ISLAMIC BANKING PAYMENT SYSTEM: EMPIRICAL RESEARCH ON MICRO BUSINESS IN KUALA LUMPUR AND SELANGOR

Abstract

Abstract

The growth of small businesses and their encouraging performance in Malaysia have created the need for an efficient payment sistem. Previous studies have found that the use of cashless payment or e-payment in the banking industry has been attracting more users in Malaysia (Soman and Lam, 2002). Study by Ardizzi (2013) has found that cost effective payment sistem will be the deciding faktor that can attract users to use the services offered by a particular bank instead of those offered by their competitors. Therefore, this study was conducted with the objective to explore earlier studies relating to banking payment sistem and also to identify significant faktor for the creation of a cost effective Islamic banking payment sistem. Previous studies such as those by Shohrowardhy (2015) and Jaffar (2013) have found that there are 3 main faktor that are key to an effective payment sistem in terms of cost to the Islamic banks, namely human resources, banking facilities and reputation. Objective of this research are i) research on literature that related to Islamic payment sistem, ii) define faktor that significant for Islamic payment sistem to achieve the objective of analysis faktor and using PLS in analyst 150 questionnaire form on Kuala Lumpur and Selangor small business. The implication of this finding is further discussed and necessary recommendations for further research in this issue have been presented.

Keywords: Payment system, Islamic banking, micro business