Unlocking paylater preferences: exploring gen z’s trust dynamics in Indonesia and Malaysia

Abstract

These days, paylater, the most well-known alternative credit option in e-commerce, is widely accessible. This research examines the evolving landscape of paylater preferences among Generation Z in Indonesia and Malaysia. The study employs quantitative methodology using a nonexperimental design that measures the effect of perceived ease of use, perceived usefulness, and perceived trust on the intention to use paylater. The research presents two studies. Study 1 had 500 participants from Indonesia who were paylater and non-paylater users. The results of Study 1 revealed that perceived usefulness and perceived trust positively affect the intention to use paylater; however, perceived ease of use has a negative effect on the intention to use paylater. Study 2 had 165 participants from Malaysia who were also paylater and non-paylater users. The results of Study 2 were similar to those of Study 1. That is, perceived usefulness and perceived trust have a positive effect on the intention to use Paylater, but perceived ease of use has a negative effect on the intention to use paylater. This research contributes to the existing literature on consumer behaviour and financial technology adoption by providing insight into the trust dynamics related to paylater preferences among Generation Z in Indonesia and Malaysia.

Keywords:

• Consumer behavior
• generation Z
• Indonesia
• Malaysia
• paylater

Reviewing Editor:

• Daryl O’Connor, University of Leeds, United Kingdom

Subjects:

• Technology
• Work & Organizational Psychology
• Consumer Psychology

1. Introduction

The COVID-19 pandemic has undoubtedly altered consumer behavior and reshaped the global economy (Aji et al., 2020). Amid this transformative tide, the e-commerce sector has emerged as a beacon of resilience and adaptability through its proliferation of digital payment solutions, offering consumers unparalleled convenience and flexibility. In 2020, alternative credit options in e-commerce named paylater became widely available. The proliferation of paylater services gained significant traction, offering consumers in Southeast Asia newfound flexibility in their purchasing habits. Indonesia emerged as a frontrunner in this trend, boasting the highest number of paylater users, with 7.8 million individuals, while Malaysia secured the third position with 2.9 million users (Ganbold, 2022). According to a report from the International Data Corporation, in 2020, Indonesia had the highest proportion of e-commerce customers using paylater in Southeast Asia, with paylater spending in Indonesian e-commerce totaling US$530 million, which represents approximately 58% of the total paylater spending in Southeast Asian e-commerce. Malaysia ranked second, with US$60 million spent (Karnadi, 2022).

Despite their shared historical and cultural heritage, Indonesia and Malaysia exhibit notable distinctions in their sociopolitical landscapes, demographic compositions, and consumer behaviors (Andik et al., 2018; Chong, 2012; Sani & Hara, 2020). These disparities manifest in divergent shopping styles, with Indonesian consumers displaying a penchant for price-consciousness and habit-driven purchasing patterns, which contrasts with the novelty-seeking tendencies observed among their Malaysian counterparts (Helmi et al., 2018). However, both countries have had a significant increase in both the number of users and the amount of expenditure involved in paylater services, which is partly a result of their integration into e-commerce (Bahadiani & Hutagalung, 2022; Min & Cheng, 2023). Notably, the burgeoning prominence of Generation Z (Gen Z), which comprises individuals born between 1997 and 2012, has a pivotal role in this narrative. With Gen Z constituting a sizable portion of the population in both Indonesia and Malaysia, their preferences and behaviors significantly influence the trajectory of e-commerce and payment methods (Badan Pusat Statistik, 2020; Worldometer, 2021).

In Indonesian and Malaysian e-commerce, paylater has significantly benefited from Gen Z consumers, most of whom do not have credit cards and are more likely to use paylater services for shopping (Katadata Insight Center, 2023). Furthermore, the adoption of paylater by Gen Z is intrinsically linked to broader shifts in digital consumption patterns, with social media platforms serving as influential touchpoints for consumer engagement and brand interaction (Hartsetyo et al., 2023; Wijaya & Utami, 2021). The symbiotic relationship between social media influencers and paylater providers, often underscored by promotional incentives and exclusive discounts, amplifies the appeal of paylater as a conduit for instant gratification and impulse purchases (Bahadiani & Hutagalung, 2022).

