i

UGANDA CHRISTAIN UNIVERSITY, MUKONO

FACULTY OF BUSINESS AND ADMINISTRATION

E-BANKING SERVICE PERCEPTION: AN EVALUATION OF AUTO TELLER
MACHINE (ATM) USAGE IN UGANDA

BY


ASERE GLORIA SANDRA
(S10B05/029)




A dissertation submitted to the faculty of Business & Administration in partial
fulfillment of the requirement for the Award of Bachelors of Business Administration
degree of Uganda Christian University- Mukono.




2013



ii

DECLARATION

I ASERE GLORIA SANDRA declare that this research report is my original work and to the
best of my knowledge has never been submitted to any institution for any academic award.



NAME: ASERE GLORIA SANDRA
Signature
Date :.













iii

APPROVAL

This is to certify that this research report by ASERE GLORIA SANDRA was done under my
supervision and is now ready for submission with my approval to faculty of Business and
Administration.


Signature .Date.
Dr.OLOBO MAURICE














iv

DEDICATION

I dedicate this work to my dear parents Mr. and Mrs. Ochieng David Ngereza for your love
and support that they wholly heartedly gave me and for putting their own ambitions on hold
and for accepting my studies as the last born. To my sister M/s NyanduriDaphine and
brothers MR Ngereza Patrick, OchiengErisa and Bob Rawlings for all the guidance and
advice and to all my friends who have assisted me in one way or another.

















v

ACKNOWLEDGEMENT

I take this opportunity to thank the Almighty God for having given the gift of life plus my
parents who bare me and also gave me a chance in life to attain all the benefits of my course
at Uganda Christian University.
I appreciate the efforts of all my respondents who offered me all the assistance I needed while
I was doing my research especially the students (my class mates). My God reward them for
their kindness and the spare time offered.
Among all is my supervisor Mr. OLOBO MAURICE for giving me all the maximum
attention and having patience when there was a delay and above all for the excellent guidance
that was needed to complete my research smoothly.
I am also indebted to send my special thanks to the following people; My parents for all the
support they gave me while I was doing my degree; my sister and brothers for the help they
gave me while I was doing this work; My friends Maling Samuel, Nambozo Faith,
NamukobeBarbra, WeragireDarion, Brenda .A, Alice M and many others who gave me a
hand while I was doing this work.










vi

ACRONYMS

P.U - Perceived Usefulness

PEOU - Perceived Ease of Use

B.I - Behavioral Intention
TRA - Theory of Reasoned Action

TAM - Technology Acceptance Model

ATM - Auto Teller Machine

St.D - Standard deviation

SA - Strongly Agree

A - Agree

NS - Not Sure
D - Disagree
SD - Strongly Disagree.




vii

LIST OF TABLES
Table 4-1: Back Ground Research Data ..................................................................................29
Table 4-2: Perceived Usefulness of Auto Teller Machines (ATM) ............................................30
Table 4-3: Perceived Ease of Use of Auto Teller Machines (ATM) ...........................................31
Table 4-4: Behavioral Intention to Use Auto Teller Machines (ATMs) .....................................32
Table 4-5: Bank Policy on ATM Usage ....................................................................................33
Table 4-6: Internet Accessibility .............................................................................................33


LIST OF FIGURES
Figure 1-1: conceptual frame work....5













viii

TABLE OF CONTENTS
DECLARATION ........................................................................................................................... i
APPROVAL .............................................................................................................................. iii
DEDICATION ........................................................................................................................... iv
ACKNOWLEDGEMENT.............................................................................................................. v
ACRONYMS ............................................................................................................................. vi
LIST OF TABLES ...................................................................................................................... vii
ABSTRACT ............................................................................................................................... xi
CHAPTER ONE; ........................................................................................................................1
1.0 INTRODUCTION .................................................................................................................1
1.1Background of the study .....................................................................................................1
1.2 statement of the problem ..................................................................................................2
1.3 The purpose of the study ...................................................................................................2
1.3.1 The specific objectives ....................................................................................................2
1.4 Research Questions ...........................................................................................................3
1.5 The scope of the study .......................................................................................................3
1.6 Significance of the study ....................................................................................................3
1.7 The limitations of the study ...............................................................................................4
CHAPTER TWO. .......................................................................................................................6
LITERATURE REVIEW ................................................................................................................6
2.1. Introduction ......................................................................................................................6
2.2. Perceived usefulness, Perceived ease of use and Behavioral Intention to use on ATMs ....7
2.3. Perceived usefulness and behavioral intention to use ATM ............................................11
2.4. Behavioral intention and ATM System ............................................................................13
2.5. Perceived ease of use and perceived usefulness .............................................................15
2.6. Perceived ease of use and behavioral intention to use ATM ...........................................21
ix

CHAPTER THREE ....................................................................................................................24
3.1 Introduction .....................................................................................................................24
3.2 Area of Study ...................................................................................................................24
3.3 Research Design...............................................................................................................24
3.4 Target Population ............................................................................................................25
3.5 Sampling Method / Sampling Size ....................................................................................25
3.6 Data Collection Methods .................................................................................................25
3.7 Data Collection Instruments.............................................................................................26
3.8 Research Procedure .........................................................................................................26
3.9 Data Analysis and Presentation ........................................................................................27
3.10 Ethical Considerations ....................................................................................................27
3.11 Limitation of the Study...................................................................................................27
CHAPTER FOUR .....................................................................................................................28
4.1 Back ground data of the Respondents..............................................................................28
4.2. Response on Perceived Usefulness of the Auto Teller Machines (ATM)...........................30
4.3. Perceived Ease of Use of Auto Teller Machine (ATM) ......................................................30
4.4. Behavioral Intention to Use Auto Teller Machines (ATMs) ..............................................31
4.5. Bank Policy implication on Auto Teller Machine (ATM) Usage .........................................33
4.6. Assessing the level of Internet Accessibility.....................................................................33
CHAPTER FIVE .......................................................................................................................35
5.0 INTRODUCTION ...............................................................................................................35
5.1 DISCUSSION OF THE FINDINGS .........................................................................................35
5.2 CONCLUSIONS .................................................................................................................37
5.3 RECOMMENDATIONS ......................................................................................................37
5.4 AREAS FOR FURTHER RESEARCH ......................................................................................38
REFERENCES ..........................................................................................................................39
x

APPENDICES
QUESTIONAIRE FOR AUTO TELLER MACHINE (ATM) USERS/ HOLDRES..............................42
Introductory letter...46



















xi

ABSTRACT
The study examines E-banking service perceptions; An evaluation of Auto Teller Machine
(ATM) usage in Uganda. Its expected that once customers perceive the ATM system to be
useful, this consequently influences their Behavioral Intention to use the system. Further their
Perceived Ease of Use influences their Perceived Usefulness leading to Behavioral Intention
to use the ATM system. A conceptual frame work was developed relating to Technology
Acceptance Model (TAM).
Most Technology Acceptance Model studies have been empirical investigations, using the
survey approach with great success. TAM is a mature model and has been validated in the
different contexts. The study used Statistical package for Social Scientists (SPSS v 16.0)
which was used for data analysis, Questionnaires and Observation during data collection was
used during the field work study.
Here, different levels of variance analysis on the TAM construct in the context of Auto Teller
Machine (ATM) banking acceptance has been applied. The findings suggested that male or
female, old young, ATM banking customers conceptualized the TAM construct in very
similar ways. These findings allowed us to understand TAMs validity in Technology
Acceptance research in relation to ATM banking in Financial Institutions.




1

CHAPTER ONE;

INTRODUCTION AND BACKGROUND OF THE STUDY;
1.0 INTRODUCTION
This study is intended to ascertain e-banking service perceptions; an evaluation of ATM
usage in Uganda. This chapter presents the background of the study, the statement of the
problem, the objectives of the study, research questions, and significance of the study, the
scope and limitations of the study.
1.1Background of the study
In the traditional methods of banking, the use of bank tellers was the way to provide one on
one contact with the customers. However, the need to provide a 24 hour continuous service
and reduction of congestion in the banking hall,the ATM was brought on board as a way of
improving these services. The need for cost reduction in the use of back-office staff also
prompted the introduction of the ATM service. This brought about a lot of expectations from
both the bank and the customers on the performance of this self-service technology.
Globally ATMs (Automatic Teller Machines) first came into use in December 1972 in the
UK. (http:Wikipedia.org/wiki/automated-teller-mechanic). In Uganda, ATMs were
introduced in the banking sector in 1990s; the first ATM was brought in by SCI/NCR for
Standard Chartered bank in September, 1997 (www.enteruganda.com).
Theoretically customers perception of service consists of two dimensions. Berry and
Parasuraman (1991) distinguish a process and an outcome dimension. Of the five dimensions
of quality, reliability is primarily concerned with the service outcome, whereas the rest are
primarily concerned with the service process. However, all the five dimensions emphasize the
customers perception of the service (functional quality) rather than the service providers
view of how the service should be delivered (technical quality).Gronroos (1990) however
makes the distinction between functional and technical quality. The process of functional
quality refers to how the service is delivered, whereas technical quality which is the outcome
refers to what customers receive (the benefits of using the service). In the case of the ATM,
how cash is processed is a functional benefit, whereas effectiveness, less time spent in an
ATM, easy to use and efficiency over the traditional methods are known as technical benefit.
2

