
e-payment system tends to bring many electronic modes of payments through which
financial institutions offer different e-payment opportunities and services to their
customers such as the credit cards, debit cards, online banking, and mobile banking. As
a result, the adoption of e-payment technology is ever increasing in today’s business
environment and public sector establishments. On the other hand, customer satisfaction
is a measure of how products and services supplied by a company meet or surpass
customer expectation. Customer satisfaction is also defined as the number of
customers, or percentage of total customers, whose reported experience with a firm, its
products or its services (ratings) exceeds specified satisfaction goals.
Independent Variable
Dependent Variable
E-Payment System
Customer Satisfaction
Figure 1: Conceptual Framework