However, the allure of paylater is tempered by concerns surrounding financial literacy and responsible credit usage, particularly among Gen Z cohorts (Constansje et al., 2023; Xiao et al., 2011). Against this backdrop, theoretical frameworks such as the technology acceptance model (TAM) offer valuable insights into the determinants of behavioral intention toward paylater adoption. Therefore, this research investigates the following research questions:

1. How do perceived ease of use, perceived usefulness, and perceived trust influence Gen Z’s behavioral intention to adopt paylater as a payment method in the e-commerce context?

2. Considering factors such as perceived ease of use, perceived usefulness, and perceived trust, what are the comparative differences in the perceptions of paylater among Gen Z consumers in Indonesia and Malaysia?

To explore these research questions, we drew on the TAM. Central to TAM frameworks are three key variables: perceived ease of use, perceived usefulness, and perceived trust. Perceived ease of use refers to the extent to which individuals perceive a system or technology as uncomplicated and user-friendly, with intuitive navigation and minimal cognitive effort (Davis, 1989). Perceived usefulness, on the other hand, pertains to the perceived utility or benefits derived from using a particular technology or system, including its ability to enhance efficiency, productivity, or convenience (Davis, 1989). Finally, perceived trust defines a psychological condition comprising the intention to accept vulnerability based on positive expectations of another party’s intention or behavior in an interdependent and risky environment (Ding, 2010). In the context of paylater adoption within e-commerce, these constructs serve as critical determinants of the behavioral intentions of members of Gen Z in Indonesia and Malaysia, shaping their attitudes, perceptions, and decision-making processes. Moreover, the interplay between these factors is expected to be dynamic, with perceived trust mediating the effect of perceived ease of use and perceived usefulness on behavioral intention (Shaw, 2014).

By delving into the nuances of paylater adoption among Gen Z cohorts in Indonesia and Malaysia, this research aims to provide a nuanced understanding of cross-cultural variations in consumer behavior. Through this comparative analysis, the research endeavors to enrich scholarly discourse and offer insights that can inform strategic interventions within the dynamic e-commerce landscape.

2. Literature review

Theoretical models have been created to analyze and explain the acceptance of and behaviors related to new technologies. TAM (Davis, 1989) is widely used in research in this area. The three variables examined in this study—intention to use, perceived usefulness, and perceived ease of use—are based on TAM and the definitions of these factors from Davis (1989).

2.1. Intention to use paylater

Davis (1989) has stated that when a new technology is considered appropriate to meet the needs of users, the desire to use the technology will increase. The user’s desire to use a technology that is new to them for the first time or to use it again is referred to as ‘intention to use’. In the original TAM and its subsequent adaptations, intention to use is typically measured as a single construct that reflects the user’s overall intention to adopt and use a specific technology or system. This unidimensional construct simplifies the model for practical purposes and makes it easier to assess and predict technology acceptance (Davis, 1989). Many studies have used TAM to predict consumer behavior in relation to intention to use in contexts such as online banking (Lai et al., 2010; Luarn & Lin, 2005; Sundarraj & Manochehri, 2013), online shopping (Gefen et al., 2003), m-payment (Liébana-Cabanillas et al., 2014; William, 2021), e-commerce (López-Nicolás et al., 2008), and e-wallet (Shaw, 2014). Moreover, recent research by Raj et al. (2023, 2024) has highlighted the significance of perceived risks, perceived benefits, privacy concerns, and trust in influencing consumers’ behavioral intention to use buy now, pay later (BNPL) services.

2.2. Perceived usefulness

Perceived usefulness can be defined as the extent to which a person believes using a technological system can improve their work performance (Davis, 1989). Perceived usefulness is a significant variable in TAM and measures individual acceptance of information systems. With e-commerce, perceived usefulness refers to consumers’ perception that using the internet to shop can improve their shopping experience (Mohamed et al., 2014), precisely the extent to which their online transactions can give them access to useful information, facilitate price comparisons, and speed up the transaction process (Vijayasarathy, 2004). That is, perceived usefulness in an online context will indicate that the use of a technology can help achieve the desired goals or results. Perceived usefulness is the main factor in TAM (Davis, 1989) that determines the acceptance and use of information and communication technology and is considered to influence the intention to use paylater. Thus, this research proposed the following hypothesis:

H1: Perceived usefulness affects the intention to use paylater.