Parasuraman, Berry and Zeithaml (1988) categorized service quality in to five dimensions
namely; reliability, tangibles, responsiveness, assurance, empathy. Reliability refers to the
ability to perform the promised service dependably andaccurately. Relates to the ability to
provide a service as expected by customers in terms of speed (how quick the transaction is
performed), accuracy (how correct is the transaction in terms of money withdrawn) and if the
equipment is operational 24 hours as expected.
ATMs provide customers with numerous benefits such as time and cost savings, greater
control over the service delivery ( Meuter and Bitner, 1998), convenience (Kauffman and
Lally,1994), enjoyment (Dabholkar 1996) and sometimes even spontaneous delight (Bitner el
al;2000). Despite these benefits, some consumers consider ATMs threatening (Curran el al;
2003). Anxiety and low-perceived ease of use are two common barriers inhibiting
consumers usage of ATMs (Meuter et al; 2003). Yet, its in the interest of service
organizations to reduce these barriers as ATMs can reduce costs, increase productivity (
Dahbolkor,1996) and improve competitiveness and market share (Bitner, 1998).
1.2 statement of the problem
The ATM system was originally introduced in the banking sector to reduce on the
congestions in the banking hall, since the ATMs were to provide a 24 hour continuous service
to the people. In spite the installation of automatic teller machines (ATMs) by financial
institutions in the bank premises and other strategic locations in the country, there is still
congestion in the banking halls. A study carried out by (Ssenfuma, 2007) on the relationship
between ATM operations on customer service quality, indicated that 12.5% miss the human
teller smile. The study further revealed that over 67.5% of the customers agreed that ATMs
retard customer relationship; this has been caused by the failure of the ATMs to meet the
expectations of the customers and the adoption of ATM usage being affected by the different
service perceptions.
1.3 The purpose of the study
The purpose of this study was to examine e-banking service perceptions; an evaluation of
ATM usage in Uganda.
1.3.1 The specific objectives
The study was guided by the following objectives,
3

i) To establish the effect of service perception on behavioural intension to use the
ATM system.
ii) To establish the relationship between behavioural intention and congestion in the
banking halls.
iii) To examine the influence of the bank policy and internet accessibility on
behavioural intension to use the actual ATM system.
1.4 Research Questions
The study was guided by the following research questions,
i) What is the effect of service perception on behavioral intension to use the ATM
system?
ii) What is the relationship between behavioral intension to use and congestion in the
Banking halls?
iii) What is the influence of the banks policy and internet accessibility on behavioral
intension to use the actual ATM system?
1.5 The scope of the study
1.5.1 Theoretical scope
The study was carried out based on two theories that is Theory of Reasoned Action(TRA) by
Fishbein and Ajezen 1975 and the Technology Acceptance Model (TAM) pioneered by Davis
in 1989. These two theories were used to analyze and evaluate ATM usage in Uganda.

1.5.2 Geographical scope
The study was limited to financial institutions (banks) with in Kampala.
1.6 Significance of the study
This research will help management of the banking sector analyze the importance of service
perception on customersbehavioral intension to use the ATM. since it has got a great impact
on customers usage of the ATM system.
This research will help bring about improvement of the ATM facility as this will enlighten
the management about the importance of service quality improvement in the ATM system.
4

This research will help improve on the level of technology being provided by the ATM
service system that is in terms of security and options being provided during the transactions
in an ATM. And in addition improve on the maximum amount of money that is allowed to be
withdrawn with a day by the clients.
1.7 The limitations of the study
The research was limited by the negative attitude of same of the respondents during the
answering of the questionnaires. Same respondents attitude kept changing negatively; hence
this greatly affected their response to the different questions asked, making same
questionnaires invalid and not reliable to the study.
The respondents didnt have the time to answer same of the questions in the questionnaires.
This left same of the vital questions un answered during the research study in the field. As,
same of the respondents didnt have the time to answer the questionnaires at all. This reduced
the sample space that was originally planned in the research study.
The different moods of the respondents towards the questions also greatly affected limited the
research. Same respondents have swinging moods depending on the questions asked; this
makes their responses towards the questions unreliable at all, since one is not sure if the
respondent was in his/her mood at that time.










5













Fig 1-1: The Conceptual Framework
Source: Researcher














Perceived Ease of use.
Perceived Usefulness
Behavioral
intention
Congestion

Internet accessibility.
Bank policy
Power availability


6

CHAPTER TWO.
LITERATURE REVIEW

2.1. Introduction
This chapter presents a review of related literature on the study variables especially perceived
usefulness, perceived ease of use and behavioral intention to use.
The Technology Acceptance Model (TAM) is an information systems theory that models
how users come to accept and use a technology. The model suggests that when users are
presented with a new technology, a number of factors influence their decisions about how
and when they will use it.
Technology Acceptance Model (TAM) posits that two particular beliefs, perceived usefulness
and perceived ease of use, can predict ATM actual use. Perceived usefulness and ease of use
are meant to be fairly general determinants of actual use.
According to TAM, perceived usefulness is influenced by perceived ease of use because the
easier a technology is to use, the more useful it can be (Dabholkar, 1996).

The Theory of Reasoned Action (TRA), (Fishbein and Ajezen 1975), posits that perceived
usefulness and perceived ease of use determine an individuals intension to use a system,
with intention to use servicing as a mediator of ATM usage.
According to TRA (Theory of Reasoned Action), the unique behaviour of an individual is
determined by ones behavioral intention (BI) to act on the behaviour, and it is performed in
conjunction with an individuals attitude and subjective norm of the behaviour that is being
performed.
Both the Technology Acceptance Model (TAM) and Theory of Reasoned Action (TRA) have
strong behavioral elements that assume that when same one forms an intention to act, they
will be free to act without limitations.

7

2.2.Perceived usefulness, Perceived ease of use and Behavioral Intention to use on
ATMs
TAM has earlier postulated that two beliefs, known as (i) the Perceived Usefulness and (ii)
the Perceived Ease of Use, determine the attitudes of people toward using a particular system.
Such attitudes together with Perceived Usefulness would subsequently determine use
intention and furthermore, this would lead to the actual use of the system. Studies by Agarwal
and Karahanna (2000) and Venkatesh and Davis (2000) both indicate that Perceived Ease of
Use and Perceived Usefulness affect behavioral intentions through direct and indirect
forms. Other researchers like Szajna (1996) posit that Perceived Usefulness has a direct
influence on intention whereas the Perceived Ease of Use has only an indirect effect on
intention through Perceived Use.

This is similar with the findings of Chen et al. (2003), who found that Perceived Usefulness
appears to be the only construct that has a significant direct influence on intention. On the
other hand, Mallat et al. (2006) suggested that the effect of usefulness on use intention is
dependent on situations where a system is used, even though Perceived Usefulness and
Perceived Ease of Usefulness are the primary predictors concerning beliefs about use
intentions. In contrast, a study by Wu and Wang (2005) revealed that ease of use and
usefulness was both significant factors that affect the use of a technology generally. Hence, a
research model and associated hypotheses below were developed to guide this study. In the
Malaysian context, it should be noted that researches on technology use have demonstrated
that the Perceived Ease of Use and Perceived Usefulness are important predictors on the
decision to not only adopt a technology but also to continue to use that technology (Guriting
and Ndubisi, 2006; Ignatius and Ramayah, 2005; Ramayah, 2005, 2006a, 2006b; Ramayah
and Jantan, 2004; Ramayah et al., 2005).

A significant body of TAM studies (e.g. Davis, 1989; Mathieson, 1991; Adams et al., 1992;
Segars and Grover, 1993; Sjazna, 1994; Igbaria et al., 1997) has shown that perceived
usefulness and perceived ease of use are determinants of usage. Martocchio (2005) pointed
out that customers system use can be predicted reasonably well from their intentions,
intervened between usefulness and behaviour intention to use. Malone (1990) in her study
proved that perceived usefulness influences ones emerged the major determinant of ATM use
acceptance though behavioral intention to use had a significant effect beyond perceived
8

usefulness. It has been noted that customers intention to use and ease of use have got a
critical impact on successful use of the ATM system (Venkatesh, 1996). He further asserts
that, if customers are not willing to accept a particular system, it will not bring full benefits to
the bank. The more accepting of a system the customers are, the more willing they are to
make changes in their time and effort to use the system.

The Theory of Reasoned Action (TRA), (Fishbein and Ajezen 1975), posits that Perceived
Usefulness and Perceived Ease of Use determine an individuals intention to use a system,
with intention to use servicing as a mediator of ATM usage. Perceived Usefulness is yet seen
as being directly impacted by Perceived Ease of Use. In a bid to extend the TAM model three
approaches have been taken into consideration, say by introducing additional or alternative
belief factors, by introducing factors from related models and by examining antecedents and
moderators of Perceived Usefulness and Perceived Ease of Use (Wixam and Todd, 2005).
Both the TAM and TRA have strong behavioral elements that assume that when same one
forms an intension to act, they will be free to act without limitation. In reality constraints such
as limited ability, time, environment or organization limits and unconscious habits will limit
the freedom to act. Perceived Ease of Use and Perceived Usefulness predict the attitude
towards the system, which in turn predicts behavioral intention to use the system. which in
turn predicts use of the ATM.

