Multi-dimensional analysis of perceived risk on credit card adoption

Abstract

Credit card, a combination of non-cash payment and personal consumption credit, is a beneficial and convenient electronic service in the modern bank sector. However, this service has not been used widely in Vietnam. Even in the last few years, consumers tend to reduce using it. Thus, a comprehensive investigation of credit card usage becomes imperative for banks. This study applies an approach of perceived risk to explain consumer’s intended use of credit card. Based on data collecting from structured self-administered questionnaires of 228 Vietnamese bank account payers, the analytical results illustrate that the intention to use credit cards is negatively influenced by risk perception, which is synthesized from psychological risk, financial risk, performance risk, security risk, privacy risk, social risk and time risk with decreasing contribution. Some recommendations are made to reduce consumer concerns in order to encourage them signing up and using credit card as a mean of payment for daily expenses.