2.3. Perceived ease of use

Perceived ease of use can be defined as the extent to which a person believes that using a particular system can be done without effort (Davis, 1989). In the context of using technology applications, perceived ease of use refers to the perception that using an application requires neither mental stress nor a lot of time or effort (Raza et al., 2017). In a more specific context, such as e-commerce, perceived ease of use is defined as the extent to which consumers believe that online transactions are easy to carry out (Vijayasarathy, 2004). Perceived ease of use is considered an important factor in the adoption of new technologies such as electronic services, electronic payments, and internet banking (Kalinic & Marinkovic, 2015). Raj et al. (2023) have revealed that perceived behavioral control increases the intention to use BNPL services. This means that when users perceive that using BNPL services is easy, is straightforward, and requires minimal effort, their perceived behavioral control regarding BNPL usage will be high.

According to the meta-analysis research of Baki et al. (2018), self-efficacy, satisfaction, anxiety, and subjective norms influence perceived ease of use. In the context of technology, self-efficacy is an individual’s perception of their ability to use technology. The influence of self-efficacy on perceived ease of use can be explained by the persistence of users with higher self-efficacy to learn a system (Baki et al., 2018). Thus, this research proposed the following hypothesis:

H2: Perceived ease of use affects the intention to use paylater.

2.4. Perceived trust

Trust allows for the expression of an expectation about the future behavior of a person, which is often based on previous interactions. Trust has been examined in many contexts, including social psychology, e-commerce, and e-banking. From a social psychology perspective, trust is characterized in terms of the expectation and willingness of the trusting party to engage in a transaction (Carlos Roca et al., 2009). Ding (2010) has defined perceived trust as a psychological condition comprising the intention to accept vulnerability based on positive expectations of another party’s intention or behavior in an interdependent and risky environment.

According to Shaw (2014), trust significantly influences behavioral intentions to use mobile wallet technology. Empirical research has demonstrated that trust in online vendors increases people’s intention to use the vendors’ websites in the e-commerce context (Bhattacherjee, 2002; George, 2002; Mukherjee & Nath, 2007) and the e-banking context (Casaló et al., 2007). Bhattacherjee (2002) found that trust has a positive effect on an individual’s willingness to conduct transactions with an online bank. George (2002) empirically demonstrated that individuals who believe the internet to be more trustworthy have more positive attitudes about purchasing over the internet. Casaló et al. (2007) found that website security, privacy, and usability (a construct similar to perceived ease of use and perceived usefulness) have a direct and significant effect on consumer trust in a financial services website. Thus, this research proposed the following hypotheses:

H3: Perceived usefulness affects perceived trust.

H4: Perceived ease of use affects perceived trust.

H5: Perceived trust affects the intention to use paylater.

2.5. Technology acceptance model

Over the past 30 years, TAM (Davis, 1989) has been the most widely used theoretical model for explaining intention to use technology (Rahimi et al., 2018). TAM is used to examine different types of technology (Drehlich et al., 2020) and users (Venkatesh et al., 2003) in a wide range of information and communications technology application domains (Sagnier et al., 2020; Yoon, 2016), and is a highly useful model for explaining the adoption of a new technology (Marangunić & Granić, 2014). TAM is based on two theories created in the field of psychology: the theory of reasoned action and the theory of planned behavior. Davis (1989) adapted the theory of reasoned action and the theory of planned behavior to introduce a conceptual model in 1985 that utilized perceived usefulness and perceived ease of use to predict user attitudes toward a technological system (Davis, 1989). Davis (1989) then refined this conceptual model to produce TAM, which states that user motivation is influenced by perceived usefulness, perceived ease of use, and attitudes toward a system/technology. However, Davis (1989) later removed the attitude construct to create a simpler TAM model. This newer TAM model includes behavioral intention as a variable directly influenced by perceived usefulness, with attitude no longer being considered a variable. TAM became a model that is often used to explain and predict the use of a system (Marangunić & Granić, 2014).

TAM is widely used to study the ongoing adoption of new technologies. Furthermore, TAM has been expanded to make it a more complete model that has the power to explain technology adoption more thoroughly (Teo, 2009). Previous research has found that apart from perceived usefulness and perceived ease of use, intentions to use technology can also be influenced by factors such as social influence (Nguyen & Cassidy, 2018), perceived innovation (Williams, 2021), perceived convenience (Williams, 2021), perceived risk (Liébana-Cabanillas et al., 2014; Williams, 2021; Raj et al., 2024), privacy concerns (Raj et al., 2023), perceived trust (Duane et al., 2012; Groß, 2014; Shaw, 2014; Raj et al., 2023), and age (Liébana-Cabanillas et al., 2014). Thus, TAM can be used to predict the intention to use paylater in the context of e-commerce. This research proposed the following hypotheses (see Figure 1):

H6: Perceived usefulness indirectly affects the intention to use paylater through perceived trust.