Fishbeins and Azjens (1975) theory of reasoned action provides the theoretical basis for
TAM. Fishbein and Ajzen hypothesized that an individuals behaviour depends on his or her
intention to use the system. The individuals evaluation with respect to the act, and the
persons subjective norm or perception of the normative pressures regarding the behaviour.
Davis (1986, 1989) adopted the belief, attitude-intention-behaviour sequence to explain user
acceptance of information technology.

According to Davis et al. (1989), TAM was intended to provide an explanation of the
determinants of system acceptance that is general, capable of explaining user behaviour
across a broad range of end-user computing technologies. Davis (1986) proposed that
perceived usefulness and perceived ease of use predict usage of the system. With theoretical
support from various theories and models including expectancy theory, self-efficacy theory,
cost-benefit research, innovation research, and the channel disposition model, TAM
9

postulates that computer usage is a function of the end-users behavioral intention to use the
system.

Davis and Davis et al proposed TAM to address why users accept or reject information
systems. Their model is an adaptation of the theory of reasoned action proposed by Fishbein
and Ajzen to explain and predict the behaviors of people in a specific situation. TAM is to
provide a basis for tracing the impact of external variables on internal beliefs,attitudes, and
intentions. It suggests that perceived ease of use and perceived usefulness are the two most
important factors in explaining system use.

Behavioral intention was jointly determined by a persons attitude toward using the system as
well as the end-users perception of the usefulness of the system. TAM also postulates that
perceived usefulness is influenced by perceived ease of use and external variables. External
variables that influence perceived usefulness include features of the system, training,
documentation, demographic characteristics of end-users, and end-user support.

TRA and TAM propose that external variables intervene indirectly, influencing attitude,
subjective norms, or their relative weight in the case of TRA, or influencing perceived ease of
use and perceived usefulness in the case of TAM. Behavioral intention to use is a common
construct in both TRA and TAM, and Davis usedFishbein and Ajzens method to measure
them. Davis chose not to keep the variable subjective norms, because he estimated that it had
negligible effect on Behavioral intention. In TAM2, Venkatesh and Davis reconsidered this
choice.

Perceived usefulness, perceived ease of use are strong determinants of behavioral intention to
adopt ATM banking system. Also an indirect effect of computer self-efficacyand prior
general computing experience on behavioral intention through perceived usefulness
perceived ease of use. The Technology Acceptance Model pioneered by Davis (1989)
advances the TRA by postulating that perceived usefulness, perceived ease of use are key
determinants that inevitably lead to the actual usage of a particular system. Perceived ease of
use has a direct effect on both perceived usefulness and technology usage (Adams, Nelson &
Todd, 1992; Davis, 1989).

10

Having discussed technology acceptance in light of the TAM model and other modified
theories relating to technology acceptance with all its constructs, its necessary we discuss
why some customers reject ATM system use in Commercial Banks. As regards the review of
some of the most popular theory, the focus is basically on elements that encourage
acceptance of technology. There is scarcity of theory on why customers do not accept ATM
system use. The review of the literature and the theory speaks to the need for further research
in this area and for the need to expand upon current theories which focus solely on
technology acceptance. TAM and TAM2, TRA, and TRB theories, as already described are
the prominent theories which have established a base of academic knowledge on technology
acceptance.

All of the literature is derived from the concept of intention based theory; intention that when
exercised allows an individual to adopt technology. Yet what then is the theory that causes an
individual to reject technology? If intention and attitude remain at the heart of behaviour, we
must scrutinize the motives that result in rejection of technology in order to provide a
balanced view of why someone would reject using ATM banking system. On the surface it is
one of the most logical and convenient technological devices that one could utilize. Ease of
use, convenience and personal security are the hallmarks of ownership of this technology.
Yet there are a proportion of Commercial Bank customers who choose to reject this
seemingly beneficial service. What are the intentions and attitudes that drive the behaviour of
rejection and resentment?

(Goode, 2005) asserts that, acceptance is not the opposite of rejection. Technology rejection,
as a topic, has been largely ignored in the research literature. Goode produced a working
paper that looked at the current literature on technology rejection. He calls for the
advancement of further research in order to develop an adequate understanding of why
organizations and end-users reject information technology systems. From that research,
existing theory can be expanded or new theory developed, as to why technology is rejected.

There exists a general belief in the IT community that technology adoption leads to
organizational success as well as the success of end-users. Yet not everyone adopts
technology and the reasons why do not appear to be well researched or understood. There is a
call for new thinking and new approaches to the adoption problem. Research has overlooked
the thinking that rejection of technology is in fact an alternative to acceptance.
11

Understanding why people accept or reject information systems has proven to be one of the
most challenging issues. (Davis et al. 1989) This same statement can apply to individuals
acceptance or rejection of ATM banking system in Commercial Banks.

As Davis (1989) noted, future technology acceptance research needs to address how other
variables affect usefulness, ease of use, and user acceptance. However, factors affecting the
acceptance of a new IT are likely to vary with the technology, target users, and context(Moon
and Kim, 2001). Recent research has indicated that trust has a striking influence on user
willingness to engage in online exchanges of money and personal sensitiveinformation (e.g.
Hoffman et al., 1999; Friedman et al., 2000). Therefore, PEU and PU may not fully reflect
the users intention to adopt Internet banking, necessitating a search for additional factors that
better predict the acceptance of e- banking.

2.3. Perceived usefulness and behavioral intention to use ATM
Perceived Usefulness is the degree to which an individual believes that using a particular
system would enhance his or her job performance (Al-Gahtani, 2001; Davis, 1993; Mathwick
et al., 2001). Another study by Tan and Teo(2000) indicates that Perceived Usefulness is an
important factor in determining the adaptation of innovations. As observed by Bhattacherjee
(2002), a persons willingness to transact with a particular system is already considered as
Perceived Usefulness. It shows that user behaviour is determined by perceptions of
usefulness and the ease of use of the technology (Adams et al., 1992). According to Gong and
Xu (2004) he defines perceived usefulness as the users subjective probability that using a
specific application system will increase his or her expectations. Awamieh R. &Fernandes, C
(2006) added that perceived usefulness is the degree to which a potential customer views
ATM banking as offering advantages over previous ways of performing the banking
transactions.

Behavioral intention to use is the measure of the strength of ones intention to perform a
specified behaviour (Malhotra, Y 1999). According to Chan, (2004) underlying processes in
which a customer engages when he/she adopts induced behaviour may be different.He
presented three different processes that greatly affect customers behaviour: compliance:
when an individual adopts the induced behaviour not because she believes in its content but
with the expectation of gaining rewards; Identification: when an individual accepts influence
12

because she wants to establish a satisfying self-defining relationship to another person and;
Internalization, when a customer accepts influence because it is congruent with her value
system. By distinguishing between these processes, one ascertains that behavioral intention to
use a system is influenced by perceived usefulness.

Previous researches have provided evidence of the significant effect of Perceived usefulness
on behavioral intention to use (Agarwal& Prasad, 1999; Davis et al., 1989; Venkatesh, 1999;
Venkatesh, 2000; Venkatesh& Morris, 2000; Chau& Hu, 2001; Ramayah et al., 2003;
Pikkarainen, et al., 2004). Perceived usefulness has a direct effect on behavioral intention and
above attitude. The perceived usefulness behavioral intention relationship is strongly based
on the idea that, people form intention toward behaviors they believe will increase their
system use, over and above whatever positive or negative feeling may be evoked toward the
behaviour. Hence, the Perceived usefulness -behavioral intention relationship in TAM
represents the outcome of direct effect, hypothesizing that people form intention toward using
ATM system based on a cognitive appraisal of how it will improve their ATM system use.

Davis original model explains perceived usefulness and behavioral intention to use in terms
of social influence and cognitive instrumental processes. The extended model was tested in
both voluntary and mandatory settings. The results strongly supported model and the authors
were able to explain 60% of their adoption model using this updated version of
TAM(Venkatesh and Davis 2000). The study highlights social influence through subjective
norm, defined as persons perception that most people who are important to him think he
should or should not perform the behaviour in question, significantly influences perceived
usefulness. Cognitive factors also play an important role. For example, the greater the
perceived system relevance, defined as the individuals perception regarding the degree to
which the target system is applicable to his or her job) of a new system is, the more
important output quality (defined as the consideration of how well the system performs
those tasks) becomes. (Venkatesh, Davis, 2000).

Venkatesh and Davis (2000) presented theoretical extensions to the technology Acceptance
Model (TAM) (Davis, 1986, 1989). Their new model, TAM2, explains perceived usefulness
in terms of cognitive and social influence processes. Vankatesh and Davis suggested job
relevance, one of the cognitive processes that demonstrated a statistically significant
relationship with perceptions of usefulness of technology and suggested this construct may be
13

analogous to construct of person-job-fit (Meyer & Allen, 1991). From its original model,
TAM has evolved over time. The notion of time has also been included in the analysis of the
factors that influence use. Research has shown that the influence of some factors on intention
to use ATM system influence perceived usefulness. Presently, the works of (Venkatesh&
Davis, 2000) on the Technology Acceptance Model (TAM) has focused on developing
theoretical extensions that explain perceived usefulness, in particular, in terms of cognitive
and social influence processes.

