Abstract
The failure to use mobile banking is especially puzzling given that conventional costs of use appear to be low and the benefits, for many, are substantial. In the extant studies, factors that affect the mobile banking adoption include the perceived ease of use, usefulness, risk and financial cost, compatibility with lifestyle and device, consumer trust in mobile banking, social and cultural factors, and a range of demographic factors (Crabbe et al., 2009). Barriers to the take-up and usage of mobile banking can go beyond the above-mentioned variables. It has been increasingly challenged by recent work that individuals may fail to take an action that is in their long-run best interest due to cognitive, motivational, and emotional limits to decision-making (Currie, 2006). If existing barriers to mobile banking use, particularly amongst those of high need, are because of “psychological frictions”, then encouraging the usage by reducing these barriers would likely improve the user’s welfare. However, there are few inferences drawn about the importance of psychological frictions in accounting for the low use in mobile banking. This study sets out to fill this gap by using a randomized controlled trial experiment to increase adoption of mobile banking in urban-rural China. By cooperating with a rural and commercial bank in China, we randomly provide bank account users information nudges and evaluate their responses in the use of mobile banking. Specifically, we will investigate 1) whether information nudges improve the adoption and usage of mobile banking among bank account users, 2) how long do the effects last and 3) whether the effects differentially manifest across individuals.