H7: Perceived ease of use indirectly affects the intention to use paylater through perceived trust.

3. Methods

This research was quantitative and used a nonexperimental design. Study 1 and Study 2 measured the effect of perceived ease of use, perceived usefulness, and perceived trust on the intention to use paylater by participants from Indonesia and Malaysia, respectively.

The instrument used to measure perceived ease of use, perceived usefulness, perceived trust, and the intention to use paylater was adapted from Shaw (2014). Each variable was measured on a 7-point Likert scale. The questionnaire for both studies consisted of 18 items and could be completed in 7–10 minutes. The research items were adapted to the research context, that is, the use of paylater in e-commerce. To reduce common method bias, which is bias that can occur when research measures the independent variable and the dependent variable together in one survey with a similar scale, questionnaire items were randomly sorted (Podsakoff et al., 2012). Ethical clearance for the research was provided by the Faculty of Psychology Ethics Committee (No. 041/FPsi.Komite Etik/PDP.04.00/2023). All instruments used in the experimental studies were translated into Bahasa Indonesia and Malay using the translation procedure of Sousa and Rojjanasrirat (2011).

Data were collected using Zoho Survey software. We used a convenience sampling method to target participants through social media platforms (Instagram, Facebook, WhatsApp, and Twitter). Survey links were sent out to participants who met the inclusion criteria. Participants needed to be aged 18–25 in 2023, with experience using at least one e-commerce application. Whether this was paylater was inconsequential. Our study targeted 1000 participants: 500 Indonesians and 500 Malaysians. We collected age, sex, paylater user/non-user, and employment information as demographic data for all participants in both studies. All participants were told to provide their birth year to allow us to ensure all participants belonged to Gen Z. We also collected paylater type, number of times using paylater, and reason for using/not using paylater. No compensation was provided to the participants. Data analysis was performed using Statistical Package for Social Sciences (SPSS) statistical software and multiple regression for indirect analysis. The research also used independent sample t-test analysis to determine whether there is a significant difference in the mean between the two independent participant groups (Indonesia and Malaysia).

4. Data analysis

We conducted preliminary analyses on the means, standard deviations, reliabilities, and correlations among all key variables using SPSS. The internal consistency reliability was estimated using McDonald’s omega. The McDonald’s omega coefficient ranges in value from 0 to 1; the higher the score, the greater the reliability of the generated scale. Nunnaly (1978) specified 0.7 as an acceptable reliability coefficient; however, lower thresholds are sometimes used in the literature. To test our main effects hypotheses, we conducted multiple regression analysis, with perceived trust and intention to use as the outcome variables. We performed classical assumption tests (i.e. multicollinearity test, normality test, and heteroscedasticity test) before conducting the multiple regression analysis. To test indirect analysis, we conducted Sobel tests. We also used independent sample t-test analysis to determine whether there is a significant difference in the intention to use paylater between the two independent participant groups (members of Gen Z in Indonesia and Malaysia). Members of Gen Z were chosen as research participants because of their status as digital natives and their increasing influence on consumer trends, particularly in the context of e-commerce and digital payment methods like paylater.

5. Study 1

5.1. Participants

Participants completed a self-report questionnaire assessing perceived ease of use, perceived usefulness, perceived trust, and intention to use paylater, and collecting demographic information (sex, age, occupation, paylater/non-paylater user). All response formats were based on a Likert scale except the demographic items.

Following the original sampling target, we received responses from 926 Indonesian participants; 500 of those responses were used in the study. A screening question about the participant’s accuracy in providing their age (18–25 years old) and whether they were willing to complete the survey was included. Of the participants, 61% of participants (n = 304), 77% had a high-school-level of education (n = 385), and 81% reported their occupation as student (n = 404). Furthermore, 249 (49.8%) participants were paylater users (n = 249), and 50.2% were non-paylater users (n = 251)

5.2. Results

Analysis of McDonald’s omega coefficients showed satisfactory levels of internal consistency reliability of the scales since all exceeded the cutoff of 0.7 commonly recommended for research (Kaplan & Saccuzzo, 2013). The reliability coefficients for each of the variables are as follows: perceived usefulness (ω = 0.880), perceived ease of use (ω = 0.850), perceived trust (ω = 0.944), and intention to use paylater (ω = 0.927).