2.4. Behavioral intention and ATM System
Technology adoption (or usage) decisions have been typically characterized by a strong
productivity orientation (Venkatesh and Brown, 2001). The Automatic Teller Machine, once
considered a luxury, has become the conventional communication tool. The contents that
used to deliver limited information are now able to provide a variety of information and
banking services such as withdrawing, deposit, inquiries (Cheong, J., and Park, M.,
2005).with the rapid increase of the ATM usage, the growing penetration of wireless devices,
and the rapid technological innovation, wireless technology shifts the world of wired internet
to the wireless mobile internet. ATM is expected to deliver great business opportunities to
market participants. The key factor of the success is dependent on understanding the concerns
of customers and identifying the determinants that leads to individuals behavioral intention
to adopt the ATM.

In TAM, similar to TRA, an individuals belief determines the attitude toward using the
system and, in turn, the attitude develops the intention to use. Finally, this intention
influences the decision of actual system usage. These causalities are broadly studied and
accepted (Chen et al., 2002; Suh and Han, 2002; Morris and Dillon, 1997; Teo et al., 1999).

Actual system use refers to (how often) and the volume of system use (how much) by the
user (Davis, 1989). Davis asserts that ones behavioral intention influences actual system
usage. This is due to the internalization and identification that may influence behavioral
intention directly via compliance. Its further argued that, once end users of the system are
not informed or educated about the need or relevance, this will greatly influence their
behavioral intention to use.

14

Technological Acceptance Model (TAM) has been tested in many studies such as (Davis etal,
1989; Mathieson, 1991; Adams et al., 1992; Davis, 1993; Segars and Grover, 1993; Taylor
and Todd, 1995), and it has been found that an individuals behavior to use a system largely
explains their intentions. Consequently, (Methieson, 1991) previous studies have found that
TAM consistently explains a significant amount of the variance in usage intentions and
behaviour. The model puts it that behavioral intention to use has a significant impact on a
users ability to actually use a system. Behavioral intention to use the system is modeled as a
function of actual system use and perceived usefulness (Davis et al., 1989 Taylor and Todd
1995).
The Theory of Reasoned Action has been considered with much attention as it gives a clear
explanation between behavioral intention to use and actual system use with regards to
adoption of technology. Theory of reasoned action (TRA) is a much researched area that has
been applied across a number of areas. The authors, Ajzen and Fishebein ascribe that their
theory applies to behavioral intention to use. Several researchers have used this theory
extensively to better understand users behaviors in technology adoption.

According to TRA, the unique behaviour of an individual is determined by ones behavioral
intention (BI) to act on the behaviour, and it is performed in conjunction with an individuals
attitude and subjective norm of the behaviour that is being performed. Attitude is the result of
what the person believes about the action that is being performed and the expected result.
Subjective norm is the result of an individuals response to the perceived expectations of his
or her peer group and his belief that he must comply with those expectations. TRA addresses
a persons internal psychological variables by which multiple external variables are studied.
Information technology researchers have relied heavily on this theory to lay the groundwork
for a better understanding of why users adopt technological innovations.

Intentions to perform behaviors of different kinds can be predicted with high accuracy from
attitudes toward the behavioral subjective norms and perceived behavioral intentions; and
these intentions, together with perceptions of behavioral control, account for considerable
variance in actual ATM use. Attitudes, subjective norms and perceived behavioral control are
shown to be related to appropriate sets of salient behavioral, normative, and control beliefs
about the behaviour, but the exact nature of these relations is still uncertain by (IcekAjzen
1985, 1987).

15

In addition to that, Ajzen theory is rooted in the psychological exploration of human
behaviour and all of the intricacy that is involved in understanding a persons behaviors.
Concepts dealing with behavioral intention to use such as social attitude and personality trait
have played an important role in these attempts to predict and explain actual system use
(Ajzen, 1988; Campbell, 1963; Sherman & Fazio, 1983). Behavioral intention to use the
ATM system is determined by the intention to perform. The behaviour which is predicted by
three factors: attitude towards the behaviour, subjective norms, and perceived behavioral
control that eventually determines ATM system use.

2.5. Perceived ease of use and perceived usefulness
Perceived ease of use refers to how clear and understandable interaction with the system is,
ease of getting the system to do what is required, mental effort required to interact withthe
system, and ease of use of the system (Ndubisi et al., 2003). Rogers (1962) theorized that
Perceived Ease of Use demonstrates the degree to which an invention is seen as being not too
difficult to understand, learn or operate. Perceived Ease of Use in Technological Acceptance
Model has been defined as the extent to which a person believes that using a certain
technology will be free of effort (Davis, 1989). Perceived Ease of Use has been demonstrated
in previous studies to influence behaviour, either directly or indirectly via Perceived
Usefulness.


However, previous researchers have not found conclusive evidence about whether the
construct in TAM would have a significant influence on the PU of technology (e.g. Keiland
Brenner, 1997; Lederer et al., 2000; Straub et al., 1997; Teo et al., 1999). Some studies have
linked Perceived ease of use to the success and quality of an information system (Seddon,
1997) as well as to customer satisfaction (Wang et al., 2001). In fact, Brown (2002) argued
that PU is not a major influence on usage but more on the external variables, which would be
more likely to affect Perceived Ease of Use.

In addition, Davis et al. (1989) proposed that perceived ease of use is an antecedent of
Perceived usefulness. Results from previous research also revealed the significant effect of
perceived ease of use to perceived usefulness (Kleijnen et al., 2004; Wang et al., 2003; Davis
et al., 1989). Huang,J. Linn Y., and Chuang S. (2006) posits that two particular
16

behavioralbeliefs, perceived usefulness (PU) and perceived ease of use (PEOU), are two
fundamental factors for predicting user acceptance, and that the effect of external variables on
intention are mediated by these two key beliefs (Adams et al., 1992; Davis, 1989; Davis et
al., 1989; Mathieson, 1991). PU is defined as an individuals perception that using a new
technology will enhance or improve her/his performance (Davis, 1989, 1993).

Perceived ease of use (PEOU) is defined as an individuals perception that using a new
technology will be free from effort (Davis, 1993). Perceived Ease of Use is hypothesized to
be a predictor of Perceived Usefulness. Moreover, both Perceived Usefulness and Perceived
Ease of Use are affected by external variables (Hu et al., 1999; Venkatesh et al., 2002; Wang
et al., 2003). Furthermore, Perceived Usefulness and Perceived Ease of Use have a positive
effect on attitude. Unlike in TRA, the subjective norm is not a determinant of behavioral
intention in TAM; instead, BI in TAM is affected only by Perceived Usefulness and attitude
(Davis, 1989). Perceived Ease of Use is normally related to the intrinsic characteristics of IT
(ease of use and ease of learning the technology), whereas the Perceived Usefulness to the
user relates to extrinsic factors like efficiency and effectiveness. As noted by Agarwal and
Prasad (1997), previous researchers adopted TAM because of its parsimony and the wealth of
empirical support.

Basing on what previous studies say (Awamleh&Fernandes, 2005) support for one or two of
the constructs was not provided thus a theoretical overlap between these two constructs i.e.(
perceived ease of use and perceived usefulness) whereas factor analyses have provided
support for this conclusion. Perceived usefulness and perceived ease of use significantly
contribute to an individuals behaviour (Hung 2004). According to Rogers (1995) the
perceived ease of use characteristics is supposed to provide the framework of how potential
adopters perceive usefulness of an innovation.

Perceived ease of use is defined as the individuals perception that using the new technology
will be free from efforts (Davis, 1989, 1993). Apply this to this researchcontext; perceived
ease of use is the customers perception that banking using ATM willinvolve a minimum
effort. Whereas perceived usefulness referred to customersperception regarding the outcome
of the ATM banking system, perceived ease of userefers to perceptions regarding the process
leading to the final ATM banking use.According to TAM, ease of use has dual effect, direct
as well as indirect, on customers intention to bank using ATM system. The indirect effect on
17

intention is through perceivedease of use and the direct effect is through perceived
usefulness.

By looking at the prevailing theory in the area of technology adoption, The Technology
Acceptance Model (TAM) is an information systems theory that models how users come to
accept and use a technology. The model suggests that when users are presented with a new
technology, a number of factors influence their decisions about how and when they will use
it.

Perceived usefulness defined by Fred Davis as the degree to which a person believes that
using a particular system would enhance his or her performance. Another factor presented
by Davis deals with perceived ease-of-use which is also defined by Davis as the degree to
which a person believes that using a particular system would be free from effort. (Davis,
1989) The technology acceptance model was developed by Fred Davis and Richard Bagozzi.
(Bagozzi et al., 1992; Davis et al, 1989). It was an extension of the work of Ajzen and
Fishbeins theory of reasoned action. (TRA) TRA is an important model from social
psychology that focuses on explaining the relationship between perceived ease of use and
usefulness.

