The Effect of Mobile Money Transfer Adoption on Financial Perfomance of Hospitality Firms in Nakuru County, Kenya

Abstract

Mode of business payment has provided business competition in the hospitality firms as some firms insist on cash payment mode only. Nakuru County in the recent past has faced a stiff competition in hospitality firms due to changes in tourism destination. Financial performance of these firms are greatly affected by model of payment, one way of improving financial performance is innovation. Amongst the areas in which the firms have innovated on include the payment methods of the business. It has been noted that mode of payment are linked to how organizations perform. The study assessed the effect of mobile money transfer on financial performance of firms in the hospitality firms in Nakuru County, Kenya. The study specific objectives were to: establish the effect of security features, cost and efficiency of mobile money transfer services on financial performance of hospitality firms in Nakuru County, Kenya. Guiding theories were financial intermediary theory, diffusion of innovation theory, and Financial Inclusion Theory in terms of the theoretical framework. The unit of observation was the accountants, customer service representatives, marketing officers and management staff of firms within the hospitality firms in Nakuru County. The unit of analysis were hospitality firms in Nakuru County which use mobile money transfer Services which entails Hotels, Motels, Restaurants, Catering Leisure Vocational Park Sightseeing and Hiking. Stratified sampling method was employed to sample specific firms to be studied. The strata were different forms of hospitality in Nakuru County. The Yamane formulae enabled determination of a sample size of 317 respondents. Data for the study was collected by the use of questionnaires and analysed using descriptive as well as inferential statistics. The study found a weak, positive but statistically significant relationship between security features of Mobile money transfer and financial performance of firms in the hospitality firms (r = 0.360; p < 0.01). The findings also indicated that service cost of mobile money transfer services and financial performance of firms in hospitality firms had positive, moderately strong and statistically significant relationship (r = 0.648; p < 0.05). The findings further indicate a positive, moderately strong and statistically significant (r = 0.667; p < 0.05) relationship between efficiency of Mobile money transfer services and financial performance of hospitality firms in Nakuru County, Kenya. The study concluded that mobile money companies which runs the mobile money transfers platform should add more user-friendly feature to the platform that support services that target hospitality firms. The study recommends that mobile money transfer companies to reduce the charges which customers incur during transactions, reduce the transaction time and improve the overall quality of mobile services offered.