The results of the multiple regression analysis (Table 1) indicate that perceived usefulness (B = 0.758, SE = 0.063, β = 0.620, t = 11.958, p < 0.05), perceived ease of use (B = −0.316, SE = 0.074, β = −0.226, t = −4.294, p < 0.05), and perceived trust (B = 0.358, SE = 0.052, β = 0.336, t = 6.918, p < 0.05) positively affect intention to use paylater. Therefore, H1, H2, and H5 were confirmed. Furthermore, perceived usefulness (B = 0.444, SE = 0.051, β = 0.387, t = 8.664, p < 0.05) and perceived ease of use (B = 0.568, SE = 0.059, β = 0.432, t = 9.681, p < 0.05) were found to positively affect perceived trust. Therefore, H3 and H4 were confirmed. The additional analysis of the mediating effect of perceived trust on the relationship between perceived usefulness and intention to use paylater yielded a coefficient of 0.130 (p < 0.05). Similarly, the mediating effect of perceived trust on the relationship between perceived ease of use and intention to use paylater yielded a coefficient of 0.145 (p < 0.05). These findings suggest that perceived trust, perceived usefulness, and perceived ease of use are important factors influencing the participants’ intention to use paylater. The R² = 0.522 result reveals that perceptions of usefulness, perceived ease of use, and perceived trust can predict 52.2% of the intention to use paylater, with other factors accounting for the remaining 47.8%. Perceived trust was also found to act as a partial mediator in the relationship between perceived usefulness and intention to use paylater, as well as between perceived ease of use and intention to use paylater. Therefore, H6 and H7 were confirmed.

5.3. Discussion

Study 1 found that the intention of Gen Z members from Indonesia to use paylater is positively influenced by their perception of trust. These findings are consistent with Shaw (2014), who discovered that perceived trust has a positive effect on the intention to use a mobile wallet. Perceived trust decreases anxiety when a person is confronted with risky situations (Renzl, 2008); thus, perceived trust in paylater allows consumers of e-services to use services such as paylater without feeling overly concerned.

This study found that the intention to use paylater is significantly positively affected by perceived usefulness. Previous research has demonstrated that perceived usefulness has a positive effect on the intention to use a particular technology. For example, Chawla and Joshi (2019) study in India found that perceived usefulness has a significant positive effect on users’ intentions to use mobile wallets. Tong (2010) found that intention to use in the context of online shopping is also influenced by perceived usefulness, whereby users are more likely to engage in frequent online shopping transactions when they perceive a technology as useful for this purpose. Perceived ease of use was found to have a significant negative effect on the intention to use paylater by Gen Z members from Indonesia. This finding is consistent with research conducted by Purnamasari et al. (2021), which found that the easier paylater is to use, the fewer people will choose to use it.

Using multiple regression analysis, this study demonstrates that perceived usefulness, perceived ease of use, and perceived trust account for 52.2% of variation in the intention to use paylater. This means that variables not considered in this study account for 47.8% of the variation in the intention to use paylater. However, the results of our study demonstrate that these three variables have a significant influence on the intention of Gen Z members from Indonesia to use paylater because they account for more than half of the variance in the participants’ intentions to use paylater. In Indonesia, Gen Z’s intention to use paylater depends heavily on how they perceive the service, particularly how usable, simple, and trustworthy they believe it to be.

6. Study 2

6.1. Participants

Survey links were sent out to participants through social media platforms (WhatsApp, Facebook, and Instagram). After our survey was sent, 200 initial responses to the questionnaire were collected. Only 165 participants were included after data cleansing. It was difficult to recruit survey respondents for Study 2, and the number of respondents did not meet our target (500 respondents). There were fewer initial respondents than for Study 1, and of those respondents, some did not complete the survey. A possible reason for this is the use of English in Gen Z’s daily life, which means that some people we tried to recruit were not accustomed to speaking Malay. Of the 165 participants in Study 2, 55% were women (n = 91), 79% had a bachelor’s degree level of education (n = 130), and 88% reported their occupation as a freelancer (n = 146). Furthermore, 72.7% of participants were non-paylater users (n = 120), and 27.3% were paylater users (n = 45).