TAM replaces many of the TRA attitude measures with the technology acceptance measures,
ease of use, and usefulness. TRA and TAM, both have strong behavioral elements, assume
that when someone forms an intention to act, that they will be free to act without limitation.
Within the normal operating environment there are many constraints, such as limited ability,
time constraints, environmental or organizational limits, or unconscious habits which will
limit the freedom to act (Bagozzi et al., 1992) The mere fact that new technologies such as
ATM systems are complex and an element of uncertainty exists in the minds of decision
makers with respect to the successful adoption of them, people form attitudes and intentions
toward trying to learn to use the new technology prior to initiating efforts directed at using.
Behavioral intentions to use may be ill-formed or lacking in conviction or else may occur
only after preliminary striving to learn to use the technology evolve. Thus, actual usage may
not be a direct or immediate consequence of such intentions. (Bagozzi, Davis, Warshaw,
1992).

18

TAM posits that two particular beliefs, perceived usefulness and perceived ease of use, can
predict ATM actual use. Perceived usefulness and ease of use are meant to be fairly general
determinants of actual system use. Davis et al. (1989) described them as belief sets that are
meant to be readily generalizable to different system use. They argued that the ability to take
well-formed measures of the determinants of user acceptance early in the development
process can have an impact on actual system use acceptance by enabling developers to weed
out bad systems, refine the rest, and generally cut the risk of deliveringfinished systems that
get rejected by users.

Davis provided strong theoretical support for his perceived usefulness and ease-of-use
instrument(s) and used a rigorous development methodology (Davis et al., 1989). The
instruments are widely regarded and have received considerable attention by researchers
(Adams, Nelson, & Todd, 1992; Chin & Todd, 1995; Hendrickson, Massey, &Cronan,
1993; Igbaria, Guimaraes, & Davis, 1995; Mathieson, 1991; Segars& Grover, 1993; Straub,
Limayem, &Karahanna-Evaristo, 1995; Subramanian, 1994). Davis (1989), Adams et al.
(1992), and Subramanian (1994) have suggested that these instruments might be used broadly
within and across organizations to evaluate technologies, make comparisons between users,
and predict actual usage.

Subramanian (1994) found that the perceived usefulness and ease-of-use constructs were
robust and concluded that information systems researchers can use these instrumentsin
varying technological and organizational contexts. Software packages are tools that are used
for the purposes/tasks of the end-user. The concept of "usefulness" implies a purpose.
Applications can be considered "useful" if they contribute to accomplishing the end-users
purpose, and "easy to use" if the effort required to make use of the application is modest
relative to the end-user's frame of reference. Goodhue (1992) referred to purpose as the end-
users task. He argued that task characteristics influence behavioral intention to use and in the
end actual system use.

Past research provides evidence of the significant effect of perceived ease of use on usage
intention either directly or indirectly through its effect on perceived usefulness (Agarwal&
Prasad, 1999, Davis et al., 1989, Venkatesh, 1999; Venkatesh2000; Venkatesh&Morris,
2000; Ramayah&Aafaqi 2004, Ramayah 2006). Information systems that users perceive
easier to use and less complex will increase the likelihood of its adoption and usage (Teoetal.,
19

1999). Perceived ease of use has been shown to influence behaviour for example information
technology adoption through two causal ways: (1) a direct effect on behaviour intention and
(2) indirect effect on behaviour intention via perceived usefulness.

Perceived ease of use positively influences behaviour intention. Past research by Hong et
al.,(2001), Gefen et al.,(2003), Heijden (2003), Venkateshet al.,(2003) and Heijden(2003)
also found Perceived ease of use and perceived usefulness to influence behavioral intention .
Perceived usefulness describes the perceptions of an individuals innovativeness. It has been
seen to have a great influence on ones behaviour reflected in terms of compatibility,
feedback, relative advantage and subjective norms. Perceived ease of use however describes
the individuals perception of how easy the innovation is to learn and use. This includes
support, complexity, and change. The model postulates that the users perceptions lead to
adoption behaviors that is an outcome of both perceived ease of use and perceived usefulness
that will eventually determine ATM system use.

Perceived ease of use and perceived usefulness study show that, usefulness makes an
individual underestimate the difficulty associated with using the technology since they simply
enjoy the process its self and do not perceive it to be arduous (Vankatesh, 2000).
In addition to that, studies based on Decis motivational theory (Deci, 1975) or Davis et
al.s work, on motivational model of technology acceptance (Davis et al 1992). The reason
behind this is that, systems that are perceived as easier to use are more likely to be perceived
as useable (Toe et al., 1999). Bandura (1986) shows the relationship between perceived ease
of use and perceived usefulness by showing self-efficacy as having a significant impact of the
effect : therefore , perceived ease of use (self-efficacy) is supposed to have a significant
impact on perceived usefulness.

However, its possible to argue that perceived ease of use influences intrinsic motivation,
rather than intrinsic motivation influences perceived ease of use. Given the focus on the TAM
model, an outcome and process expectancy model, intrinsic motivation is expected to
influence perceived ease of use as well as perceived usefulness (Vankatesh, 2000).

Applying the definition of perceived usefulness to our research context, as new information
systems are being introduced in place we classify ATM banking system, and as the
individuals performance the outcome of the ATM banking system use. Then, perceived
20

usefulness refers to customers perception that using ATM as a banking system enhances the
outcome of their banking needs. These perceptions influence customers attitude toward
ATM baking system and their intention to bank using ATM system. TAM posits a weak
direct link between perceived usefulness and attitude and a strong direct link between
perceived usefulness and behavioral intention to use (Davis et al., 1989). This was explained
as originating from customers intending to use ATM banking system because it was useful,
even though they did not have a positive affect toward using it. In addition to that, there is a
very strong link between perceived ease of use and usefulness that determines customers
attitude towards using ATM banking system.

According to TAM, perceived usefulness is influenced by perceived ease of use because the
easier a technology is to use, the more useful it can be (Dabholkar, 1996). There is also
extensive research in the IS community that provides evidence of the significant effect of
perceived usefulness on usage intention (Agarwal and Prasad, 1999; Davis et al., 1989; Hu et
al., 1999; Jackson et al., 1997; Venkatesh, 1999, 2000; Venkatesh and Davis, 1996, 2000;
Venkatesh and Morris, 2000). The ultimate reason people exploit Internet banking systems is
that they find the systems useful to their banking transactions.

Service excellence is the customers appreciation of delivered promises and performed
functions. This is yet another factor to consider in a way that, service excellence operates as
an ideal standard against which judgments are ultimately formed (Holbrook, 1994). If ATM
banking meets this ideal by enabling the customers to accomplish the banking tasks he/she
has set out to perform then customers will judge the ATM banking performance positively
(Mathwick et al., 2002). This leads to positive perceptions regarding perceived usefulness of
ATM banking system.

21

2.6. Perceived ease of use and behavioral intention to use ATM
Perceived ease of use of a particular system means a good system in the minds of the
customer, therefore he/she feels good about the system thus influencing the customers
behavioral intention to use it. Gong and Zu (2004) defines perceived ease of use as thedegree
to which a prospective user expects the target system to be free of effort. A system that is
perceived to be easy to use will automatically influence ones behaviour to use it (Succi and
Walter, 1999).

Extensive research over the past decade provides evidence of the significant effect of
perceived ease of use on usage intention, either directly or indirectly through its effect on
perceived usefulness (Agarwal and Prasad, 1999; Davis et al., 1989; Hu et al., 1999; Jackson
et al., 1997; Venkatesh, 1999, 2000; Venkatesh and Davis, 1996, 2000; Venkateshand
Morris, 2000). Moreover, Guriting and Ndubisi (2006) found that perceived ease of use had a
significant positive effect of behavioral intention to use online banking. In order to prevent
the under-used useful system problem, Internet banking systems need to be both easy to
learn and easy to use. Internet technologies that are easy to use are less threatening to the
individual (Moon and Kim, 2001).

Likewise, bank customers are likely to adopt online banking when it is easy to use (Guriting
and Ndubisi, 2006). The study conducted by Ramayah et al., (2003) found that perceived ease
of use has proven to have significant impact on intention to use internet banking. The result
corroborates the findings by Ramayah et al. (2002), Adams et al. (1992) and Davis et al.
(1989).

Considering predictors of ATM usage could serve a number of customers by helping them to
recognize how to promote that usage (Lederer, 2000). The TAM is based on Fishbeinand
Ajzens theory of reasoned action posits that an individuals attitude towards carrying out that
behaviour and an evaluation of the value of each of those outcomes influences behavioral
intention to use the system.

22

In the TAM model, perceived ease of use positively affects perceived usefulness. Moreover,
perceived ease of use and perceived usefulness positively affect the attitude towards an
information system, and further, positively affect behavioral intention to use and accept of the
information system. Bandura, (1986) suggests that perceived ease of use plays an important
role in affecting motivation and behavioral intention to use a given system. The individuals
perceived ease of use to attain the standards they have been pursuing has an impact on
individual behavioral intention to use. Therefore, individuals may be more likely to undertake
behaviors they believe will result in valued out comes than those they see as having un
favorable consequences.

Its further believed that for any system put in place, perceived ease of use is an important
determinant of behavioral users intention of acceptance and usage behaviour. In addition to
that, a study by Clarke (2000) shows that, among the factors affecting the use of Automatic
Teller Machine banking system is a persons perceived ease of use thus in the end determines
ones behavioral intention to use. Technological Acceptance Model is believed to be the most
robust, parsimonious, and influential model in explaining systems adoption behaviour in a
way that perceived ease of use serves as a basis for attitudes towards using a particular
system, which in turn determines the intention to use, and then generates actual system use
behaviour.