6.2. Results

In Study 2, the reliability coefficients for each variable are as follows: perceived usefulness (ω = 0.874), perceived ease of use (ω = 0.811), perceived trust (ω = 0.933), and intention to use paylater (ω = 0.922). The analysis of McDonald’s omega coefficients revealed that the scales had satisfactory levels of internal consistency and reliability that exceeded the cutoff value of 0.7 commonly recommended for research (Kaplan & Saccuzzo, 2013).

The results of the multiple regression analysis (Table 2) revealed that perceived usefulness (B = 0.563, SE = 0.102, β = 0.435, t = 5.504, p < 0.05), perceived ease of use (B = −0.397, SE = 0.105, β = −0.263, t = −3.776, p < 0.05), and perceived trust (B = 0.661, SE = 0.076, β = 0.594, t = 8.690, p < 0.001) positively affect intention to use paylater. Therefore, H1, H2, and H5 were confirmed. Furthermore, perceived usefulness (B = 0.669, SE = 0.092, β = 0.576, t = 7.301, p < 0.05) and perceived ease of use (B = 0.234, SE = 0.107, β = 0.173, t = 2.192, p < 0.05) were found to positively affect perceived trust. Thus, H3 and H4 were confirmed. The additional analysis of the mediating effect of perceived trust on the relationship between perceived usefulness and the intention to use paylater yielded a coefficient of 0.342 (p < 0.05). A coefficient of 0.102 (p < 0.05) was obtained for the mediating role that perceived trust played in the relationship between perceived ease of use and the intention to use paylater. These results indicate that perceived ease of use, perceived usefulness, and perceived trust are significant determinants of intention to use paylater. R² = 0.627 shows that perceptions of usefulness, perceived ease of use, and perceived trust can predict 62.7% of the intention to use paylater; factors not tested in this study accounted for the remaining 37.3%. Perceived trust was found to act as a partial mediator in the relationship between perceived usefulness and the intention to use paylater services, as well as between perceived ease of use and the intention to use paylater. Therefore, H6 and H7 were confirmed.

6.3. Discussion

Study 2 found that perceived trust has a significant positive effect on the intention to use paylater services. This finding suggests that when consumers perceive paylater services as trustworthy, they are more likely to have the intention to use them. This aligns with previous research that emphasizes trust has a positive and significant effect on repurchase intentions (Syaharani & Yasa, 2022). That is, the higher the level of trust that consumers have in a company or its products, the higher the chance that the consumer will have repurchase intentions.

Perceived usefulness also has a significant positive effect on the intention to use paylater services. This finding suggests that when consumers perceive paylater services as useful in meeting their financial needs or providing convenience, they are more likely to have the intention to use them. The results of this study are in accordance with the research of Malaquias and Silva (2020), Ho et al. (2020), and Jose and Varghese (2020), who found that perceived usefulness has a significant positive effect on behavioral intention.

Interestingly, H2 revealed a negative effect of perceived ease of use on the intention to use paylater services. This finding suggests that when consumers perceive paylater services as too easy to use, it may lead to concerns or reservations about overspending or accumulating debt. This negative relationship between perceived ease of use and the intention to use paylater services may be attributed to the perception of impulsivity or lack of control associated with the ease of using such a service.

H3 and H4 indicate that perceived usefulness and ease of use have significant positive effects on perceived trust. When there is a higher level of perceived usefulness and perceived ease of use by consumers, the level of consumer trust will increase. This result aligns with the results of Carlos Roca et al. (2009), who found that perceived usefulness and perceived ease of use are important determinants of perceived trust in the context of online trading systems.

Using multiple regression analysis, Study 2 revealed that 62.27% of variation in the intention to use paylater can be explained by perceived usefulness, perceived ease of use, and perceived trust. Given that these three factors explain over half of the variance in the intention of Gen Z members from Malaysia to use paylater, it is evident that these three variables have a significant influence on the feelings of Gen Z members from Malaysia about using paylater.

7. General discussion

Two nonexperimental studies were conducted to investigate how the behavioral intention to use paylater as a payment method of Gen Z members from Indonesia and Malaysia is influenced by their perceived ease of use, perceived usefulness, and perceived trust. Across the two studies, we found that perceived ease of use has a significant effect on the intention to use paylater in the two Gen Z groups, but the effect of perceived ease of use is negative. This result is in line with a study conducted by Purnamasari et al. (2021) that examined consumers’ purchase decisions in relation to paylater and found a negative influence of perceived ease of use on user decisions.

Self-efficacy influences perceived ease of use: users who are most confident in their ability to learn a system tend to use it more consistently (Baki et al., 2018). This self-efficacy then influences consumers’ perceptions of ease of use. When a person has a high level of self-efficacy, they anticipate that learning the paylater system will be simple, but they still may not want to use the system. Paylater uses a system similar to that of credit cards to ensure that customers are already familiar with the mode of use and thus drawn to products that are simple to use. However, perceptions of ease of use frequently decline (Sarkam et al., 2022). This perception of ease of use of paylater may lead the consumer to feel that using this payment system would be impulsive or lead to a lack of control, which might deter Gen Z individuals in Indonesia and Malaysia from using paylater despite its convenience. It is important to note that the negative effect of perceived ease of use on Gen Z’s intention to use paylater is not consistent across all previous research. That is, some studies have found positive effects of perceived ease of use on intention to use mobile payment services (Wang & Dai, 2020). This discrepancy may be due to variations in the study context, sample characteristics, or measurement approaches used in different studies.

A comparison test was carried out to determine the intention to use variable for Indonesian and Malaysian participants. From the independent sample t-test, we found that p < 0.05, meaning there is a significant difference in the intention to use paylater between the Gen Z members in Indonesia and Malaysia. This is supported by the mean of intention-to-use value in Indonesia, which is higher than it is in Malaysia. This is supported by data on paylater users in Southeast Asia from 2020, which states that Malaysia has the third-highest number of users in the region, with 2.9 million users, and Indonesia has the highest number of users in the region, with 7.8 million users (Ganbold, 2022). From the analysis of indirect relationships in both studies, perceived trust was found to function as a mediator in the relationship between perceived usefulness and the intention to use paylater, as well as in the relationship between perceived ease of use and the intention to use paylater. In conclusion, perceived usefulness and perceived ease of use were found to have a significant positive effect on the intention to use paylater, which aligns with the findings of previous research on technology adoption. This would provide a more comprehensive understanding of the factors driving Gen Z’s decision-making process in relation to using such services and inform the development of strategies to promote the adoption of paylater services among this demographic.

7.1. Theoretical implications

This study has important theoretical and practical implications. The findings contribute to the TAM by revealing the nuanced relationship between perceived ease of use and the intention to use paylater services. This challenges the traditional assumption of a positive correlation and highlights the importance of considering contextual factors and individual differences in technology adoption models. The study underscores the significance of self-efficacy in shaping perceived ease of use and the intention to use paylater services. Integrating self-efficacy as a determinant in technology adoption models can provide a more comprehensive understanding of user behaviors and decision-making processes (Baki et al., 2018). Furthermore, studies by Raj et al. (2024) have also contributed to the TAM by suggesting that perceived risks and privacy concerns play significant roles in shaping consumers’ behavioral intentions to use BNPL services.

7.2. Practical implications

This study provides broader perspectives on consumer behavior regarding paylater. First, Gen Z consumers should critically evaluate the balance between the convenience offered by paylater services and the potential loss of control over their finances. Developing a nuanced understanding of these trade-offs can empower them to make responsible financial choices. Second, for financial industries, building trust should be a central focus. This entails implementing robust security measures, transparent policies, and effective customer support to alleviate Gen Z’s concerns about trust in paylater services. Third, regarding government policies in Indonesia and Malaysia, both governments should establish clear regulatory frameworks to govern the operation of paylater services, ensuring consumer protection and financial stability. These regulations should strike a balance between fostering innovation and safeguarding consumer interests.