Although many studies on perceived ease of use have received a fairly attention from
previous researches, there is no research that explores the factors influencing behavioral
intention to use ATM system. Furthermore, the TAM model was originally created toexamine
information system adoption in organizations. Considering Kelmans frame work, Davis et al.
(1986) social behaviour influences may affect behavioral intention indirectly via attitude due
to internalization and identification processes, or influence behavioral intention directly
through compliance.

The most effective tool to describe the relationship between perceived ease of use and
behavioral intention to use the system is Davis (1986). As this model explains usage
behaviour, it further states that beliefs influence attitudes, which further leads to intentions
and finally behavioral intention to use. TAM goes ahead to explain perceived ease of use as
the degree to which a person believes that using a particular system would be free from
23

effort. Perceived ease of use is consistently in literature review as a significant factor in
Influencing behaviour intention to use that finally determines actual ATM system use.



















24

CHAPTER THREE
3.1 Introduction
This chapter is about the methodological research design that was used in the process of
conducting the research study. It specifically identified the processes of gathering, analyzing
of data that were used in the study. This chapter begins with the research design, which is a
description of the research approach. It also looks at the data collection tools that were used
in the course of the research. It also presents the data collection instruments that were used in
the process of data collection and methods that were used to maintain the validity of the
research and interpreting of data going to be used for the research. It also covered the area of
study, research designs, sampling strategy, population of the study of 0.775 and the methods
of data collection.
3.2 Area of Study
The study was held at the financial institutions in Kampala city, namely; Stanbic bank,
Centenary, Equity, Barclays, Standard Chartered, and Baroda among the other banks in
Kampala city. The study aimed at the users of the ATM system in the different banks.
3.3 Research Design
Kothari (2003) defined a research design as an arrangement of conditions for data collection
and analysis of data in a way that aims to combine relevance with the research purpose. Its a
conceptual structure within which research is conducted. Bell (1997), notes that the research
design outlines the basis for making interpretation of data and establishes the format for
detailed steps to follow when conducting the study. It is the plan which shows how data will
be collected and analyzed. The researcher used a descriptive design which helped her to
evaluate ATM usage in Uganda, organize, describe and explain the detailed findings in the
research. The term descriptive research refers to the type of research question, design, and
data analysis that will be applied to a given topic. The type of question asked by the
researcher ultimately determines the type of approach necessary to complete an accurate
assessment of the topic at hand.
25

3.4 Target Population
Kombo (2002) defines population as a group of individuals or items which are taken for
measurement. The research targeted 40 ATM holders from the different banks in Kampala as
they were directly linked to the study. They included students, unemployed, employed, and
self-employed ATM holders.
3.5 Sampling Method / Sampling Size
Enron (1998) defines sampling as a deliberate process of selecting apart of population for
study with the intention of generalizing the findings to the whole population. Purposive
sampling was used to collect data from only ATM holders and users. Patton (1990) says that
logic and power lying selecting rich cases for depth study.
The sample size consisted of 31 respondents from the population of over 10,000 ATM
holders. (13 employed 9 self-employed, 2 unemployed and 7 students).
3.6 Data Collection Methods
The researcher used various methods to collect both primary and secondary data for the
study. As such primary data was collected through the use of questionnaires, Interview and
Observation methods and secondary data was collected through the use of Document analysis
method. Under this method both published and grey literature materials such as research
papers, journals and internet resources and related sources was reviewed as explained below.
The methods are as follows;
3.6.2 Questionnaire
According to Mbaaga (2000:25), questionnaires are defined as a set of related questions
designed to collect information from respondents on an intended topic. These maybe
structured or unstructured, or the researcher can decide to use them both. Questionnaires need
factual answers that call for facts as well as for explanation about the usage of the ATM
system. Questionnaires were distributed to employed staff, unemployed, self-employed and
students in the different banks in Kampala.The structure of the questionnaire had a linear
scale of Strongly Agree (5), Agree (4), not sure (3), Disagree (2) and Strongly Disagree (1).

26

3.6.3 Observation
Observation can be defined as a purposeful examination of research phenomenon for
purposes of gathering data. It involves the use of sensory organs to make sense of the study
phenomenon. It allows one to collect data in a purposeful and systematic way about the
behavior of an individual or a group of people at a specific time or place.
3.7 Data Collection Instruments
Several research instruments were constructed to aid the researcher to collect data
3.7.1 Questionnaire guide
The questionnaire is the most widely used technique in data collection. It consists of written
questions to which the respondent responds to in writing (Busher and Hunter, 1980). The
guide was used to find out the users perceived usefulness and perceived ease of use, of the
ATM system. (See Appendix )
3.7.2 Observation guide
It constituted several guidelines which the researcher used to assist herself in observing all
the details concerning the research. The researcher used her naked eyes to examine the
phenomena and hence recorded the findings accordingly.
3.8 Research Procedure
A research procedure refers to a particular course of action intended to achieve a research
result. Bell (1997), states that whatever procedure for collecting data is selected, it should
always be examined critically to assess what extent it is likely to be reliable and valid. An
introductory letter from UCU, Faculty of Business and Administration, was obtained to
authorize the researcher to conduct research at the different financial institutions (banks). The
researcher re- tested the instruments to see if they can collect the right information before a
full scale data collection exercise was embarked on.

27

3.9 Data Analysis and Presentation
Data analysis is the process which involves the way data will be presented, coded and
collected in an understandable, systematic and clear way. All data collected was edited to
ensure accuracy and consistency. It involved preparation of the collected data into useful,
clear and comprehensive information. It was based on the researchers objectives and
questions the data was presented in form of explanatory notes. The researcher used SPSS data
analysis software to analyze quantitative data.
3.10 Ethical Considerations
Mbaaga (2000) considers ethical considerations as explanations of how the study will be
conducted according to the accepted norms and regulations of the discipline of the researcher.
The information taken from the respondents was strictly confidential and it was used only for
purposes of this research. The researcher got permission from the respondents before writing
down what they had mentioned. The research was also strictly for educational purposes.
3.11 Limitation of the Study
The researcher faced one limitation;
The time constraint: the researcher was limited by the time as well as the respondents delay in
filling out the questionnaires however this did not prevent the study from being carried out.
In this chapter, the researcher discussed the area of study, the research design, the target
population, the sampling method, the data collection methods and instruments, data analysis
and presentation and the ethical considerations.




28


CHAPTER FOUR
Response rate of the study;
The study had a response rate of 0.775. This was a combination of both male and female,
working class and the unemployed in Uganda. And this consisted of respondents between the
ages of 20years and above.
4.1 Back ground data of the Respondents
The study analyzed the back ground composition of respondents. The back ground
composition included, age, sex, marital status, education level, employment status, how long
one owned an ATM, type of account held and the type of bank one went to for his/her
transactions.










29

Table 1-4: Back Ground Research Data
VARIABLE FREQUENCY PERCENTAGE (%)
Age

20-29
30-39
40 and above
21
5
5

67.7
16.1
16.1

Sex

Female
Male
16
15

51.6
48.4

Marital status

Married
Not married
12
18

38.7
58.1

Educational level

Secondary
University
Tertiary
Others
4
19
5
3

12.9
61.3
16.1
9.7

Employment status

Employed
Self-employed
Un employed
Student
13
9
2
7

41.9
29.0
6.5
22.6

How long have you owned
your ATM

1 year
2 years
3 years
4yrs and above
2
8
4
17

6.5
25.8
12.9
54.8

Type of account held

Current
Saving
Fixed
Others
5
20
5
1
16.1
64.5
16.1
3.2

Where do you carry out
your transactions
Centenary
Stanbic
Equity
Barclays
Standard chartered
Others
5
10
3
5
3
5
16.1
32.3
9.7
16.1
9.7
16.1
Source: primary data
The study revealed that majority of the respondents where in the age bracket of 20-29 years-
67.7%, of these 51.6% were female and 48.4% male and 58.1% were not married.
Furthermore educational level, employment status, access to ATM, account and where the
30