7.3. Study limitations and suggestions for future research

Our study has some limitations that lead to suggestions for future research. First, we used Malay for the survey administered in Study 2. This caused challenges in finding survey respondents. According to Fital et al. (2022), Gen Z members in Malaysia are more confident in using the English language than the Malay language. This is because, from birth, the members of Gen Z in Malaysia have been exposed to the English language. They are then exposed to English through the education system, which uses it as the language of instruction for several subjects. We suggest that further research on Gen Z members in Malaysia use surveys in English. Second, there were far fewer paylater users than non-paylater users in Study 2 (i.e. 72.7% of participants were non-paylater users, and 27.3% were paylater users), and many of these stated that they do not use paylater because of their concerns about being charged exorbitant interest rates. Third, the examination of the mediatory role of perceived trust requires a temporal gap, given that mediation effects unfold over time. However, because of uncertainty about the exact population size (Gen Z cohorts in two countries) and challenges associated with collecting and retaining participants for longitudinal research, our study was conducted cross-sectionally or through data collection at one time point. It would be beneficial for future research to conduct data collection at different times to allow for a more comprehensive understanding of the mediation process (Maxwell et al., 2011). Fourth, perceived trust also emerges as a significant factor influencing the intention to use paylater. However, other factors such as social influence, perceived innovativeness, perceived convenience, perceived risk, age, and financial literacy may also influence the intention to use paylater among Gen Z members in Indonesia and Malaysia. To further understand Gen Z’s adoption of paylater services, future research should explore these additional factors and their effect on intention to use paylater.

Figure 1. Suggested research model. Perceived Usefulness and Perceived Eas of Use as independent variables to predict Intention to Use Payler and mediated by Perceived Trust.

Table 1. Testing of the multiple regression (Indonesia).

Variable	B	SE	β	t	p
Perceived Trust → Intention to Use	0.358	0.052	0.336	6.918	0.000
Perceived Usefulness → Intention to Use	0.758	0.063	0.620	11.958	0.000
Perceived Ease of Use → Intention to Use	−0.316	0.074	−0.226	−4.294	0.000
Perceived Usefulness → Perceived Trust	0.444	0.051	0.387	8.664	0.000
Perceived Ease of Use → Perceived Trust	0.568	0.059	0.432	9.681	0.000
Perceived Usefulness → Perceived Trust → Intention to Use			0.130		0.000
Perceived Ease of Use → Perceived Trust → Intention to Use			0.145		0.000

Table 2. Testing of the multiple regression (Malaysia).

Variable	B	SE	β	t	p
Perceived Trust → Intention to Use	0.661	0.076	0.594	8.690	0.000
Perceived Usefulness → Intention to Use	0.563	0.102	0.435	5.504	0.000
Perceived Ease of Use → Intention to Use	−0.397	0.105	−0.263	−3.776	0.000
Perceived Usefulness → Perceived Trust	0.669	0.092	0.576	7.301	0.000
Perceived Ease of Use → Perceived Trust	0.234	0.107	0.173	2.192	0.030
Perceived Usefulness → Perceived Trust → Intention to Use			0.342		0.000
Perceived Ease of Use → Perceived Trust → Intention to Use			0.102		0.033

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Data available on request from the authors. The data that support the findings of this study are available from the corresponding author, MDM, upon reasonable request.

Additional information

Funding

The first author received funding for her stipent and for this publication from Perusahaan Listrik Negara (Indonesian State Electricity Company).

Notes on contributors

Anindya Prasetyani

Anindya Prasetyani is a master’s candidate in Industrial and Organizational Psychology at the Faculty of Psychology, Universitas Indonesia. She has a research interest in consumer behavior and organizational development. She is also a human capital practitioner at an Indonesian stateowned company.

Martina Dwi Mustika

Martina Dwi Mustika is a registered psychologist in Australia, researcher, and lecturer in the Faculty of Psychology, Universitas Indonesia. Her research interests are individual differences in Business Psychology, utilization of technology in educational and organizational settings, consumer behavior, and working in aged care.

Bertina Sjabadhyni

Bertina Sjabadhyni is a lecturer and researcher at the Faculty of Psychology, Universitas Indonesia. She teaches several subjects related to Industrial and Organizational Psychology. Her research interest is in consumer psychology related to online financial creditors.

Nurul Adira

Nurul Adira has a bachelor’s degree from the Faculty of Psychology, Universitas Indonesia. She has a research interest in the topics of consumer behavior. She is now practicing as a recruitment consultant for a startup company.

Nuradli Ridzwan Shah Bin Mohd Dali

Nuradli Ridzwan Shah Bin Mohd Dali is a Senior Lecturer at the Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia. He has a strong research interest in Financial Economics, E-Commerce, Islamic Banking and Finance, and entrepreneurship. He has also authored and co-authored over 150 research papers, book chapters, and conference papers.

Maran Nandan

Maran Nandan is an advocate and solicitor of the High Court of Malaya and the Solicitor of NSW. He was formerly lecturing at the Law Faculty Multimedia University of Malaysia as a specialist. He is currently practicing law in Sydney, Australia.