transactions are made (banks), was evaluated and the findings were as following 61.3%,
41.9%, 54.8%, 64.5% and 32.3% respectively.This indicated that majority of the respondents
are youths who are determine in pursuing their careers rather than getting married.
4.2. Response on Perceived Usefulness of the Auto Teller Machines (ATM)
The table 2-4, below shows how the respondents perceived the usefulness of Auto Teller
Machine (ATM) system/ technology in their day to day life.
Table 4-2: Perceived Usefulness of Auto Teller Machines (ATM)
Variables SD f (%) D f (%) NS f (%) A f (%) SA f (%) Mean St.D
ATM enables me to utilize banking services more quickly 0 0 2(6.5) 7(22.6) 22(71.0) 4.65 .608
ATM enables you to bank or withdraw money many
times as one wishes
0 5(16.1) 4(12.9) 11(35.5) 11(35.5) 3.90 1.076
ATM has reduced the burden one encounters in the bank 1(3.2) 0 1(3.2) 9(29.0) 20(64.5) 4.52 .851
ATM is rigid and inflexible to interact with 11(35.5) 7(22.6) 4(12.9) 5(16.1) 4(12.9) 2.48 1.458
Using ATM is better than going to the counter 0 1(3.2) 3(9.7) 9(29.0) 18(58.1) 4.42 .807
ATM simplifies life and the way of doing business 1(3.2) 1(3.2) 3(9.7) 11(35.5) 15(48.4) 4.23 .990
ATM offers freedom, flexibility and convenience in the
time of banking
2(6.5) 2(6.5) 2(6.5) 10(32.3) 15(48.4) 4.10 1.193
ATM provides reliable security controls I need 1(3.2) 5(16.1) 5(16.1) 12(38.7) 8(25.8) 3.68 1.137
ATM enables me save money 6(19.4) 9(29.0) 3(9.7) 6(19.4) 7(22.6) 2.97 1.494
Source: Primary data
From table 4-2 above, the study revealed that, most respondents acknowledged the
importance of technology (ATM) and how it has influenced service delivery or interface with
the bank (Mean=4.65; StD=0.68, Mean=4.52;StD=0.85, Mean=4.42;StD=0.807; Mean=4.23,
StD=0.990, Mean=4.10, StD=1.193; and Mean=3.90, StD=1.076). However there was
concern on the flexibility of ATM services offered by the bank. Such flexibility were in terms
Money deposits, money savings (Mean=2.48; StD=1.458; Mean=2.97, StD=1.494). Due to
this its possible that this could be the probable course of long queues in the bank.
4.3. Perceived Ease of Use of Auto Teller Machine (ATM)
The table 4-3 below represented the composition of the different responses from the
respondents on how ease it was for them to interact with the ATM system in their banks. This
was guided by the structured questions that are found in the table 4-3 below.
31

Table 4-3: Perceived Ease of Use of Auto Teller Machines (ATM)
Variables SD f (%) D f (%) NS f (%) A f (%) SA f (%) Mean St.D
Its easy to use an ATM 1(3.2) 0 2(6.5) 6(19.4) 22(71.0) 4.58 .765
You never feel nervous when using an ATM 5(16.1) 3(9.7) 3(9.7) 12(38.7) 8(25.8) 3.48 1.411
Using ATM does not require a lot of training 2(6.5) 1(3.2) 1(3.2) 12(38.7) 15(48.4) 4.19 1.108
ATM is easy to use even by people without prior computer
knowledge
4(12.9) 1(3.2) 2(6.5) 14(45.2) 10(32.3) 3.81 1.302
ATM is user friendly 0 0 2(6.5) 15(48.4) 14(45.2) 4.39 .615
ATM enables my ability to bank 1(3.2) 2(6.5) 1(3.2) 15(48.5) 12(38.7) 4.13 .991
ATM enables me to access all my accounts in the bank 1(3.2%) 2(6.5) 5(16.1) 10(32.3) 13(41.9) 4.03 1.080
ATM enables me do transactions anywhere around the
country
2(6.5%) 0 2(6.5) 5(16.1) 22(71.0) 4.45 1.091
I find it easy to do what I want with an ATM 1(3.2) 2(6.5) 7(22.6) 11(35.5) 10(32.3) 3.87 1.056
My interaction with ATM is clear and understandable 0 0 1(3.2) 14(45.2) 16(51.6) 4.48 .570
Source: Primary data
The study further evaluated the ease of use of ATM services to the respondents. The findings
shown in table 4-3above revealed that the respondents agreed to the friendly nature of the
Auto Teller Machine (ATM) because of its clear and understandable instructions and how
easy it was to use it since it didntrequire a lot of training. (Mean=4.58; StD=0.765;
Mean=4.48; StD=0.570; Mean=4.45; StD=1.091; Mean=4.39; StD=0.615; Mean=4.19;
StD=1.108).This revealed that all the respondents found it easy to interact or operate the
ATM since majority of the respondents were youths (20-29 Yrs.).
4.4. Behavioral Intention to Use Auto Teller Machines (ATMs)
The table 4-4 below, represented the data of the respondents on their intention to use an Auto
Teller Machine (ATM) that is what their motivation to use the new technology was.






32

Table 4-4: Behavioral Intention to Use Auto Teller Machines (ATMs)
Variables SD f (%) D f (%) NS f(%) A f (%) SA f (%) Mean St.D
I intend to use ATM more frequently for all money
deposits
3(9.7) 5(16.1) 8(25.8) 10(32.3) 5(16.1) 3.29 1.216
I intend to use ATM only if there is a long queue in the
banking hall
8(25.8) 9(29.0) 7(22.6) 2(6.5) 5(16.1) 2.58 1.385
I intend to use ATM to access all my bank accounts 2(6.5) 3(9.7) 2(6.5) 10(32.3) 14(45.2) 4.00 1.238
I intend to use ATM for cheque deposits only 13(41.9) 10(32.3) 3(9.7) 4(12.9) 1(3.2) 2.03 1.169
The reason I prefer to use ATM is because the bank
encouraged me to do so
11(35.5) 7(22.6) 4(12.9) 6(19.4) 3(9.7) 2.45 1.410
I intend to use ATM because I feel sense of
personal ownership
3(9.7) 0 4(12.9) 10(32.3) 14(45.2) 4.03 1.224
I intend to use ATM because my colleagues talk up the
issue as a great use
14(45.2) 8(25.8) 3(9.7) 5(16.1) 1(3.2) 2.06 1.237
Unless am rewarded for using ATM in same way I see
no reason to spend extra effort in using it
21(67.7) 7(22.6) 1(3.2) 2(6.5) 0 1.48 .851
Source: Primary data
The research analyzed the composition of the different respondents and revealed that majority
of the respondents intended to use the ATM service because they felt the sense of personal
ownership and to access all their bank accounts (mean=4.03; stD=1.224;
mean=4.00;stD=1.238). However other respondents declined to them using the technology
because of their colleagues talking it up to be of great use, being rewarded for using it and
only if there was a long queue in the banking hall,(mean=1.48;stD=0.851;
mean=2.06;stD=1.237;mean=2.58;stD=1.385). Furthermore the respondents declined to use
the ATM service for all money deposits (mean=3.29;stD=1.216). This indicated the
likelihood of the banking hall being congested since people would prefer lining up in the
banks then use ATMs.




33


4.5. Bank Policy implication on Auto Teller Machine (ATM)Usage
This table represents the banks policy on how to use an ATM. These policies may include;
the maximum amount to be withdrawn, policy on how to change pin and replace the lost card
Table 4-5: Bank Policy on ATM Usage
Variables SD f (%) D f
(%)
NS f (%) A f (%) SA f (%) Mean St.D
I know my banks policy on how to use an ATM 0 0 0 13(41.9) 18(58.1) 4.58 .502
I know the maximum amount of money that I have
to withdraw from my account when using an ATM
0 0 1(3.2) 12(38.7) 18(58.1) 4.55 .568
Its very easy for me to change my pin code 4(12.9) 3(9.7) 5(16.1) 8(25.8) 11(35.5) 3.61 1.407
Its fast for me to replace my ATM in my bank 6(19.4) 8(25.8) 3(9.7) 4(12.9) 10(32.3) 3.13 1.586
I love my banks policy 2(6.5) 0 5(16.1) 12(38.7) 12(38.7) 4.03 1.080
Source: primary data
Table 4-5 revealed that the respondents knew their banks policy on how to use a the
technology, the maximum amount to be withdrawn and they loved their bank policy
(Mean=4.58;St.D=0.502; Mean=4.55;stD=0.568;Mean=4,03;St.D=1.080). However the
policy on the replacement of the ATM card (Mean=3.13;St.D=1.586) indicated the probable
cause for congestion in the banks since it take quite long for one to replace his/her ATM card
once lost.
4.6.Assessing the level of Internet Accessibility
The table 4-6,analyzed the opinions of the different respondents on the accessibility of
internet in the ATM system of their banks.
Table 4-6: Internet Accessibility
Variables SD f (%) D f (%) NS f
(%)
A f (%) SA f
(%)
Mean St.D
I find it easy to access internet all the time 7(22.6) 5(16.1) 4(12.9) 6(19.4) 9(29.0) 3.16 1.573
My banks internet is very fast via the ATM point 5(16.1) 4(12.9) 6(19.4) 8(25.8) 8(25.8) 3.32 1.423
The ATM of my bank does not use internet 17(54.8) 5(16.1) 6(19.4) 2(6.5) 1(3.2) 1.87 1.147
The ATM of my bank is always down in my area of
residence
13(41.9) 7(22.6) 3(9.7) 8(25.8) 0 2.19 1.250
Its difficult to access internet in my area 12(38.7) 8(25.8) 3(9.7) 6(19.4) 2(6.5) 2.29 1.346
Source: primary data
34

Table 4-6 evaluated that the respondents declined to the ATM of their bank not using
internet, the system being down all the type and the difficulty to access internet in their areas
(Mean=2.29;St.D=1.346;Mean=2.19;St.D=1.250;Mean=1.87;St.D=1.147). However
respondents had augments on how fast the internet was via the ATM, finding it easy to access
internet all the time (Mean=3.16; St.D=1.573; Mean=3.32; St.D=1.423). This indicates the
likelihood of congestion in the banking hall.

















35

CHAPTER FIVE
DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS;

5.0 INTRODUCTION
This chapter presents the discussions of the major research findings presented in chapter four,
which are guided by the research questions. It also presents conclusions, recommendations
and suggested areas for further research.
5.1 DISCUSSION OF THE FINDINGS
The findings of the study indicated that majority of the respondents are youths (67.7%), of
which 22.6% are students. This showed their great use of the ATM (Auto Teller Machine)
since they use it most for banking their school fees and tuition in their respective banks,
32.2% of the transactions being in stanbic bank.
The study further more revealed that 41.9% were the employed youth at university level; this
showed how the youth are more flexible to technology compared to the other age groups.
This is probably due to the curiosity among the youth to adventure on whats always new in
the market.
In addition to the above, the employed youth use the ATMs for business transactions, paying
of the utility bills due to them since the ATM is quick and fast at withdrawing the money.
This revealed that the youth believed in the usefulness of the ATM since it offers freedom,
flexibility and convenience in the time of banking (Mean=4.10; St. D=1.193), and has also
reduced the burden they encounter in the banking hall (Mean=4.52; St. D=0.851).
This implies that the more the bank ensures that customers perceive the system is applicable,
flexible and interactive; the more customers behavioral intentions to use will change by
identification, internalization and compliance.
These revelations further confirm studies by Pikkarainen, et al; (2004) which support the
view that stressing a perceived usefulness leads to behavioral intention improvements. The
managerial implication of these findings seem clear, the changes of behavioral intentions of
customers can be enhanced through the adoption of particular system that the customers are
willing to use for the transactions. Another study by Tan and Teo (2000) indicates that
36

perceived usefulness is an important factor in determining the adoption of innovations. As
observed by BhattaCherje (2002), a persons willingness to transact with a particular system
is already considered as perceived usefulness. It shows that user behaviour is determined by
perceptions of usefulness of the technology (Admans et al; 1992).
Findings that customers perceived ease of use of the system, that is, its easy to use an Auto
Teller Machine (Mean=4.58; St. D=0.765) and Auto Teller Machine (ATM) being user
friendly (Mean=4.39; St. D=0.615) is essential for long-term growth of banks.
This findings concurs with the study conducted by Davis et al ;( 1989) which showed that
Perceived Ease of Use (PEOU) of the firms system which affects its long-term viability and
Perceived Usefulness. Results from previous research also revealed the significant effect of
Perceived Ease of Use on Perceived Usefulness (KleiJnen et al; 2004; Wang et al; 2003;
Davis et al; 1989).
Huang ,J.Linn Y; and Chaung S. (2006) posits that to particular behavioral beliefs, Perceived
Usefulness (PU) and Perceived Ease of Use (PEOU), are two fundamental factors for
predicting use, acceptance, and the effect of external variables on intention are mediated by
these two key beliefs (Admans et al; 1992; Davis, 1989; Davis et al;1989; Mathieson, 1991).
PU is defined as an individuals perception that using a new technology will enhance or
improve her/his performance (Davis, 1989, 1993).
This Stance is reinforced by Rogers (1995) who examined PEOU characteristics that are
supposed to provide the frame work on how potential adopters PU of an innovation. Myers
and Marquis (1969) found that new products are more successful if they are designed to
satisfy perceived customer needs than if they are developed simply to take advantage of new
technology. Gray et al; (2002) concluded that innovation is an important source of
competitive advantage in dynamic markets.
This findings means that for financial institutions to improve the customers perception that
using the new technology will be free from efforts they not only come up with new products,
processes or ideas but they must ensure that products, processes and ideas satisfy customer
needs hence successful implementation which enhances perceived usefulness of the system.

37

5.2 CONCLUSIONS
In general, this study looked at E-banking service perception, an evaluation of ATM usage in
Uganda. In particular, the study examined relationships between study variables. All the
relationships were significantly positive.
Its evident from the study that if customers perceived the system to be clear, understandable
and interactive, this improves the customers believes that using a particular system would
satisfy his/her needs and strengthens ones intention to perform a specified behaviour. Once
end users of the ATM system are informed/ educated about the need or relevance, this will
greatly influence their behaviour intention to use hence actual use in financial institutions.
In conclusion to attract customers, banks should develop usefulness completing financial
products offer on internet at a very close level they offer at the branch. This is good for the
customer and for controlling bank costs (Wang, Wang, Lin and Tang, 2003).
5.3 RECOMMENDATIONS
Basing on the results of the study, recommendations are suggested that should help to
improve ATM actual system use. These recommendations do not solely apply to the studied
financial institutions but to all organizations that are committed to technological
competiveness through a Perceived Ease of Use, Perceived Usefulness and Behavioral
Intention to use. In light of the research findings, the following recommendations are made;
Organizations should not focus necessarily on defined end results in assessment of the ATM
actual system use. Consideration should be made to customer needs, internal functions and
processes that enable the realization of results.
Organizations which have embraced innovations by focusing on changing customer needs
and wants, monitoring their strategies closely, should create on enabling environment that
facilities PU, PEOU and interactions, BI are enhanced when positive perceptions exist.
Finally, this intention influences the decision of actual usage.
Organizations should undertake a deliberate policy to develop and adopt technological
innovations perceived to be useful and easy to use by customers so as to foster significant
actual system usage.
38

5.4 AREAS FOR FURTHER RESEARCH
The results of the study, point to a number of opportunity for further research into e-banking
service perception; an evaluation of ATM usage in Uganda.
Future research should attempt to collect data from other service industries such as;
insurance, health, schools and hotels among others to see whether other services are the same
and could therefore benefit from this study.
Future research should determine other factors like organization strategy, top management
decisions, HR competences and environmental factors that influence actual system use in
Ugandan firms.














39

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42

Appendix 1
QUESTIONAIRE FOR AUTO TELLER MACHINE (ATM) USERS/
HOLDRES.
Dear respondent, this instrument is designed to facilitate collection of data on perceived
usefulness, perceived ease of use, behavioural intention to use (ATM), internet accessibility
and bank policy on ATM usage. This is an academic study and all information collected shall
be utilized purely for this study. Thank you for taking time to record your insight on the
subject.
SECTION.1 Social- background information
Tick where appropriate
Age bracket.
20-29 30-39 40 and above

Sex
Female male

Marital status
married Not married

Educational level
primary secondary university tertiary Others
specify

Employment status
employed Self-
employed
unemployed student


43

For how long have you owned your ATM card?
1
year
2
years
3
years
4 years and
above

Which account do you hold?
current savings fixed Others
specify


Where do you carry out your banking transactions?
centenary stanbic Equity Baroda Barclays Standard
Chattered
Others
specify

SECTION 11
Please tick the number that most accurately indicates your response. For example, if you
strongly agree tick 5, agree 4, not sure 3, disagree 2, and strongly disagree 1.
PERCEIVED USEFULNESS OF AUTO TELLER MACHINE (ATM)
STATEMENT 5 4 3 2 1
1. Using ATM enables me to utilize banking services more quickly.
2. Using ATM enables you to bank or withdraw money many times as one
wish.

3. Using ATM has reduced the burden one encounters in the bank.
4.ATM is rigid and inflexible to interact with
5. Using ATM is better than going to the counter.
6. Using ATM simplifies life and the way of doing business.
7.ATM offers freedom, flexibility and convenience in the time of banking
8. ATM provides reliable security controls I need.
9. Using ATM enables me save money.

44

PERCEIVED EASE OF USING AUTO TELLER MACHINE (ATMs)
Statement 5 4 3 2 1
1 Its easy to use an ATM
2 You never feel nervous when using an ATM
3 Using ATM does not require a lot of training
4 ATM is easy to use even by people without prior computer
knowledge

5 ATM is user friendly
6 ATM enables my ability to bank
7 ATM enables me to access all my accounts in the bank
8 ATM enables me do transactions anywhere around the country
9 I find it easy to do what I want to do with ATM
10 My interaction with ATM is clear and understandable
BEHAVIOURAL INTENTION TO USE AUTO TELLER MACHINE (ATMs)
Statement 5 4 3 2 1
1 I intend to use ATM frequently for all money deposit
2 I intend to use ATM only if there is a long queue in the banking hall
3 I intend to use ATM to access all my bank accounts
4 I intend to use ATM for cheque deposits only
5 The reason I prefer the use of ATM is because the bank encouraged
me to do so

6 I intend to use ATM because my colleagues talk up the issue as a
great use

7 Unless I am rewarded for using ATM in some way I see no reason to
spend extra effort in using it.

8 I intend to use ATM because I feel sense of personal ownership




45

BANK POLICY ON AUTO TELLER MACHINE USAGE (ATMs)
Statement 5 4 3 2 1
1 I know my bank policy on how to use an ATM
2 I know the maximum amount of money that I have to withdraw from
my account when using an ATM

3 Its very easy for me to change my pin code
4 Its very fast for me to replace my ATM card in my bank
5 I love my bank policy

INTERNET ACCESSIBILITY
Statement 5 4 3 2 1
1 I find it easy to assess internet all the times
2 My banks internet is very fast via the ATM point
3 The ATMs of my bank do not use internet
4 The ATM of my bank is always down in my area of residence
5 Its difficult to assess internet in my area